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Juniper's Rookie Products Get Called Up

Craig Matsumoto
4/24/2012

Juniper Networks Inc. (NYSE: JNPR) has named some initial customers for QFabric, the T4000 and the PTX, three of the four new products that investors are counting on for growth in 2012.

The disclosures came up early during Juniper's earnings call Tuesday evening. Juniper reported first-quarter results that investors liked, but it said revenues and profits would stay flat for the second quarter. (See Juniper Reports an Upbeat Q1 Early.)

Two customers have gone live with full implementations of QFabric, Juniper's large-scale data-center interconnect architecture, said Stefan Dyckerhoff, executive vice president of Juniper's Platform Systems Group. One is Qihoo 360 Technology Co., a security software vendor based in China. The other is in Orica Ltd., in Australia.

He also cited Jan Yperman Hospital in Belgium as a QFabric customer.

QFabric has 100 or so customers, but it's been unclear how many of them are only using the QFX3500 top-of-rack switch -- which is a really fast switch but doesn't carry the radical data-center changes of QFabric when used by itself.

While the reporting of full-QFabric customers shows progress, not all the customers sound like the very large data-center owners QFabric is intended for, as one analyst on the call pointed out.

For the T4000 core router, Juniper has signed Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) and Virgin Media Inc. (Nasdaq: VMED) as customers, Dyckerhoff said on the call. Telstra is an interesting one, being an old customer of the Cisco Systems Inc. (Nasdaq: CSCO) CRS series of core routers and the first announced customer for Cisco's Videoscape architecture. (See Telstra Selects Cisco CRS-1 and Cisco Puts It Together.)

Virgin Media was already using Juniper's T-series core routers. (See Virgin Deploys 40-Gig.)

Dyckerhoff also mentioned The London Internet Exchange Ltd. (LINX) as a customer for the PTX Series Packet Transport Switch, Juniper's packet-optical system. But we already knew that. (See Juniper Feeds LINX.)

Not much money is coming in from the new products yet. The T4000 started shipping late in the December quarter, so it has barely three months of revenues to talk about. The March quarter was the first quarter of revenues for the PTX, so very little has happened there, CFO Robyn Denholm said on the call.

As for QFabric, it's been bringing in revenues for a couple of quarters but still represents only a modest amount, Denholm said.

Juniper isn't giving specific numbers for any of the three product lines.

Absent from the new-products discussion was MobileNext, Juniper's evolved packet core. Analysts have pointed out that most of the mobile-infrastructure vendors already have their own packet cores, leaving few openings for MobileNext.

— Craig Matsumoto, Managing Editor, Light Reading

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Pete Baldwin
Pete Baldwin
12/5/2012 | 5:35:12 PM
re: Juniper's Rookie Products Get Called Up


Qihoo sounds like a pretty interesting QFabric customer. The other two, I don't know... although I guess Orica is a pretty big company.


Maybe I'm just being tech-biased, thinking a software company must be more cool than, say, a hospital. Should I be more impressed by the early QFabric customers?

quicktime
quicktime
12/5/2012 | 5:35:11 PM
re: Juniper's Rookie Products Get Called Up


Stock tumble!


 

Pete Baldwin
Pete Baldwin
12/5/2012 | 5:35:10 PM
re: Juniper's Rookie Products Get Called Up


yep, Juniper's down 6% (and has been worsening as the morning wears on). Their guidance wasn't great.

Bob Saccamano
Bob Saccamano
12/5/2012 | 5:35:07 PM
re: Juniper's Rookie Products Get Called Up


Interesting when digging underneath the numbers that Juniper's revenue from product was down sharply (13%) YoY from $877m to $771m.  Router revenue got hammered.  Did not hear anyone challenge Juniper management on that very concerning metric.

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