Cloud, mobility will drive revenue, Juniper says

The company reaffirmed its long-term growth forecast and said it will stay focused on networking

Juniper Networks reaffirmed its long-term forecast for annual revenue growth of 20 per cent or more as it met with financial analysts on Thursday following two big product-line introductions.

The company remains focused solely on networking and believes it can keep taking market share from competitors by seizing on architectural transitions driven by the explosive growth in data traffic in enterprise and carrier networks, CEO Kevin Johnson said at the annual Juniper Financial Analyst Meeting in San Francisco.

Juniper kicked off the conference by introducing its PTX Series Packet Transport Switch line, a service-provider core platform that will combine packet switching and optical network components. This followed the announcement of Juniper's QFabric, a new architecture designed to reduce data-center networks to a single logical switch. Simplifying networks is at the core of the company's overall strategy, aimed at both scaling up networks and cutting costs.

Cloud computing and mobility are the main drivers of the new demand for networking, Johnson said. As carriers and companies try to scale up their networks, they will need simpler architectures, because the current model involves deploying a multiplicity of devices, he said. He compared it to a model of computing in which every type of application needs its own special server hardware.

"The legacy approach in networking is not sustainable," Johnson said. "The industry is just being crushed by the complexity of this legacy model."

One service provider that subscribes to this view is Japanese carrier NTT Communications, which in the past two years has seen the traffic on its trans-Pacific Internet backbone grow from 180G bps (gigabits per second) to 450G bps. It expects to see that grow to 600G bps by the end of this year, said Kempei Fukuda, senior director of NTT's global network, who spoke on a panel at the Juniper conference. As the traffic load grows, competition is also forcing NTT to sell bandwidth at lower rates, Fukuda said. NTT plans to move all its core network traffic from standard Internet routers to the type of converged architecture in the PTX platform over the next few years, he said.

Analyst Mark Sue of RBC Capital Markets thinks Juniper can probably achieve its long-term revenue growth forecast. The company reported 23 per cent revenue growth in 2010.

"The tailwind is still behind them," Sue said. One key variable will be how quickly Juniper can begin recognizing revenue from the QFabric and PTX products, he said. They are scheduled to start shipping in this year's third quarter and next year's first quarter, respectively. Expanding its addressable market with new types of products will also be critical, Sue said.

Johnson downplayed Juniper's vulnerability to product margin shortfalls like those that recently hit Cisco Systems because of the popularity of some lower-margin switches. Cisco Chairman and CEO John Chambers on Tuesday characterized the shortfall as an unpleasant surprise. Johnson said Juniper focuses on innovative switches with added value instead of ones that are more subject to pricing pressures.

Juniper's leadership also distanced itself from Cisco by emphasizing its focus on networking. In the past few years, Cisco has expanded its purview to include consumer electronics products and server systems. Despite Juniper's claims that its new JunOS Express chipset is one of the most powerful processors in the world, including server CPUs, the company has no current plans to sell computing or storage systems, according to Pradeep Sindhu, vice chairman, chief technical officer and founder. Juniper thinks it can do more for data centers with networking gear than with servers, because as data centers get bigger, the network plays a bigger role in performance, Sindhu said.

Going into other parts of the data center would also pose the danger of offending Juniper's partners, such as IBM, Dell and NetApp, which are helping to sell the company's networking gear, RBC's Sue said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Networkingtelecommunicationjuniper networks

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Cool Tech

Bang and Olufsen Beosound Stage - Dolby Atmos Soundbar

Learn more >

Toys for Boys

Sony WF-1000XM3 Wireless Noise Cancelling Headphones

Learn more >

ASUS ROG, ACRONYM partner for Special Edition Zephyrus G14

Learn more >

Nakamichi Delta 100 3-Way Hi Fi Speaker System

Learn more >

Family Friendly

Philips Sonicare Diamond Clean 9000 Toothbrush

Learn more >

Mario Kart Live: Home Circuit for Nintendo Switch

Learn more >

Stocking Stuffer

SunnyBunny Snowflakes 20 LED Solar Powered Fairy String

Learn more >

Teac 7 inch Swivel Screen Portable DVD Player

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?