Cloud, Mobility Will Drive Revenue, Juniper

Juniper Networks (JNPR) reaffirmed its long-term forecast for annual revenue growth of twenty p.c or additional because it met with monetary analysts on Thursday following 2 massive product-line introductions.

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

Juniper embarked on the conference by introducing its PTX Series Packet Transport Switch line, a service-provider core platform which will mix packet switching and optical network elements. This followed the announcement of Juniper’s QFabric, a brand new design designed to scale back data-center networks to one logical switch. Simplifying networks is at the core of the company’s overall strategy, geared toward each scaling up networks and cutting prices.

Cloud computing and mobility are the most drivers of the new demand for networking, Johnson said. As carriers and firms attempt to scale up their networks, they’re going to want easier architectures, as a result of the present model involves deploying a multiplicity of devices, he said. He compared it to a model of computing during which each variety of application wants its own special server hardware.

“The legacy approach in networking isn’t sustainable,” Johnson said. “The trade is simply being crushed by the complexity of this legacy model.”

One service supplier that subscribes to the current read is Japanese carrier NTT Communications, that within the past 2 years has seen the traffic on its trans-Pacific net backbone grow from 180G bps (gigabits per second) to 450G bps. It expects to visualize that grow to 600G bps by the tip of this year, said Kempei Fukuda, senior director of NTT’s world network, who spoke on a panel at the Juniper conference. because the traffic load grows, competition is additionally forcing NTT to sell bandwidth at lower rates, Fukuda said. NTT plans to maneuver all its core network traffic from commonplace net routers to the sort of converged design within the PTX platform over following few years, he said.

Analyst Mark Sue of RBC Capital Markets thinks Juniper will most likely achieve its long-term revenue growth forecast. the corporate reported twenty three p.c revenue growth in 2010.

“The tailwind remains behind them,” Sue said. One key variable are going to be how quickly Juniper will begin recognizing revenue from the QFabric and PTX merchandise, he said. they’re scheduled to start out shipping during this year’s third quarter and next year’s initial quarter, respectively. Expanding its addressable market with new varieties of merchandise also will be important, Sue said.

Johnson downplayed Juniper’s vulnerability to product margin shortfalls like those who recently hit Cisco Systems (CSCO) due to the recognition of some lower-margin switches. Cisco Chairman and CEO John Chambers on Tuesday characterised the shortfall as an unpleasant surprise. Johnson said Juniper focuses on innovative switches with added price rather than ones that are additional subject to pricing pressures.

Juniper’s leadership conjointly distanced itself from Cisco by emphasizing its specialise in networking. within the past few years, Cisco has expanded its purview to incorporate client electronics merchandise and server systems. Despite Juniper’s claims that its new JunOS categorical chipset is one amongst the foremost powerful processors within the world, together with server CPUs, the corporate has no current plans to sell computing or storage systems, consistent with Pradeep Sindhu, vice chairman, chief technical officer and founder. Juniper thinks it will do additional for information centers with networking gear than with servers, as a result of as information centers get larger, the network plays a much bigger role in performance, Sindhu said.
Going into different elements of the information center would conjointly cause the danger of offending Juniper’s partners, like IBM (IBM), Dell and NetApp (NTAP), that are serving to to sell the company’s networking gear, RBC’s Sue said.