Instead, Scott Kriens, who has been CEO of Juniper since the infancy of the company in 1996, says he is focused exclusively on helping customers build next-generation IP network.
From the beginning, Juniper was labeled a “murderer of Cisco,” and since then the rivalry has become a classic in Silicon Valley, where Juniper is known for its so-called best of breed “products and Cisco is known as the single network-equipment vendors.
So far, Juniper has done his nickname. Since it began shipping product in 1998, has eaten on exclusive hold Cisco’s core router market. In the last year, has captured almost 30 percent of the market, up 16 percent from a year ago.
Now Juniper is going after Cisco in the enterprise market. In February, Juniper spent nearly $ 4 million to buy the leading security company NetScreen Technologies. It also introduced a new family of enterprise access routers. And it has hired former Cisco executive Tushar Kothari to run its new channel program.
Juniper’s success against Cisco must taste especially sweet to Kriens. Prior to Juniper, which was co-founder and vice president of sales for StrataCom, which was bought in 1996 by Cisco for U.S. approximately $ 4.5 billion.
CNET News.com recently visited Kriens Juniper headquarters in Sunnyvale, California, where he talked about his famous rivalry with Cisco company, why it is important to network security, and what to expect from Juniper on acquisition front .
Q: Juniper has been one of the few companies to successfully meet Cisco. How did you do?
A: Actually, that was not what we were trying to do. It’s like asking how Microsoft and Intel took on IBM. IBM has always been a great computer company. Intel became the world’s leading microprocessor company. And Microsoft is Microsoft. When the story was written, what each one of these companies were building new industries.
In networks, the companies that competed in the past tried to solve the same problem for the same customer as had been done by companies like Cisco. It is very difficult to succeed late to market with the same idea and solutions. It is much easier to succeed when you’re the first to market with new ideas for fundamentally different problems.
I think one would have to accept that there is a radical difference between this new virtual network which is in full bloom and as we enter the 21st century and the problems and the solutions that were built in 1985, when he began to Cisco.
Is part of it was in the right place at the right time? The collapse of the telecommunications market in 2000 and 2001 appeared to eliminate a large number of new firms included in the scene right after Juniper.
You’re right. Luck has a lot to do with success. And it’s important for anyone who has enjoyed any success to always remember that. Coincidentally, we had answers to the problems that were becoming problems for our customers at the same time. As a result, we have gone from zero dollars to $ 100 million to U.S. $ 600 million in revenue in two years – one of the fastest growing ramp time. Certainly, we have obtained good results, but the execution in another time would have much less influence.
Speaking of Cisco, the IP routing business was down 12 percent in the last quarter, according to several analysts. When Juniper reported earnings, core router sales rose. What’s happening?
In simpler terms, it is only a change in market share. If you were to look back over the last couple of years in the central market, our share has gone from somewhere in the teens to about 30 or 35 percent. Along the way, there have been blips up and down. The last quarter will be a bump up. But the competition from quarter to quarter is not as important as the trend line.
Do you feel the trend is to work for Juniper?
So far, yes. Research depends on the beholder. But in almost (all research), the slope of that market share shift is positive for Juniper. Frankly, I prefer to see a larger market for everyone, but in the meantime we will take action.
Competing with Cisco is still pretty tight. Will it hold at night?
You know, I do not spend much time thinking about it. This is the truth. We found our best success comes from being more focused in our own planning and execution. When Intel or Microsoft was built, which eventually did successfully was to find a way to be the best PC processor or company in the world without worrying about what IBM mainframe company, he was doing.
There was an obvious David and Goliath comparison during that time. “Oh my God, IBM has all that money. How is Microsoft going to get poor never get out of that shadow?” I think he did not worry about the shadow because the shadow is cast on the one hand, and they were working elsewhere in the sunlight. The only way the shadow can hurt you is if you spend your time worrying about what they really do not.
That’s a good philosophy, but the marketing campaign of Juniper Networks at The Wall Street Journal definitely pokes fun at the rivalry with Cisco.
Oh, sure, that tactically compete, just because it’s easier for people to understand that. But strategically we focus on our customers and the answers to their problems. There are women out there fighting every day. There is a happening now. In fact, I’m sure (there is) more than one somewhere in the world. Those are fun, not always going to be competition. Sometimes, from a company like Cisco. Other times, come from a local company.
Juniper obviously thinks that security is important. You spent nearly $ 4 billion to buy NetScreen Technologies earlier this year. But can you explain why it is important to networking?
Security allows for rapid expansion of the new generation of IP (Internet Protocol). People more confidence in the network, the more you will use. The only reason why many companies have private networks because they do not rely on public networks. If and when we have demonstrated the qualities of safe and reliable virtual network, more and more people are going to use a faster and faster.
Juniper is looking to acquire more companies? Or do you think will do more internal development?
We have spent and will continue to spend hundreds of millions of dollars in domestic development. In 2005, we will spend more than a quarter million dollars or probably closer to U.S. $ 300 million in research and development of our own technologies. That will always be the main objective and priority of the company.
Acquisitions or relationships are tactics Juniper. The strategy is the expansion or coverage of an area of critical technology. For security, there is a tremendous development within Juniper to build security functionality into our existing portfolio. We made the tactical decision that the acquisition of NetScreen’s product portfolio and talent and experience of people NetScreen is fundamental to our security strategy.
Sometimes companies get the strategy and tactics of confusion when it comes to acquisitions. Making decisions that reverse priority creates a product portfolio that is unlikely to benefit each other. This is why most acquisitions do not succeed, because they are bought as a strategy rather than an element of a broader plan.
I think I read somewhere that half of all acquisitions do not work. How would you rate the success of Juniper?
I think the number is actually closer to failure of 80 percent, believe it or not. So, what is our batting average in this game? In the big plays, of which I would say that there are two – Unisphere Networks and NetScreen – we’re batting a 1,000. We are 100 percent white. With smaller movements, we made a couple mistakes. And you know, I suspect it will not be the last errors we make.
The market is the largest provider Juniper customer base. If companies really buying into this idea of convergence of data, voice and video networking over IP?
The way to know is whether the capital expenditure (capex) spending is going down – then convergence is successful. The common goal is to reduce capital expenditures by simplifying network. I think the industry is sometimes confused by this leading indicator because they think that goes to capital expenditure is a good sign and down is a bad sign. In the next-generation IP network, the opposite is true.
So where are we now in this continuum?
I do not know what the latest projections of capital expenditure. But those who last saw a projected increase in total spending. Personally, I do not think so. I think what’s happening is companies are spending a greater percentage of its total budget on computers of next generation networks. At the same time, they are decreasing spending on older legacy gear as quickly as possible. At most, the total growth will translate into a plane.