Juniper to invite Cisco to ‘Pepsi’ challenge

Juniper Networks is working on a low-end router wide area network designed to compete with 2600 Cisco Systems’ router.
Last week, Stephen Kamman, an equity analyst at CIBC World Markets, published a research note on the new router, code-named Pepsi. Cisco, which dominates the market with more than 90 percent market share, is believed to be the “Coca-Cola” to “Juniper Pepsi.”

Details of the new router are scarce, but Kamman said he would not be surprised to see Juniper to add security features of NetScreen Technologies in the router that will connect to corporate networks operators’ networks. These features likely include a firewall and virtual private networks. Juniper announced last month it is buying Netscreen, a provider of well established security apparatus, in a deal valued at U.S. $ 3.4 billion.

Kamman was unsure of a release date for the router. Juniper declined to comment on the product.

Cisco currently dominates the wide area network (WAN) with its 2600 router market router. The market research firm Dell ‘Oro estimated the total market of U.S. $ 1,260,000,000 year.

WAN access routers sit in the customer’s network and provide access to Internet and other wide area services. Most of these devices are sold by companies, what they offer to their customers as part of their data networks and Internet services. Cisco recently announced that adds features to 2600 to show support better over Internet Protocol (VoIP).

Cisco’s strength in this market comes from its close ties with business resellers, Kamman said. Cisco is also known as a key provider of intellectual property products. Its high-end routers are used in almost every network carrier to transport traffic over the Internet.

Like Cisco, Juniper also sells high-end routers to carriers. In fact, the company has built its business over the past six years by the marketing as an alternative to Cisco. Now, with the addition of the NetScreen product line and sales force, Juniper has relationships with resellers of transport that the corporate side of the business.

Cisco 2600 is a technologically advanced device, Kamman said. He believes that Juniper has the engineering expertise to easily create a box to compete with the 2600. But so far, has lacked a sales channel and a focus on this market.

“For Juniper, the challenge has not been in the construction of a new low-end platform for WAN access,” Kamman said in an interview. “It was the distribution channel. Six months ago, I would say that this change would not have made sense for Juniper, but now with the acquisition of NetScreen makes sense.”