Exclusive: Juniper's CEO Clarifies A Vision For 'The New Network'11:39 AM EST Wed. May. 26, 2010
Kevin Johnson has been CEO of Juniper Networks for just over a year and half, but what a year and half. The period has seen global meltdown and economic recession, blockbuster acquisition after blockbuster acquisition in the ongoing consolidation of the networking market, and the continuing story of networks converging with data centers, which has created a need for new products, services and solution provider sales skills.
Into all that, Johnson has seen Juniper through steady, impressive growth, and, last fall, the launch of "The New Network" campaign. According to Johnson, that was the moment when Juniper put its stake in the ground and started to put real marketing muscle -- not traditionally a Juniper strength -- behind its partner-beloved technology.
Johnson sat down with CRN Networking Editor Chad Berndtson for an exclusive interview at this week's Juniper J-Partner Summit in Phoenix, where he weighed in on the Juniper advantage, Juniper's competition with both Cisco and HP, the coming of Juniper's Stratus project and why having the right partners with whom to go to market is more important now than ever.
We heard a lot of strong messaging from Juniper this morning: things you're doing well and things you haven't been doing so well that you're going to get a lot better at. With that taken into account, what is your biggest challenge right now?
We really have been super clear on putting a stake in the ground around this thought leadership agenda, "The New Network." Having that has given us the opportunity to tell our story in a much broader way, so the marketing work we've done there, whether it was around branding or the marketing of Junos, Junos Space or Junos Pulse, we have supporting facts around why the new network approach is needed and the benefits of the new network approach and how it transforms the economics of the network. We're telling that story now and we're getting traction behind it.
That said, if you think of the broad unaided awareness in the enterprise sector that we still have to reach with customers, that's still a big opportunity for us and there's still a lot more we have to do there. That's clearly No. 1: how do we get the message out in a world where there's a lot of messages and a very dynamic competitive landscape. I think Lauren [Flaherty, Juniper executive vice president and chief marketing officer] has done a phenomenal job advancing that.
The second thing is that we've got to be very surgically focused on the wins we get, and have to make sure, especially when it's something big like the New York Stock Exchange, Priceline or the Tokyo Stock Exchange, that our resources and our partner resources line up. Every one of these wins, we feed back as a reference to help us tell the story. The more customers see it, in other words, the more customers talk to other customers who are doing it. It opens up their mind and they start asking the question: maybe I should spend more time paying attention to this. So at a macro level, we're continuing to tell the story from a marketing standpoint, and looking at how we line up our resources and the resources of our partners in a way that has impact.
What fundamentally needed to change about Juniper's marketing? You've had significant market gains in the last few years, but a lot of partners still talk about Juniper as a best kept secret -- a niche challenger. What's changed most, going back to last year?
After I started in this role 18 months ago, I spent a lot of time studying the industry and studying the competition and really digging into the company to understand how we need to align for the future. I would say one of the most impactful things has been clarifying this thought leadership agenda we call "The New Network" -- that is the anchor point, that is the north star for our company. All 7,500 employees are marching to fulfill that vision and now we're engaging the partners -- the ecosystem. So having that vision and clarity of where we were going was the No. 1.
Second was the caliber of marketing talent we've brought to the company. Lauren lead that effort with the team she's brought in. We've utilized every forum, whether it's online, outdoor or events, and we're pulling together all the resources for a world-class marketing organization. I believe we've always had a world-class engineering organization, so it was time to put a stake in the ground about what's going to happen in the industry for the next 10 years, and complement that world-class engineering with world-class marketing.
Now, magical things are beginning to happen. More and more partners are joining us, more and more customers are joining us, and people who perhaps had not heard of us before are asking about us. Customers want us at the strategic table as they're planning their IT agendas. We're embracing that.
All the while, as you mentioned, you've had this dynamic competitive landscape, headed by two 800-pound gorillas in HP and Cisco. Juniper doesn't have a reputation as a saber-rattler. You're not a chest-beating company and you don't strike me as a chest-beating executive, at least compared to some of your counterparts. This morning, though, we also heard some pretty aggressive competitive rhetoric from Juniper. That tone is usually set from the top, so what tone are you looking to set from Juniper as it relates to Cisco and HP?
Well, look, our focus is on the customer, and that customer has needs that the legacy network is not able to address. We're 100 percent focused on that thought leadership agenda. That said, we're aware of the competition of course and what everyone else is doing. We believe we've got this strong conviction that what we are doing is different and that no one else is in a position to offer that. We'll let everyone else rattle sabers at one another, and we'll just stay focused on the future and where we're investing in R&D.
Next: Johnson On HP, Cisco And Acquisitions
How does the HP-versus-Cisco saber rattling help Juniper?
Well, it's kind of what was in our discussion today. Partners have the opportunity to make a decision -- make a choice -- as to where they place their bets in terms of where the future and where the industry is going. I think in the enterprise, they have three choices. They can bet on the status quo if they think the status quo is going to solve these problems, they can bet on commoditization, or they can bet on the innovator.
In some sense, I think our focus on this thought leadership creates value for customers, and our approach is also one that embraces a broad ecosystem of partners to contribute to that innovation. It's not just an ecosystem of partners going out there to sell our stuff. We count on the partners to create assets that run on Junos, Junos Space and Junos Pulse and to bring services to the table. By opening the platform, we're creating unlimited possibility for our partners.
One thing that keeps coming up is the acquisition climate. We have a land grab out there, with Avaya-Nortel, and HP-3Com, and right down the list. Your acquisition of Ankeena notwithstanding, Juniper has largely sat this out. Can you comment on why you aren't jumping in to this rush of acquisitions?
We're very intentional about the value creation we invest in for our customers and shareholders. Because we have a thought leadership agenda, our primary value creation approach is organic R&D. Even in the economic downturn, we increased investment in R&D and tightened up our op-ex in every other area. Coming out of the downturn, the acquisition of Ankeena was about intellectual property and the software that runs on Junos. It was a very nice tuck-in acquisition: it was a partner that had invested in Junos, in this case for video streaming, and I think you should expect us to do many more of these tuck-in acquisitions to leverage the organic R&D we're doing on the platform.
In a lot of cases, you see companies doing acquisitions to leverage their sales force. That does nothing for the customer. What we're trying to do is transform the economics and experiences of networking, which requires innovation. Ankeena is a tuck-in that complements that organic R&D.
Will Juniper need to expand into additional markets to continue to grow its base? Will you add new technologies, and if so, where might you be looking?
Well, we're clearly focused on the domain of high performance networking and the addressable market there, especially since we entered the Ethernet switch market. I think by 2012, the estimation is that the addressable market is going to be $45 billion and that's for both enterprise and service providers. So we see plenty of opportunity to innovate and grow and bring value. That said, we're also going to see more and more scenarios that involve the Junos platform, whether it's in mobile security, or related to video, or related to automating tasks that are labor-intensive. I think in many ways the the additional growth for us will be as we bring more and more functionality on the Junos platform.
Are there holes or softness in Juniper's product portfolio right now? Is it where you'd like it to be?
We're very disciplined and systemic in what we've selected for R&D. We've added some more product depth to our switch lineup with our new 10-gig, we've got the Stratus project making very good progress and on track for a release next year, and these are the types of key things we've chosen to invest in. Take Junos Space: for both us and our partners, there's an infinite number of opportunities to build on it. And on the service provider side, we kicked off Project Falon last year and we're telling the story around the mobility evolved packet core, and we're making good progress with that. The next phase is to set up customer trials later this year. The Ankeena stuff is also just one step.
In every case, across routing to switching to security, we've got a three-year product roadmap. Frankly, we have more ideas and innovation that we can fund right now, so we're very focused on how do we prioritize those things and pick the ones that have the biggest impact, and when we do choose to do something, focus on doing it right.
Next: Messaging To Partners Coming Out Of The Downturn
Do you have the executive team in place that you need at this point? One thing we've seen from Juniper is a couple of folks moving into different roles. Kim Perdikou is one example, and Frank Vitagliano is now focused on Americas channels, and you have new blood in too. It all seems strategic; how do you envision continuing to change the executive flowchart?
Since I've been here, I've been trying to sequence the changes we've been making. I started more on the sales and marketing and services side, so you saw people like Mike Rose [executive vice president, service, support and operations] join, Gerri Elliott [executive vice president, strategic alliances] join and Lauren Flaherty join.
Within their organizations, they're aligning resources, so in the last six months, I've been shifting my focus more on the business groups side. After we shipped the MX-3D router, we were at a point where separating the systems part of our business to create Junos Ready Software was a very logical move. Having Kim come join the office of the CEO helped me get more bandwidth with our key service provider customers, and we brought in Stefan Dyckerhoff, and expanded Manoj's [Leelanivas] role.
These are very thoughtful, orchestrated moves we're making. I think we're on a journey, and there are more moves that will come, but we're trying to sequence the timing of it to key milestones. In any healthy growing organization, deploying talent the right ways is a key responsibility and I expect you'll see more of that from us.
Last year, your message to partners was Juniper as the challenger brand, and this year, it's about being the innovator as opposed to the status quo or the commoditizer. If Juniper gets where it needs to be a year from now, what do you think you'll be telling partners? What do you hope to be telling partners with Stratus on the horizon?
The New Network approach is something we believe will unfold over the next decade: that's a 10-year vision for where we're taking the technology. A year from now, I expect to come back and remind people of that and talk about the progress we've delivered over the past year and set the stage for what's going to come the next year. This year is consistent with what we communicated a year ago, being a challenger and an innovator.
This year we're also making a big step to framing our vision around the new network, and that's with license agreements for our Junos SDK. We have hundreds of partners that have expressed interest in being a part of this, so next year, expect us to deliver everything we've talked about and lay out what partners can expect from us next. If we do that well, our partners' business will grow and we will grow, too.
Are partners getting the software piece as you need them to? A lot of the partners are still very much networking resellers, and the networking and software worlds, for some of them, have been siloed in the past. Are they getting there?
I'm a believer that every partner is unique, and every partner has a business plan for how they deploy resources and what they focus on. I'm very respectful of the fact that we have to provide the tools and resources to support our partners' business plans. There are going to be some partners very focused on services and software, and some focused on broad solutions and reselling systems.
I think we see a market, though, for those partners that can not only sell systems but fulfill orders for systems and wrap incremental value-add around those systems, whether that value-add is in services, software or integrating multiple components. The partners I've spoken to here are focused on how they can expand their value proposition and commented on the fact that we're providing them a wide range of ways to do that.
In your ongoing partner conversations, what are they asking you for most often?
A year ago, the request I got the most was for more marketing air cover. This year, a lot of them are commenting, "You guys delivered on that, and look at what the company has done over the past year, and hey, are there ways that I can participate in that marketing air cover?" You look at things like the new Marketing Resource Center that was announced [this week], and that's intended to help fulfill that need.
Also, we talk often about this concept of an architectural disruption taking place, and partners are saying to me that people need to understand that more, and do you have the sales training to help us do that.
"Is the recession over" is kind of a slippery question, but what indicators do you look at that tells you things are looking up, if they are?
We had a strong Q4 in 2009 and in Q1 of this year, we showed 19 percent year over year growth. That's obviously off a low comparable for Q1 of 2009, but the general perspective is that the economic situation is better than it was a year ago, though the pace and trajectory of this recovery will vary by geography. I think there's good reason to be cautious. The indicators are positive to where we were a year ago, but the realization is that this'll probably be a long recovery at a macro level.
That said, the value proposition we have around the new network resonates. Customers say, "We've got to find ways to solve networking problems and lower TCO and the status quo is just not going to be an option." The approach taken by the commoditizer doesn't provide the solution, either, so what we're able to do is provide better economics and better customer experience, too.
Service providers are buying, but are enterprises buying too? Partners are trying to get a handle on whether enterprises are investing now or waiting further quarters. What do the tea leaves tell you?
Well, enterprise business for Juniper in 2009 grew 20 percent in one of the worst economic climates in my lifetime. So the message to partners is: place a bet now, and place it on the innovator. This is the future. This where it's growing. We're a growth story, and certainly much of that growth is coming from the enterprise. The growth agenda in the enterprise is very strong.