Juniper Sets Sights On Nortel Partners

On Monday, Sunnyvale, Calif.-based Juniper issued a letter to Nortel partners, opening its arms to them as they navigate through economic uncertainty and evaluate their vendor partnerships.

Last month, Nortel posted $3.4 billion in losses for the third calendar quarter. To offset the slump in sales, the Toronto-based company said it will slash costs resulting in 1,300 layoffs, a salary freeze, a hiring freeze and a review of its real estate holdings. The $3.4 billion quarterly loss was Nortel's biggest drop in seven years, despite two years of job slashing, which in 2007 saw Nortel cut 3,900 employees and 2,100 more in 2008.

Juniper, on the other hand, closed out the third quarter of 2008 with revenue of $947 million, up 29 percent from the prior year, marking its most successful quarter to date.

Juniper is looking to capitalize on Nortel's plight, encouraging Nortel partners to jump ship.

In the letter to Nortel partners, Frank Vitagliano, Juniper's senior vice president of worldwide channels, wrote: "At Juniper Networks, we understand it can be challenging to navigate the current business landscape while continuing to add value to your customers. In today's troubled climate, you may have concerns about your continued ability to provide high-performance networking solutions to your customers. We want to help."

The letter continued: "Our partner-dependent strategy means Juniper is always in support of your brand -- we want to be your partner, not your competitor. Mutual profitability is at the heart of every engagement where your product expertise and service capabilities are emphasized. It's why our J-Partner program receives the highest marks in partner profitability in industry surveys."

Despite the appearance that Juniper is only looking to poach away Nortel's partner base, Vitagliano said Juniper is using Nortel's struggles as an opportunity to tell new and existing partners that Juniper plans to invest across the board in the channel and that it believes partners can and will survive the economic downturn.

"It's really not about necessarily any specific competitor," Vitagliano said. "It's a mindset right now that we're taking a long-term view ... Successful companies can prosper during these times if a.) you continue to do things you're good at and b.) if you continue to invest."

Juniper has vowed to continue to invest in both existing and new partners, Vitagliano said. It just so happens that Nortel's troubles have opened the door to effectively get that message out.

"We've got the ability here to differentiate ourselves and to be faster, more nimble and more focused than larger companies and stronger and more resilient than smaller companies," he said, noting that Juniper expects that when the economic dust settles Juniper will "come out of it on the back end in a stronger position."

Vitagliano said he's extending the offer for Nortel partners to consider Juniper and its complete end-to-end product set.

"You'd have to be unconscious to not be cognizant, or at least wary, of what's going on in the market. It's very, very concerning," Vitagliano said, later adding that "given the current environment we think it's a good time to begin to target opportunities that have been out there."

Some partners, however, said they plan to maintain their vendor relationships, despite the uncertain economic climate. The president of one Pennsylvania-based solution provider said his company's relationships with both Nortel and Juniper remain strong, and the fact that Nortel is struggling isn't reason enough for him to abandon the vendor.

"I'm loyal to Juniper and I'm loyal to Nortel," he said. "I'm not looking to replace Nortel unless Nortel goes away."

NEXT: Juniper Continues Channel Investments