Juniper CEO: 'Partners Are Betting On A Winner'

Since taking over as Juniper's CEO last September, Kevin Johnson has vowed to keep the networking company's key focus on partners and the channel.

Taking the stage this week at his first Juniper J-Partner Summit in Las Vegas, Johnson told the more than 200 partners in attendance that Juniper relies on them for much of its success and is working diligently to make them more profitable while making Juniper an easier company to work with.

In just a short time on the stage, Johnson, who joined Juniper after more than 15 years with Microsoft, outlined Juniper's renewed focus on marketing to help partners win deals, Juniper's story around lower total cost of ownership and value, and the rounding out of Juniper's portfolio, which makes the company a "pure play in high-performance networking that embraces partnerships."

Following his address, Channelweb.com sat down with Johnson to discuss Juniper's past, present and future with partners; its product portfolio; the competitive landscape; and how Juniper plans to add value and keep partners profitable. Here are excerpts from that conversation.

Can you give us an idea when you hit the two-year mark at Juniper what's going to be different?

Fundamentally, Juniper is a growth company. Look at the growth we've seen just over the last year: growth in revenue, growth in profitability, growth in head count, growth in partners, growth in expanding product portfolio. I think the story over the next couple of years is how we manage that growth. Are we thoughtful about the investments we're making? Are we delivering product that's enabling customer value? Is that value translating to growth in market share? Does that growth in market share lead to growth and opportunity for our partners? And if we do that well, if we create that formula, I think we're laying the foundation for the next 10 years of growth.

How will the partners grow with Juniper over the next few years? What segments, what markets? Is it a vertical play? Is it a sector play? Is it in the enterprise? Is it a midmarket play?

Start with the enterprise. Take enterprise and public sector: Today our two largest verticals within enterprise really are public sector and financial services. But there's a set of customers that have the characteristics that need high-performance networks. Those are the customers that I think create growth opportunities for our partners. Oftentimes those customers are characterized by having one or more attributes. No. 1, their reputation depends on the availability and performance of their network. Their revenue depends on the performance and availability of the network. Or their mission depends on the availability and performance of the network. If one or more of those three things is true, those customers have a need for high-performance networks. Today you find those types of customers in every industry vertical. Yet, today a significant portion of demand is coming from financial services and public sector, but I expect that to continue to grow.

What are the holes in the partner portfolio? Are there any kinds of partners you want? Do you have enough? Is there something you'd like to have that you don't have with partners?

For the most part, my view is we've got some great partners, yet we want to continue to help our partners reach scale. That means having partners with a broader range of services that they take to the market, larger numbers of employees that have the skills around JUNOS [Juniper's network operating system] and the Juniper technologies. Part of that is the fact that we are just reaching scale in the enterprise. Our enterprise business last year was just over $1 billion in revenue and it's growing at double-digit rates. The fact is, we as a company have an opportunity to achieve more scale in the enterprise and we have to do that with our partners. Do we need more partners? We need partners with more critical mass. We can do that with our existing base of partners. The partners that are helping us be successful today, we're going to continue to invest in those partners and help them grow their business. I think there are opportunities for us to continue to strengthen our partnerships at the high end. Look at the strategic alliance we have with IBM. With technology companies that also have a thorough leadership agenda, we're going to reach out and embrace our partnerships and I think that will help complete or continue to enhance the portfolio of solutions we have, whether it's in the data center or in the core network infrastructure.

How do you plan to get the Juniper name in front of the customer? What are you and your partners doing to get in front of customers?

There's an element of awareness. We've measured unaided awareness in the enterprise and our unaided awareness is very low. You ask customers to say what are the providers of high-performance networking and it's a fact that we have an opportunity to increase that. Below that then is the demand generation. We have an opportunity to do a better job telling our story when it comes to the value proposition. And out of that demand generation we have an opportunity to do a better job routing these leads and opportunities to our field and to our partners.

Next: Johnson Discusses Services And Profitability

You expect the partners to drive demand as well, don't you? Otherwise they're just order-takers.

It's our job to create the air cover that partners need. It's our job to train partners and then we do it together. It's one of those things that unless we're out there doing it proactively, it's hard for partners to go do that. The feedback that I've had from our partners is they're requesting us to do more in that area.

At the end of the day it's kind of a shared responsibility. If we're creating air cover and we're training our partners on that value proposition, they're in a great position to carry that forward. They're day to day in front of customers and telling the story and getting design wins and demonstrating that value proposition. We have to do both.

Can you talk about Juniper's services play? Are there more services dollars attached to your products than there are to your competitors' products?

I think there's more profit attached to our products than competitors. That was the premise of having IPED [Everything Channel's Institute for Partner Education and Development] look at the comparison. I have a philosophy that says we want to listen and respond. I want a value proposition that's differentiated, unique and superior for our customers, and I want a value proposition that's differentiated, unique and compelling for our partners. The IPED study was the first wave of things we're kicking off. That study basically was to tell us are we doing things that help our partners grow faster and have a better profit stream than they would with other choices.

What do partners do to get the customers off the dime right now?

Having clarity on the value proposition is No. 1. If you're not clear on the value proposition it's hard. Having a return on investment that pays back within 12 months, focusing on those projects that partners can be very clear about the value proposition and very clear about the return on investment, I think those projects have a much better chance of seeing success and moving forward near-term than those where the value proposition perhaps isn't as clear.

[Juniper's Value Squared] concept says you've got to, No. 1, have a value proposition for the customer. The more articulate we are on that value proposition in our marketing, in our materials and in our training, the more we can help partners sell that. No. 2, having a value proposition that incents and motivates partners to want to do that, which is the second aspect of that. Enabling partners to make more profit and grow their profit is the second component of that. That's not a linear thing. The more partners are incented to tell that story and the better that story is, that's what creates exponential growth. Whether it's a tough economy or a good economy, that's the focus we have.

What are some of the things Juniper is doing now to help partners grow profit, especially with the economy the way it is now and IT spend being down?

The investments we're making in our marketing around awareness and demand generation that creates a tailwind for partners to get in. If partners can reduce the average days in the sales cycle, that helps them be more profitable. No. 2, we're not competing with our partners on the services front. We're trying to enable our partners. If you look at the partner profitability model, a big part of it is services, the revenue and the profit they make on services. The more that we're creating content, that helps them train their services professionals and the more that we're building solutions that they can build service offerings around, those things enable partners to get leverage and they get leverage on their services business and services profit. And No. 3, when we look at the fact that I think we've got a better margin structure for our partners, not only can they make more on the services and services revenue, but we also think with the product margins we're enabling for partners, they get better margin. The final thing is, partners want to be with somebody who's winning. And I define winning by taking market share. The fact that we took market share in every category we competed for last year means that partners are betting on a winner. We're going to create growth opportunity for them and we're going to do it in a way that allows them to grow profit.

If you were going to tell partners what they should do right now to sell more and build a better business, what would it be?

It's a combination of getting your salespeople trained in skills around the value proposition messages and we'll arm them. Just educate your sales force on the value proposition. We'll run the air cover and the proposition of high performance networking, how we win the bake-offs, lower total cost of ownership and what's the evidence, and choice and flexibility. That's No. 1. No. 2 is build service capacity. The wave of demand for services is coming. Just look at the demand for these products and look at the growth path we're on. Those customers need services to help them architect, deploy and enable those solutions. Those partners who are building skills in their sales force that can tell the value proposition message and those partners that are building service capacity, I think those are the ones that are going to break through and grow the fastest.