Q&A With Kevin Johnson, CEO, Juniper Networks

Kevin Johnson, Juniper Networks Inc.'s CEO, knows that taking on Cisco Systems Inc. in the crowded networking space is an uphill battle. To be a true contender, Juniper must hone its high-performance networking story and build out a robust product portfolio to rival not just Cisco, but a host of other competitors that are jockeying for the No. 2 spot to Cisco's No. 1.

Johnson also knows that Juniper can't combat the competition alone. The Sunnyvale, Calif.-based networking vendor has a clear agenda and plan of attack, both of which rely heavily on the channel and Juniper's cache of partners across the globe.

CRN Senior Editor Andrew R. Hickey sat down with Johnson, who took over as CEO in September 2008 after more than a decade with Microsoft, and dig into Juniper's strategy, product offerings and plans for itself and its channel partners. Johnson also outlined how Juniper plans to compete against Cisco and a host of other networking vendors that are all clamoring for a bigger piece of the pie. Here are excerpts from that conversation.

CRN: Do you have a clear-cut plan of attack against Cisco or the others in this space and how Juniper is going to compete against them and how you're going to go after their market share?

Johnson: Our plan really is focused on the customer. Our plan of attack is really how we deliver value to the customer. Do we have to ensure that our value proposition is something that's unique and differentiated from all of the other competitors? Absolutely The bake-offs that we've done, whether it's SRX or bake-offs on the EX product line, what we're doing with Stratus, that shows that we can win in areas where people want to measure scale, reliability, performance and security. We have a very clear three-year plan, we have a product road map, a set of innovations and a set of investments we're making -- it's all about generating a set of solutions that adds value to the customer. We think at the end of the day if you focus on the customer, that's how you win against the competition.

CRN: How do you plan to get the Juniper name in front of the customer? There are a lot of Cisco bigots out there. What are you and your partners going to do to get in front of customers?

Johnson: 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 providers of high-performance networking [there are], 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.

We launched an ad campaign in February called "Demand More" and it's basically around the premise that enterprise customers are demanding more. They're demanding more of their network providers. They're demanding more of their technology vendors. And we're in a unique position to deliver on many of the emerging needs and requirements that these customers have.

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

Johnson: 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. That's an area that I think the feedback that I've had from our partners, their request for us is 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.

CRN: What are the missing pieces of the puzzle of Juniper's high-performance networking story? You have VoIP with Avaya. A lot of people say wireless is a missing piece. What is Juniper lacking for that story to be fully complete?

Johnson: Number one, I think it's important to reflect on the gaps in the product portfolio that we've closed in the last year. In this last year we delivered a complete portfolio in our switching lineup. In addition, we've enabled a whole new set of solutions with the SRX that brings together switching, routing and security both at the highest of the high end and at the branch, the lowest of the low end. So we've closed those gaps in our product portfolio. On the routing side with the MX we released something called the Intelligent Services Edge where we now have third parties innovating on top of the routing. We've closed a lot of what would be perceived as gaps in the portfolio over the last year.

Looking forward, do we have opportunity, do we have intent to continue to build out the portfolio? Yes. Enterprise wireless LAN is an opportunity. Look at the data center. We've laid down a set of investments around the Stratus project, really changing the landscape of data center, that combined with the high-end SRX. But there are opportunities there. When you look at things like application delivery control, that's an opportunity. When you look in the service provider segment, there's mobility solutions on the edge that I think are opportunities. There are opportunities to continue to build out the portfolio.

CRN: Your largest competitor does a lot of acquisitions -- is that something you don't want to do? Is there a possibility that you would do an acquisition?

Johnson: It's possible that we'll do an acquisition, and here's the way I frame it: Number one, we are a pure-play in high-performance networking that embraces partnerships, so any acquisition that we would consider would be part of high-performance networking. We're not confused about what we do and what we do well. We recognize there are some gaps in the product portfolio, whether you look at application delivery controllers, you look at enterprise wireless LANs, you look at mobility solutions. So we'll consider in those areas where we have gaps. But we're a pure-play in high-performance networking. Number two, our primary value creation strategy is organic. It's organic R&D. You see the investments we make and you see the products coming out the other end and that's helping us. We will consider M&A where it makes sense. Certainly, we've been thoughtful about how we've deployed resources in the economic downturn and now that we see some stabilization occurring it's probably a better time to continue to be thoughtful about that but also be mindful that there may be some M&A activity that makes sense.

Anything we do would have to make sense from a strategic standpoint and from a financial standpoint. It's got to have a good strategic rationale and financial rationale and be something we felt we could manage the integration risk. If those things are true and it makes sense, we'd certainly consider it.

CRN: Has the competitive landscape for Juniper changed recently? Cisco is your largest competitor, but who else do you run up against? Have you run into Brocade/ Foundry or others?

Johnson: There are a range of competitors. In the service provider segment, there are companies like Alcatel-Lucent, Huawei and others that we run into. In the enterprise what you see is consolidation taking place, whether it's Brocade/ Foundry, HP being more focused with ProCurve. I think some of the smaller competitors we see less and less and I think that's just a function of if you're a smaller niche competitor it's harder to break through. We're fortunate that we can build out a strong enough product portfolio in many areas that it's actually getting traction. The fact that one-third of our EX customers are new customers to Juniper and over 50 percent of our EX customers in the last quarter purchased multiple products, switching, routing and security, having that portfolio I think we're in a unique position.

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

Johnson: 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.

CRN: 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?

Johnson: 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. Number one: 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.

CRN: Can you give a little insight, on a more personal level, into coming from a massive corporation like Microsoft and coming to Juniper, which in many ways is in the shadow of a massive corporation [Cisco]?

Johnson: Microsoft wasn't always a massive corporation. When I started at Microsoft I think they had come off a year where they had earned about $1.8 billion in revenue and there were 7,000 or 8,000 employees. That was back in the early 1990s. Much of my experience at Microsoft was a growth company; growing and building and bringing new products to market, recruiting new partners and growing a business around a company that was a technology company and believes in a technology agenda. I think there are many parallels to Juniper. Juniper is a technology company. Juniper has a technology agenda. And Juniper is a growth company. This company is 13 years old. You look at the future and whether it's the digital decade that we're in, the growth of the Internet, the importance of networking is just going to go up. In many ways the excitement, the energy and the enthusiasm that the employees at Juniper have, that our partners have, are many of the same things I saw at Microsoft in the early '90s when I joined that company.

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