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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