Page 2 of 5
You came from Microsoft and have brought in some other execs who worked at Microsoft. What is your vision for Juniper as a software company?
I joined Juniper now about three and a half years ago, and if you look at how we evolved as a company, we've established a leadership team that's come from many areas of high tech: IBM, Nortel, Sun, Alcatel-Lucent, HP. What we've done is assemble a very talented management team that comes from the diversity of high tech companies, and they bring relevant experience to driving this business.
The second part of the question has to do with software in the domain of networking. When I came to the company, three and a half years ago, about half the employees at Juniper were engineers, and today still half the employees are engineers. This is a very engineering-centric company. The thing I find interesting is that 75 percent of those engineers are software engineers. What delivers the value for us is certainly an investment in silicon and the systems, but a big investment in the Junos operating system. What we've done here in the last few years is to build software on top of Junos. Software that runs in a hypervisor, software that runs on mobile phones, tablets and PCs, software that when we look for solutions for service providers around content distribution networks, we can run software on our MX Edge platform. MobileNext for mobile packet core -- that's software. What we want to do is create impactful solutions for our customers that leverage the work we do with systems, but extends into software the enables a much broader range of solutions and a more flexible way for customers to deploy those solutions.
During your keynote, you brought up Firemon, an example of a partner that bundled a security solution leveraging Junos Space that could then be monetized and sold. That's an isolated example, but how do you encourage more of that behavior with Juniper partners?
The number one thing we've done is create a software developer kit and the toolset for developers broadly, where it's customers, partners, or independent software vendors, to innovate on top of Junos Space and on top of Junos. We've seen dramatic growth in the number of organizations that have embraced that software developer kit, and are doing that uniquely. Some of the organizations innovating on Junos are customers, who have some unique need or feature they want to enable and they see a way to play a role in enabling the solution.
Certainly for partners, it allows them to add another revenue stream for their company. They make money by selling technology products and professional services, and now they can develop innovative technologies on top of Junos and Junos Space. What we're enabling partners to do is expand the portfolio of offerings they have that allows them to drive revenue and profit. If they see a way to improve their margins, they will find interesting ways to invest.
Looking at Juniper's product portfolio, where do you see holes?
Certainly the number one drive for our execution as a company is organic R&D -- the tech we invent and build organically. But over the last two or three years we've also complemented that with a number of acquisitions. We did five acquisitions in 2010 that I would characterize as tuck-in acquisitions: companies that had very interesting intellectual property that related to Junos, and talent and skills in specific areas. Ankeena was an example of a company that we acquired and they became the base of our MediaFlow content distribution software. We acquired SMobile and integrated their [technology] with Junos Pulse for anti-virus and anti-malware. Trapeze filled a gap we had in enterprise wireless LAN.
I think we filled the gaps we identified two or three years go. Now we will continue to focus on things we think will give us synergy -- things that help enhance the MX platform for new services, or things that can help continue to evolve our offerings in the data center for network management. But I think we closed the gaps, frankly, that we had three years ago and now have a very compelling product portfolio. It's the richest product portfolio the company has had in its history.
So when you're looking at areas to supplement, to add to, to enhance as you mentioned, where might you look to acquire next?
Well, it's probably not appropriate for me to comment on any specific area or specific company, but the principles we have used in the last three years will hold true. We look for a strategic complement in the domain of networking that makes financial sense and will drive value creation for our shareholders. Our track record over the last three years has been consistent and will be consistent in at least how we think about M&A.
Next: Juniper's Security Pains