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Your CFO said during a December conference that you'll end up having spent your usual $1 billion in R&D again for 2012. Where does most of that spend go?
The way we think about it is in terms of the three businesses we have: our routing business, our switching business and our security business. Underpinning each of those businesses is the investment we make in custom silicon, and on top of that is the way we innovate on systems that allow customers to take advantage. Those systems have a long and useful life, and we enhance them from time to time.
About half of the company's employees are engineers. Of those engineers, 85 percent of them are software engineers. So if I think about R&D resource deployment, some of it is software related to Junos and to the routing protocol. Some of it is in security. Some of it is investment now going into the SDN concept and in areas like Junos Space. Each business we have has a silicon, systems and software component to it.
You've admitted recently that the customer ramp-up with QFabric was slower than expected. What has to change about your approach?
There are three things that I think are contributors here. One, there was a set of software features that customers had asked us for and that were just delivered in the last six months. Some of those had to deal with high availability, some with customers wanting to do things with the interconnect, others with multi-tasking. It was a set of software features that took us a while to develop, so that slowed some adoption.
Second, the assumption we had with QFabric was that customers would want to architect a data center using one large fabric -- a large interconnect. What we found was that many customers liked the concept of QFabric but were concerned that a single fabric in the data center would be a single fault domain. So, with the M-series QFabric -- the microfabric as some refer to it -- there is a change in price point and capability, and since we've introduced that, we've seen a number of customers that have deployed the microfabric to multiple domains of their data center. Fox Sports and Yahoo Japan are examples of these customers.
The third thing is that in some cases, the hype around software-defined networking has caused customers to slow down and try to put a value on what does SDN mean. In many ways, QFabric is implemented with SDN concepts: The director is the software that runs outside the box that provides the control to the interconnect. But, it needs to do so with proprietary [technology]; there are not industry-standard protocols than can do some of the things that QFabric does today.
So, what we see today is customers that need to have high-performance access to what the compute [portion] is doing. Fox Sports is an example of that. They have a lot of video that needs to be edited, so the compute has to have rapid access. That's a perfect case for QFabric.
Overall, QFabric continues to grow, and we continue to enhance the feature set for our customers, including how to use SDN complementary to QFabric.
Those customer care-abouts in the software features, they weren't things you could have known ahead of time? QFabric was in development for so long.
Some things we knew, and that it would take time. Some of them were customer feedback, so it was a mix.
Is QFabric a success?
I think it is a success on many levels. We took an innovative approach to doing the data center in a different way and we delivered that. Customers are getting great benefits. Would we like to see faster growth? Yes, we would. The company has learned a tremendous amount from our innovation and QFabric that is now going to help us with SDN. That's something we have that's unique to Juniper: We have a single network operating system, a single software base to build upon. These are the unique assets that will help us going forward.