Page 6 of 6
[Juniper Software EVP] Bob Muglia told me a few days ago that Juniper is acknowledging that it's fallen behind in enterprise security. How do you get your mojo back there?
Here's how I think about the business. Our switching business, through Q3 of 2012, has grown 19 percent year-on-year. We're taking share and growing. That switching fabric business is a healthy business, and five years ago we didn't have that business. It's now more than about $700 million a year. Our entry into switching, we did organically, and at the time, many folks in the industry said you should acquire someone. We built that business organically, though, and it's growing 19 percent year-over-year.
And, look at our routing business. The MX platform is just a workhorse. That's a flagship product of the company. And in addition to that, we've expanded on the high end, with the PTX converged super core, and then there's the ACX, which moves us into the access layer. Now, the total addressable market for routing declined in 2012, mostly due to macro. We felt that, no doubt. But since Q4 of 2011, sequentially we have grown share; look at the Infonetics data. Our routing business is generating a lot of profits for the company, and that's a place customers depend on us.
So, we're healthy with switching and healthy in routing. Then there's security, which I break into two businesses: service provider and enterprise. On the service provider side, I think we've got a very strong business and a solid set of differentiators. In some cases, your ability to handle scale is what it comes down to.
The place where we've lost a little bit of focus is in enterprise security. Back in 2007 and 2008, when we were porting a lot of features from the [NetScreen] ScreenOS code to Junos, we allowed some competitors to get in. But, with Bob [Muglia] and Nawaf [Bitar, Juniper's senior vice president and general manager, Security Business unit], we've changed the management team, and they're on the path of closing gaps. One gap was manageability; we were still using command-line interface. Now, we've got a very solid capability there. We've pushed beyond firewalls into areas like AppSecure, and we're doing some interesting things with [2012 content security acquiree] Mykonos. We're getting back there in enterprise; we're a year and a half into that effort. We've got more work to do. But, we've made monumental progress in the past year, and I think you'll hear it in what the partners say.
You've had some significant turnover lately and some of that's natural with a restructuring. But, a lot of VP and EVP-level exits is concerning. Should we be concerned?
There were several objectives in our restructuring, and they had to do with improving focus, enabling more agility, where in some cases we had too many layers of management and business units doing similar kinds of work, and [being] more efficient.
We eliminated a number of VP-level jobs. We took out layers of management and consolidated groups, and that eliminated jobs. These are good people, and we did have to make those decisions for the right reason and for the company going forward.
People would look at things like Stefan [Dyckerhoff's] decision to become a venture capitalist. He still works for me, not in an operations role but more in kind of a staff role while he's doing his venture capital thing. We're respectful of his decision and his contribution to the company. But, it also highlights that we have a really deep bench. We pop [new Executive Vice President, Platform Systems] Rami Rahim in, and our customers all know Rami and our engineers all now Rami. So, we're not missing a beat.
Another piece of this is broad attrition. Any time in Silicon Valley when you have a hot topic like SDN and you have a company like a Nicira that starts up and then goes for $1.2 billion so rapidly ... well, when was the last time you saw the hype in Silicon Valley around something having to do with networking? There are many benefits to being in Silicon Valley, including access to engineering talent. That's great. In other cases, there are places where you get a push in startups and people wanting to do that, and yeah, we've had some of that.
At the end of the day, we've made the right set of decisions for our company. They are never easy decisions. We had to cut the work force by about 500 employees, and many of those were managers, and many of those were senior managers -- good people whose contributions we appreciate. We made a set of thoughtful decisions. We've got world-class engineering talent and a clear vision for how we're going to execute.