Building A Smarter Network

Barely past the one-year anniversary of its entrance into the enterprise market via its purchase of security vendor NetScreen Technologies, Juniper is at it again, this time with plans to buy itself an expanded enterprise networking portfolio.

The company last week said it will acquire two privately held networking startups: WAN optimization vendor Peribit Networks for $337 million and Web application acceleration vendor Redline Networks for $132 million, deals scheduled to close in the third and second quarters, respectively.

Juniper this week is also hosting its first Juniper Partner Summit in Las Vegas, where it plans to further strengthen its enterprise channel strategy with the rollout of Services Affiliation, an extension of its J-Partner Program. Under the new initiative, partners with extensive professional services practices can earn a badge that differentiates them from their competitors.

Also at the conference, Juniper plans to lay out details of its Enterprise Infranet strategy, a new security architecture that aims to coordinate network, application and end-point intelligence to provide stronger protection through authentication and authorization. Three hundred partners are expected to attend the conference.

Now, with the new acquisitions, Juniper is also addressing application performance and security issues that arise as customers seek mobile access to applications that were originally built to be connected to local users, said Scott Kriens, chairman and CEO of Sunnyvale, Calif.-based Juniper, during a conference call last week. Juniper plans to explore ways to integrate the new capabilities with its existing enterprise security and routing products, he said.

"It's all around the same theme, which is learning a lot more about the traffic flows and then in realtime using that knowledge to make important decisions," Kriens said. "Tying it all together is a tremendous opportunity. By operating in concert with firewalls, for example, you can make decisions about traffic before it gets encrypted, and if you operate independently and you're assembling a chorus line of these point products, you can't do that."

Solution providers viewed the buying spree as evidence of Juniper's commitment to the enterprise market.

"These types of acquisitions are exactly why we have made a profound decision to commit to Juniper," said Bernie Mikula, CEO of Go2 Communications, a solution provider in Woburn, Mass. "The Peribit and Redline products fit exactly into the networking security and mobility solutions we strive to provide to our customers."

Go2 Communications just recently signed on as a Juniper partner with plans to exclusively represent its security and networking products, a strategy Mikula hopes will earn him status as a go-to partner.

Mikula took the same approach with Cisco Systems in the late '90s as co-founder of solution provider Re/Com Group, a successful strategy that culminated in the sale of the business to Dimension Data in 1999. Now Mikula is ready to make the same high-level commitment to Juniper, dropping partnerships with competitive security vendors Aventail and Fortinet to focus solely on the Juniper portfolio. "We think [Juniper wants] to be the next Cisco. We think they want to compete," Mikula said.

The Services Affiliation rollout also drew praise from partners. "The program takes an existing strength of ours and blows it up into the forefront," said Steve Fuller, president and CTO of Networks Group, a Brighton, Mich.-based solution provider.

And partners said the vendor's new security architecture should help them meet complex customer needs. "Enterprises want to have tools like this. It's the holy grail of what enterprises are looking for," said Jason Gress, founder and executive vice president of InterVision Systems Technologies, a solution provider in Santa Clara, Calif.

But while solution providers lauded the addition of new networking technologies to Juniper's enterprise arsenal, they also said the company still lacks a key piece of the infrastructure puzzle needed to truly contend with Cisco: switches.

"If they're really going full-fledged—and I do think with the NetScreen purchase they've taken the gloves off and are taking a swipe at Cisco—then they should go for it and add that [switching] portfolio to the mix," said Tom Duffy, president of IGXglobal, a solution provider in Rock Hill, Conn., that partners with both vendors.

Solution providers are floating names such as Enterasys Networks, Extreme Networks and Foundry Networks as potential acquisition targets that would add the switching portfolio they say Juniper needs. Some partners said they'd also like Juniper to consider bringing on other technologies, including wireless and VoIP, to broaden its portfolio.

"More partners and end customers would like us to bring [on] more products because of the success they've experienced with our current portfolio," said Tushar Kothari, vice president of worldwide channels at Juniper. "We have obviously both internal R&D and other efforts to bring more new products and new technologies to the mix here, but we're really focused on where we can make a difference. We don't feel compelled to offer everything," Kothari said.

Instead, Juniper is building partnerships with VoIP vendors such as Avaya and Siemens, he said.

On the switching front, Juniper's strategy has been to ensure interoperability with a wide range of infrastructure vendors, Kriens said in an interview with CRN ahead of the company's recent acquisitions. "We certainly partner in the sense that we market and interoperate with any or all of the switching vendors. We deliberately don't want to put hooks in there that lock people into making a switching choice," Kriens said. He declined to comment on whether Juniper plans to acquire a switch vendor.

When asked about Juniper's entry into the enterprise router market during a press conference last month, Cisco President and CEO John Chambers said San Jose, Calif.-based Cisco's ability to combine multiple infrastructure technologies gives it an edge over competitors. "The enterprise marketplace is often driven by switching first, and routing combined, and security implementation [added] into that," Chambers said. "If you watched what we did shortly after Juniper announced their low-end entry into this marketplace several months ahead of us, we now have about 95 percent market share there. By definition. if they gain one router they gain market share because they have not had a presence in that, but I think we're really well-positioned," he said.

Solution providers said stiff competition between Juniper and Cisco helps everyone in the long run. "I want them to try to take [Cisco] on because it stirs things up," IGXglobal's Duffy said. "It brings out the creativity in both organizations."

One critical element to Juniper's enterprise networking strategy that has yet to prove itself is its J-series access routers, which began shipping in late 2004. Juniper faces the challenge of building up networking expertise within its channel, either through recruiting new partners or fostering new skill sets among the cadre of security-focused partners it inherited from NetScreen.

Solution providers said customer acceptance of the new routers is on the rise, with several reporting that the routers now account for as much as 25 percent of their Juniper business.

In their first full quarter of availability, J-series routers contributed $1 million to Juniper's $449.1 million in sales for its first quarter, ended March 31. The vendor doubled its overall revenue compared with the year-ago quarter, with 71 percent of sales going through channel partners.

Still, some partners caution against shadowing Cisco too closely.

"One concern is that they're just trying to rebuild the Cisco channel," said Dan Wilson, vice president of vendor relations at Accuvant, a Denver solution provider. "I hope they don't follow the same track because then, great, they're the same as Cisco, just smaller. I think they are recognizing that."

In particular, partners are bristling as Juniper pursues its strategy to tap its extensive service provider customer base as channel partners. Cisco traveled the same road, leading to margin pressure for traditional partners as service providers cut prices on networking gear to facilitate circuit sales.

Wilson said he has recently lost out on some Juniper deals to AT&T because of aggressive pricing. "It's only been a couple of deals, but the problem is the ones we lost out on have been big ones," he said.

Kriens said Juniper's traditional channel partners can protect themselves by building out their professional services capabilities, such as project management and network design, which carriers are not equipped to provide. His advice fits into his overall goals for Juniper's channel partners this year.

"I'd like to see our partners make more money with those native skills and be positioned as experts and as trusted advisers and partners to their customers," Kriens said. "If we can help more of that happen, and the more quickly it does, then the more powerful our leverage will be."