Juniper Banks On JUNOS For 2008

operating system architecture

At the Sunnyvale, Calif.-based vendor's analyst day Thursday, Juniper again highlighted its vision of connecting everything and empowering everyone by leveraging its presence in both the service provider and enterprise markets.

Chairman and CEO Scott Kreins and CTO and founder Pradeep Sindhu kicked off the event, warning analysts and investors that the day's festivities are not of glitz and glamour, but of tried and true vision and innovation as the Sunnyvale, Calif.-based vendor hits its 12-year anniversary.

"What we're going to talk about today is substance," Kreins said in a live Webcast of the event.

Juniper ended last year with $2 billion in cash and investments and devoted $600 million in R&D to solidify the vision, to bring high-performance networking to the next level with open networks, strategic partnerships and operational excellence.

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"It's not really about individual service providers, it's about fast, reliable and secure access to applications and services," Kreins said, adding that Juniper will focus strongly this year on connecting users, the enterprise, service providers and content with one architecture running on top of its JUNOS operating system, a mission Kreins called "the power of one."

"It doesn't make coffee. It doesn't change the world. But it does work," the CEO said of JUNOS.

Sindhu, in the same vein, said the "infrastructure for global communications and global information processing is going to change in a dramatic way." Using the "power of one" strategy by running JUNOS on Juniper's cadre of routers and switches can help that change.

"We have one operating system. We have one release strain. And we have one architecture," Sindhu said.

Earlier this year, JUNOS took center stage when the vendor released its first ever line of enterprise Ethernet switches, the EX line, which runs on the operating system. Adding Ethernet switching to its portfolio of routers and security products is going to be a key differentiator going forward, said Mark Bauhaus, Juniper's executive vice president of service layer technology.

"We're in a completely different place now," said Bauhaus.

And according to Eddie Minshull, Juniper's executive vice president of field operations, Juniper's stable of channel partners and systems integrators are going to be crucial in cementing Juniper's go to market strategy for JUNOS and the rest of the vendor's solution sets.

"Teaming with our partners is crucial," he said. "I don't want us to have overlap with them. We will partner in a very professional way with our partners."

Frank Vitagliano, senior vice president of worldwide channel sales, agreed. He said Juniper maps its channel to customers that will work well with them and allow partners to work independently, but enabled by Juniper, enhancing the value proposition for partners. Juniper currently has 4,459 active partners, 471 elite partners and 520 select partners who are responsible for more than 90 percent of Juniper's sales achievements.

"What that means to the partner community is that it helps reduce partners' cost and eases installation and serviceability," Vitagliano said.

Phil O'Reilly, CEO of Solunet, a Melbourne, Fla.-based solution provider, said Juniper and its solutions give him the ability to move forward as an independent company with the backing from a marquee vendor.

"I need to work with partners that allow me to present Solunet as a brand," he said, adding that Juniper allows and encourages him to do that. "We see the value of Juniper because of that supportJuniper has always carefully managed the channel."

O'Reilly added that the ability to offer a single operating system has enabled him to get into new accounts and offer end-to-end solutions and that Juniper is helping the channel capture presence in the market.

Along with discussing how it plans to leverage JUNOS going forward, Juniper also outlined its financial outlook for 2008. Juniper said Thursday it expects a 20 percent revenue growth for the long-term, with an added jump this year, CFO Robyn Denholm told investors.

According to Denholm, Juniper expects revenue to hit $3.4 billion to $3.55 billion in 2008, representing a 20 percent to 25 percent increase over its 2007 revenue of $2.84 billion, a slight but realistic slowdown on the 23 percent year over year revenue growth Juniper achieved from 2006 to 2007. Denholm added that Juniper expects gross margins of 66 percent to 68 percent, compared to 67.9 percent reported last year.

Along with outlining its financial outlook for analysts and investors yesterday, Juniper also announced Thursday its plan to buy back up to $1 billion in common stock, a move approved by its board of directors. The new stock purchase program will include Juniper initiating an on-going share maintenance plan designed to offset dilution from the issuance of shares related to its employee stock plans.

In a statement, Juniper said the new program is in addition to the $2 billion stock repurchase program approved in 2006 and 2007. To date, Juniper has repurchased $1.7 billion of its stock under the $2 billion authorization.