Juniper's Executive Shifts Signal New Direction

Juniper Networks' confirmation Thursday that departing Microsoft Corp. executive Kevin Johnson will take the reins as CEO, while current CEO Scott Kriens will remain on as board chairman, is a sign that Juniper is gearing up to create more of an ecosystem play than just a string of products, solution providers said.

Late Wednesday, Microsoft said that Johnson was leaving his post after a 16-year career with the software maker where he was most recently president of its Platforms and Services Division. Johnson's exit sparked speculation that he would "run" Juniper and that Kriens was stepping down. Instead, Juniper, Sunnyvale, Calif., on Thursday said that Johnson would take on the role of CEO and a seat on the board of directors, while Kriens would remain on as chairman and stay active in strategy and leadership development. Kriens, 50, has held the top executive slot at Juniper since shortly after the company was established in 1996.

"The first 12 years at Juniper have been the most rewarding years of my professional life and I am incredibly proud of what we have accomplished together," Kriens said in a statement. "We are very excited to welcome Kevin as our new CEO. He is a world-class executive, and a person whose values align exactly with the culture upon which Juniper has been built. I look forward to working closely with Kevin in the years to come as we continue to build on Juniper's success."

Johnson, 47, joined Microsoft in 1992 and has led the Platform and Services Division since 2005, overseeing 14,000 employees and products like Windows Vista, Windows Live and Web search. Johnson was also instrumental in Microsoft's so far failing attempts to acquire Yahoo Inc.

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"I am delighted to join Juniper," Johnson said in the statement. "Juniper is a company with a clear technology agenda, great talent and an amazing growth opportunity in a growing industry. I'm looking forward to bringing my experiences to help Juniper scale and deliver great value to Juniper's customers, partners, employees and shareholders."

And while VARs said they don't see the changes in Juniper's executive ranks as earth-shattering, they expect that the most recent appointments are a possible signal of more changes to come.

"They recently have announced a new VP of sales, so it wouldn't surprise me if there are more changes," said Chris Bacerra, co-founder of Terrapin Systems, a San Jose, Calif.-based solution provider and Juniper partner. "I don't expect our day-to-day operations to be effected by these recent changes."

Pat Grillo, president of Branchburg, N.J.-based solution provider Atrion Communications Resources said he was caught off guard by Johnson's appointment.

"There's got to be some angle there," Grillo said. "I'm wondering what's the change and how is it going to affect me."

Jeff Hiebert, CEO of ROI Networks, a San Juan Capistrano, Calif.-based solution provider said the changes likely won't create an immediate impact, but noted that it could be a sign that Juniper is shifting its focus to create a stronger platform play to help it compete against others in the crowded networking field, like market leader Cisco.

"I don't think it will have an immediate impact, but I like where Juniper is going," Hiebert said.

Bringing aboard an executive from a software giant like Microsoft could be seen as an evolution for Juniper and its 10-year-old JUNOS operating system, which also was recently integrated with its security operating system, ScreenOS, Hiebert said.

"Juniper's really trying to align around JUNOS as the operating system; the operating systems coming together into one," he said, adding that Johnson's appointment signifies that Juniper is recognizing the value of software and will likely carry that message forward.

Hiebert's theory coincides with Kriens' messaging during Juniper's J-Partner Summit earlier this year, which focused on what Kriens called "the power of one;" using JUNOS as the one operating system. Along with Juniper rallying around JUNOS, it has also taken to calling itself the leader in high-performance networking gear.

NEXT: More changes in Juniper's executive ranks

Last year, Juniper took in $2.8 billion in revenue. Hiebert said bringing Johnson into the fold could play into Juniper's strategy to grow to a $10 billion to $20 billion company. Juniper is slated to hold its quarterly earnings call after the market close Thursday.

"and#91;Johnson's appointmentand#93; is in alignment with that strategy," Hiebert said.

Hiebert also noted that Juniper may be readying for future mergers and acquisitions, a necessity if Juniper wants to continue growth and become a solid networking rival.

"Obviously, there's a lot of industry consolidation going on," Hiebert said, citing Brocade's $3 billion acquisition of Foundry earlier this week and noting that consolidation may have played a role in Juniper's appointment of Johnson. Hiebert also said that brining a Microsoft mindset aboard could help propel Juniper into its next phase and "take the business to the next level."

Grillo, while he said he's uncertain of which direction Johnson would lead Juniper, said it would make sense bringing on someone from Microsoft to create a stronger platform and grow the company through mergers and acquisitions, two areas where Microsoft has excelled.

Industry analyst and Yankee Group senior vice president Zeus Kerravala agreed. He said Kriens is smart and was able to build Juniper from nothing to a nearly $3 billion company, partly based on luck and Juniper's ability to "build a better mousetrap." But in order for Juniper to build on that success, Kerravala said, the vendor has to diversify and stretch beyond just its routing and security plays.

"Juniper is not a one-trick pony, but it's kind of like a 1.5-trick pony," he said. "They've never become that broad platform vendor, they're a best of breed product vendor. The need to take it to the next level, and bringing on someone from Microsoft can help them do that. There's only so much growth you can get organically. They'll need mergers and acquisitions to continue."

Having Johnson head the company can help Juniper create a stronger ecosystem, Kerravala said, adding that Microsoft is the "ultimate platform vendor." To take that direction, Juniper requires a new leader with a different set of skills.

"Scott gets an A+," Kerravala said. "If there was an award for the best startup of the 1990s, Juniper would get it, but it does require a new skill set to get Juniper to that next level."

And a stronger ecosystem play is good news for the channel. It will offer more integration and make Juniper a different type of company.

"Juniper will start to rely more on an ecosystem of partners for success," Kerravala said.

Hiebert said he's excited about the direction Juniper is taking and he foresees his Juniper business remaining strong, despite the changes.

"Juniper is one of the fastest growing products in our portfolio," he said. "And the momentum is continuing. Juniper is going to be a very big part of our success going forward."

Johnson's appointment comes just weeks after two other major executive shifts in the Juniper ranks.

First, on July 7, Juniper named John Morris its executive vice president of worldwide field operations. In that role, Morris will head Juniper's global sales, services and channel organizations and be responsible for the vendor's global field operations organization. Morris joined Juniper from San Francisco-based Pay By Touch, a biometric payments pioneer, where he served as president and CEO. Before Pay By Touch, Morris worked 23 years with IBM Corp., serving in a range of executive roles, most recently as vice president and general manager of the Distribution Sector in the Americas region. Morris takes over for Eddie Minshull, who will remain with Juniper in an advisory capacity until the conclusion of the third fiscal quarter, which ends Sept. 30.

The following day Juniper appointed Luis Avila-Marco to senior vice president of corporate development, making him responsible for leading corporate strategic planning and the development of key strategic relationships. Avila-Marco joined Juniper from Scientific-Atlanta, a Cisco Systems Inc.-owned company, where he served as vice president of corporate strategic planning during his 14-year career. Avila-Marco succeeded Spencer Greene, who Juniper said took on a new role as the company's senior vice president of customer advocacy.