Juniper Sets Sights On Nortel Partners

Juniper Networks smells blood in the water and is plotting an attack to woo Nortel Networks partners away from the struggling networking vendor and bring them into their own camp.

On Monday, Sunnyvale, Calif.-based Juniper issued a letter to Nortel partners, opening its arms to them as they navigate through economic uncertainty and evaluate their vendor partnerships.

Last month, Nortel posted $3.4 billion in losses for the third calendar quarter. To offset the slump in sales, the Toronto-based company said it will slash costs resulting in 1,300 layoffs, a salary freeze, a hiring freeze and a review of its real estate holdings. The $3.4 billion quarterly loss was Nortel's biggest drop in seven years, despite two years of job slashing, which in 2007 saw Nortel cut 3,900 employees and 2,100 more in 2008.

Juniper, on the other hand, closed out the third quarter of 2008 with revenue of $947 million, up 29 percent from the prior year, marking its most successful quarter to date.

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Juniper is looking to capitalize on Nortel's plight, encouraging Nortel partners to jump ship.

In the letter to Nortel partners, Frank Vitagliano, Juniper's senior vice president of worldwide channels, wrote: "At Juniper Networks, we understand it can be challenging to navigate the current business landscape while continuing to add value to your customers. In today's troubled climate, you may have concerns about your continued ability to provide high-performance networking solutions to your customers. We want to help."

The letter continued: "Our partner-dependent strategy means Juniper is always in support of your brand -- we want to be your partner, not your competitor. Mutual profitability is at the heart of every engagement where your product expertise and service capabilities are emphasized. It's why our J-Partner program receives the highest marks in partner profitability in industry surveys."

Despite the appearance that Juniper is only looking to poach away Nortel's partner base, Vitagliano said Juniper is using Nortel's struggles as an opportunity to tell new and existing partners that Juniper plans to invest across the board in the channel and that it believes partners can and will survive the economic downturn.

"It's really not about necessarily any specific competitor," Vitagliano said. "It's a mindset right now that we're taking a long-term view ... Successful companies can prosper during these times if a.) you continue to do things you're good at and b.) if you continue to invest."

Juniper has vowed to continue to invest in both existing and new partners, Vitagliano said. It just so happens that Nortel's troubles have opened the door to effectively get that message out.

"We've got the ability here to differentiate ourselves and to be faster, more nimble and more focused than larger companies and stronger and more resilient than smaller companies," he said, noting that Juniper expects that when the economic dust settles Juniper will "come out of it on the back end in a stronger position."

Vitagliano said he's extending the offer for Nortel partners to consider Juniper and its complete end-to-end product set.

"You'd have to be unconscious to not be cognizant, or at least wary, of what's going on in the market. It's very, very concerning," Vitagliano said, later adding that "given the current environment we think it's a good time to begin to target opportunities that have been out there."

Some partners, however, said they plan to maintain their vendor relationships, despite the uncertain economic climate. The president of one Pennsylvania-based solution provider said his company's relationships with both Nortel and Juniper remain strong, and the fact that Nortel is struggling isn't reason enough for him to abandon the vendor.

"I'm loyal to Juniper and I'm loyal to Nortel," he said. "I'm not looking to replace Nortel unless Nortel goes away."

NEXT: Juniper Continues Channel Investments

For Nortel partners that do defect, Vitagliano offers the promise of continued investment in the channel and partner profitability, an important area where Juniper recently ranked first in our Annual Report Card for network security appliances. Juniper also received high praise for communication, revenue, its partner portal and services opportunities.

"First of all, we work really hard to earn partners' business," he said, adding that "we know how to team and we know how to work in the marketplace."

Vitagliano pointed to the three years Juniper has spent developing its solid channel foundation and its ever-growing product portfolio, which in the last year has seen the end-to-end story come together with the addition of its first ever enterprise Ethernet switching line, the EX Series, the integration of its security offerings with the JUNOS operating systems and its recently unveiled data center solutions strategy.

And for partners who do make the jump to Juniper, Vitagliano said Juniper is ready with training and enablement offerings, Fast Track certification plans, Webinars, demo kits and a Juniper conversion kit to get them up to snuff as fast and as cost-efficiently as possible. Additionally, financial incentives, details of which have not been released, will also be offered, Vitagliano said.

"We've put together a beneficial Fast Track program and set of customizable incentives to make it as easy as possible for you to become a J-Partner," Vitagliano wrote in the letter to Nortel partners.

"This isn't just about targeting new partners and different partners," Vitagliano said. "It's an overall plan to invest in programs and offerings and more resources."

Blaine Raddon, Juniper's vice president of U.S. sales, agreed, and said the big picture is to get the Juniper name on more partners' radar screens.

Vitagliano and Raddon both said critical areas like networking infrastructure and security won't be hit as hard in the downturn. Instead, partners will be called on to help their customers not only fortify those critical areas, but to also help them find cost-savings options, enabling partners to bring more value to the table.

"It opens up the door in that customer to sell more products," Raddon said.

Overall, Raddon said Juniper's partner base is confident that it will weather the economic storm, despite the air of uncertainty.

"Our partners have a strong sense that they can make it through this," he said.

Vitagliano also noted that partners are approaching current market conditions with "cautious optimism," and said the onus falls on Juniper to enable partners to succeed despite the current climate.

"There clearly is a lot of uncertainty in the marketplace," he said. "No vendor can control the external environment. What we can control is how we approach it. We know partners have a lot of choices and we know we have to earn our partners' business. It's critical that partners recognize that we're going to be there, we're going to be consistent and we're going to be a vendor that partners can depend on in good times and bad."