Juniper CEO: Company Continues To 'Double Down' On Innovation

Juniper CEO Kevin Johnson took the reins of the company just days before Lehman Brothers imploded and the U.S. economy collapsed in the fall of 2008. In the throes of the worst U.S. recession in three quarters of a century, Johnson made a conscious decision to push innovation and take the company further into the mobile and cloud space. And looking back over the last two years, the former Microsoft executive said that he plans to stay committed to that philosophy.

Juniper's commitment to innovation, its mobile ambitions and cloud investment were some of the most significant topics reviewed in a discussion with Morgan Stanley Managing Director Mary Meeker at the Marriott Hotel, in Santa Clara Calif. Tuesday evening at a Churchill Club event.

Kicking off the discussion, Johnson told Meeker that in light of the impending economic meltdown, investors required him to cut 15 percent of the company's staff just days after he took the helm at Juniper.

Despite much "consternation" from investors, Johnson made a decision to "double-down" on R&D, contending that the future of the company was in enabling and protecting the mobile space as well as extending its offerings to the cloud.

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"To me it was important to put a stake in the ground early," he said. "Not making a decision would have been the worst possible decision."

Johnson said that the decision to invest further in the mobile space was reinforced with the exponential rise of Internet-ready devices, such as smartphones, the iPad and an array of tablet computers that spurred the trend of consumer mobile devices used in the enterprise.

"Consumers are the first to adopt a new technology," Johnson said.

"One of the trends is this insatiable demand for humans to be connected to other humans," he said, adding, "at the end of the day, they're going to want it, and they're willing to pay."

The increasing demand for mobile devices opens up a wide swath of opportunity for Juniper's Junos Operating System to be compatible on mobile platforms. In particular, the mobile revolution also offers opportunities for the company to expand its footprint in the mobile security space, he said. Looking ahead, Johnson said that security and compliance will likely be two of the biggest IT issues for businesses.

"Once you had a lot of people running PCs. Once they were connected to the Internet, it created the perfect storm for bad players to write malware," Johnson said. "The same scenario was happening in the mobile space."

And some of the biggest opportunities in the mobile space are in emerging markets, such as India, China and Brazil, which have experienced a rapid upsurge of Internet-connected devices in recent years that have "leapfrogged" over the PC market.

Meanwhile, Juniper's investment in R&D is a strategy that seems to be paying off, Johnson said, adding that he's also seeing increased technology investment from the company's end users customers. While IT spending was down across the board in 2009, Johnson said that he is now consistently seeing end user customers consolidating data centers and gradually moving to virtualize much of their IT environments and migrate to private clouds with the aim of expecting reasonable returns in three to four years. The increased investment is necessary for them to cut costs, enable them to be more productive and more efficiently conduct "mission critical" tasks," he said.

"It's mission critical for them to invest in their business. Private cloud investment is happening there today," he said. "In pockets, customers are being thoughtful about that ROI."