Will Juniper continue to be acquisitive? Are you looking to do more acquisitions at this rate?
I don't know if we'll go at this rate, but we will continue to be acquisitive. What you saw us do in 2010 is probably consistent with what we'll continue to do in 2011. Will we make four to five acquisitions? I don't know, but I think we'll make at least two, maybe three, maybe more. It'll be similar to the pattern you saw in 2010: strategic acquisitions that complement the broader agenda we're driving on the new network.
Any comment on the tech segments where those might occur?
Yes. Tuck-ins to complement your existing product areas?
They're all going to be tuck-ins to some degree. They'll be in the domain of networking. We're not confused. Our value-add and core competency is in the network. We're focused on networking and think there's a tremendous opportunity for new value to be created for customers in the domain of networking.
Will your R&D investment increase this year?
We will increase our investment from 2010 to 2011. In 2011, on a GAAP basis, we'll invest about $1 billion in R&D.
How much of an increase does that represent?
It's going to reflect about a 20 percent increase over the prior year, which aligns with our growth aspiration. We're growing top line revenue at 20-plus percent, and the fact is we've got many new ideas and products for innovation and that we think add significant value. So part of what we have to do is be very thoughtful about how we prioritize and sequence those ideas so that they come together and have a market impact and give us good return.
Are you happy with the current mix of enterprise versus service provider revenue at Juniper? Do you see that balance changing at all?
The mix of revenue for service provider versus enterprise has changed over the last three years. I think we had been about 75 to 80 percent service provider to 20 to 25 percent enterprise. Today we're close to, I think, 63 to 64 percent service provider and 36 to 37 percent enterprise, and that's a function of enterprise growing more rapidly than service provider and growing more rapidly because we added new addressable markets with our EX switches on the enterprise side.
But we're focused on innovation with service providers while we expand our enterprise business. For every dollar of R&D we invest, we look to monetize that in both the enterprise and service provider sides. The EX product line is sold to enterprise customers but also sold to service providers. We don't need to build separate products, it's more about building up the go-to-market muscle in enterprise, and that's what we've bee doing. I expect both sides to grow north of 20 percent, and we've increased the addressable market and I expect to have a good growth outlook for the next two to three years.
NEXT: Juniper Will Seek Additional Addressable Markets