How Juniper hopes to manage the recession
After a killer 2008, the company is now managing through troubled economic waters like everyone else. What's Juniper's strategy?
I just returned from a two-day industry and analyst event hosted by Juniper Networks. Last year, Juniper held its conference in swanky Dana Point, but this year's event was held at the San Mateo Marriott near the San Francisco airport.
A sign of the times? Definitely.
After a killer 2008 in which the network-equipment maker increased revenue 26 percent over the previous year, the company is now managing through troubled economic waters like everyone else. What's Juniper's strategy now? New CEO Kevin Johnson laid out it at the event. His plans include:
• Staying focused. Don't expect to see Juniper get into server hardware or telepresence like much-bigger rival Cisco Systems Rather, Juniper plans to maintain a laser focus on (as we say in Boston) wicked-fast networking. Oh, and don't expect that Juniper will buy Aruba or voice assets from Nortel Networks. Juniper is following a conservative M&A strategy.
• Investing heavily in R&D. Companywide, Juniper eliminated 100 jobs in December, is reducing marketing budgets, and streamlining dependence on outside contractors. However, it will continue its weighty investments in R&D.
• Carefully building its enterprise business. Between switching, routing, and security, Juniper has a core networking-product portfolio to compete with Cisco in large organizations. That said, Juniper is still a relative unknown to enterprise CIOs. Juniper will invest in marketing and sales automation to expand its enterprise presence while lowering its cost of sales.
Like other tech companies, Juniper said it is limited in its ability to forecast sales right now, so it will manage its business tightly on a quarter-by-quarter basis. The financial analysts on hand pressed Juniper to elaborate on what this means in terms of sales and margin, but the CEO and his team remained tight-lipped.
I wasn't surprised by anything Juniper said, and I'm encouraged that Juniper will continue to innovate and invest in R&D as its technical advantages have always been a strategic asset.