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Juniper branches into Net-based services

The networking company says it will ship new technology that allows telecommunications service providers to offer more sophisticated services to business customers.

Juniper Networks, which historically has sold hardware, is branching into Internet-based services to customers.

The high-flying networking company on Tuesday announced it will ship new technology that allows telecommunications service providers to offer more sophisticated services to business customers, such as virtual private network (VPN) services. VPNs offer businesses inexpensive and secure high-speed connections to corporate networks over the Internet.

With the move, analysts say Juniper expands its list of competitors from Cisco Systems to include a raft of other networking companies that offer similar Internet-based services, including Nortel Networks, Lucent Technologies, and start-ups such as Ennovate and Cosign.

Juniper has historically built "routers" that help telecommunications carriers and Internet service providers build faster networks. Routers are devices that ship Internet traffic from point to point along a network at high speeds.

The company has succeeded in high-end routers, devices that sit on the "core" part of the network through which most Internet traffic travels. It has captured about 33 percent of the market, while Cisco has about 60 percent.

Cisco owned virtually the entire field several years ago. Most recently, Juniper began targeting the "edge" of the network, where routers sit at the point where private business connections for corporations intersect with the public Internet. It is a market also dominated by Cisco.

But now for the first time, Juniper is focusing its efforts on software--and on the ability for its service provider customers to offer new moneymaking Web services to businesses, analysts say.

"Up until now they've been introducing hardware products. Now they're introducing services on top of them," said Jennifer Pigg, executive vice president of analyst firm The Yankee Group.

Compared with other network equipment makers, Juniper is late in offering Web-based services to customers, but it's part of Juniper becoming more of a mature networking company, Pigg said.

"They had an effective strategy with a laser focus on the network core, but they can't live on that market forever," she said.

To offer the VPN services, Juniper on Tuesday released updated versions of its software that runs on its routers. The company also released new add-ons, or interfaces, for its networking hardware that allow service providers to offer businesses more options for high-speed Internet access, said Carl Showalter, Juniper's vice president of marketing.

If businesses' bandwidth needs grow, service providers installing Juniper's new interfaces can give customers more bandwidth quicker than before, Showalter said. For example, service providers can give businesses more bandwidth by bundling multiple T1 lines together.

Juniper has also released new software that allows service providers to give businesses priority over their use of network bandwidth, Showalter said. For example, to ensure good voice quality, phone calls over the Net can have more priority on a network than less important needs like e-mail, he said.