Juniper's Return to Relevance

NEW YORK, January 17, 2013 /PRNewswire/ --

As industry shifts force leading rival Cisco to start diversifying, Juniper looks to follow suit with red-hot software defined networks.

At a company event in Las Vegas, networking equipment manufacturer Juniper Networks (NYSE: JNPR) [Full Research Report]^[1] announced that they will be rolling out a new strategy revolving around software defined networks (SDN) in a few months. This comes after their $176 million acquisition of little-known software networking start-up Contrail Systems in December, who was set to develop SDN prior to the acquisition.

A Whole New Ballgame

The move is seen to help Juniper recover from a dismal year, after only raking in $4.4 billion in its previous fiscal year, very small in comparison to direct rival Cisco's $36.3 billion that same period. The latter had previously diversified its offerings, including video, telephony, and computer switching products, while the former specialized in switching gear to telephone companies and ISPs.

The SDN market is seen to balloon from only about $360 million this year to an estimated $3.7 billion by 2016, according to market intelligence firm IDC. However a Techworld report warns that it could become something "like the world cloud, which arguably has come to mean everything and nothing."

Industry Shifts to New Paradigm

Software defined networks will revolutionize computer networking as you know it, by separating the data and control functions in routers and other networking infrastructure, simplifying the adjustments of network infrastructure when adding dozens or even hundreds of virtual machines to enterprise data centers.

Most of networking's tedious chores, like security, can now be done on cheaper servers and remotely programmed for different types of workload. Other processes like delivering Internet addresses and balancing workloads around the network can be done more easily as well.

"If you don't embrace the SDN model, you'll be in trouble," Juniper EVP Bob Muglia told New York Times. He adds that their custom-built hardware would still be attractive because they "make a network run faster than it could" on commodity machines, countering popular belief that the new product could wipe out Juniper's hardware business.

Juniper plans to sell the software based on usage, i.e. the amount of packets going through a system and a number of people using the network, unlike its core products that are being sold by the box. "We wanted something closer to enterprise software licensing," Muglia told New York Times. "Network hardware has no concept of perpetual usage."

Reference Links:

^[1]   The Full Research Report on Juniper Networks - including full detailed breakdown, analyst ratings and price targets - is available to download free of charge at: [http://www.nationaltradersassociation.org/r/entire_report/0702_JNPR]

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