Strategy or Tactics?

Juniper’s partner conference this week has managed to catch the eye of Wall Street, which makes it more important than these sort of events typically are.  It’s not an accident; Juniper has been promoting its event more than usual too.  The new J-Partner program will spend more, promote partnerships more, and be dedicated to “driving deeper, more profitable relationships” between Juniper and its partners.

The Juniper event comes on the heels of Alcatel-Lucent’s announcement of ng Connect, an ecosystem of companies designed to create solutions and services for the NGN.  What’s interesting isn’t that I believe the two companies are vying for the same media attention, but rather that the two activities are so close in time and so different in direction.  They are so different, in fact, that you could say they’re not competitive, and yet the events may frame a contest that will have a real winner and loser.

In some ways, Alcatel-Lucent and Juniper have a similar problem.  The network equipment market is definitely under pressure, and the pressure is created by a lack of “new money” to drive buyers.  For service providers, the issue is declining revenue per bit.  For enterprises, it’s the lack of new productivity benefits to drive new project spending.  Both Alcatel-Lucent and Juniper are facing their own sales and profit pressure, created by the market conditions.  But the responses are very different.  Alcatel-Lucent has taken a very strategic step with ng Connect, and Juniper is taking a very tactical one with J-Partner.

Alcatel-Lucent seems to believe that the problem in the market is one of finding a buyer business model, a strategy that sells by helping the buyer make the case to buy.  Their ng Connect program isn’t about products, it’s about finding a path toward solving buyers’ business problems.  The approach seems to be to build a solution/service ecosystem, and it’s a step that suggests that the company is prepared to go toe to toe with competitors once the buyers get an idea of what their ecosystem would need in the way of product.  To Alcatel-Lucent, the problem is coming to terms with NGN.

Juniper has always been a tactical player, sales-driven, much like its arch-rival Cisco.  A partner program is an approach to quickly increasing sales, it’s a “channel program” because it channels products to the buyer.  The buyer business problems in the tactical world are a given; they’re whatever’s driving the hand that signs the check.  The goal of a partner/channel program is to get the product out there in a lot of partner hands, so at least one partner will intersect with that first hand, the one that’s holding the pen.  Feet on the street.

So how do strategy and tactics compare?  The obvious point is that tactics could pay off quicker than strategy because they influence near-term buying.  Whether you build channel programs on “solutions” or “products”, meaning whether you have partners adding significant functional value or not, is less an issue than whether there are near-term opportunities you can grab onto.  Do the buyers have money to spend, or do they need help finding a paradigm to invest in?  In the service provider space, I think the latter issue dominates.  That, of course, is where Alcatel-Lucent and Juniper compete head-to-head.  But Juniper is also an enterprise player.  Does the enterprise have a paradigm in play that will drive network purchasing, or do they need a strategy too?

That’s the question that 2012 will likely answer.  Everyone, myself included, has said that enterprise IT spending is being driven by data center evolution—first in the form of consolidation and virtualization and now in the form of the cloud.  But cloud projects, according to my survey, are the most behind of all projects and the most likely to fail or fall short in terms of benefit realization.  How much strength is there in the cloud as a driver of change, a driver of network spending in the enterprise?  That’s one big question for Juniper, because tactical channel programs will fail if tactics aren’t enough.

Strategy has its limitations too, though.  Look at Yahoo and Jerry Yang.  The company’s stock went UP yesterday when it was announced that Yang was departing.  His strategy, his vision, turned out to have feet of clay and his idiosyncratic views were certainly a factor in making a once-giant firm into something that’s teetering on the edge of being an also-ran in a market it arguably helped create.  With tactical approaches you can at least see whether you’re being successful and make changes quickly.  With strategic initiatives, it’s too late to fix a problem once it’s been recognized.  So will Alcatel-Lucent’s history of vision carry the day here, or Juniper’s focus on sales?  We’re going to know for sure in 2012, folks.  Somebody may be joining Yahoo in the Tech Hall of Declining Relevance.


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