Juniper is an interesting network equipment vendor, perhaps the only major pure-play IP and Ethernet vendor out there. They’re also in the midst of a major revenue issue, as this Light Reading story shows. There seem to be paths Juniper could take to get out of their current dilemma, but those paths have been open and unused for several years. Will the company turn around, and if so, what might it have to do for that to happen?
I remember well the foundation of Juniper. Their original story was that they were a true standards-based router product to counter Cisco’s push toward proprietary technology that locked users in. That was a good story, one that grew Juniper a lot and made them a worthy rival to Cisco. I remember when Juniper was resisting entry into the data center switch space, despite warnings (including mine) that the space would eventually be critical for them. I remember when Juniper had the best marketing campaign in the industry with cartoons contrasting them with Cisco. In short, I remember a lot of good stuff, most of which has aged into irrelevance or has been lost.
It’s not that Juniper has lost key products, or failed to evolve them. Their routing/switching technology is as good as any in the industry, and better in fact than most. The problem is that they have always seen the future of networking as being linear exponential growth in the size and number of switches and routers. One ex-Juniper friend described this as the “more and bigger” theme. Last year, in fact (as Light Reading reminds us in the article) they were saying that sure operators were spending less but 5G was going to ride in from a golden sunrise to save everyone. They’re still listening for the hoofbeats, I guess.
For the last six years, operators have been honest with vendors. I know because I’ve been there for many presentations, and they all showed revenue per bit falling, cost per bit falling more slowly, and an inevitable crossover if something wasn’t done. Cost per bit means both capex and opex, and that set of charts (some of which were made public) should have told network equipment vendors that something dire was going to happen if they didn’t step up somehow. They didn’t, it did, and Juniper is feeling the bite.
Juniper has never been a price leader (Huawei is the price leader). Juniper has never been perceived as a feature leader either, because in my surveys of strategic influence exercised by network equipment vendors they’ve consistently lagged the field. There are three primary reasons for this, in my view. First, Juniper’s marketing has been insipid to say the least. There are no funny anti-Cisco cartoons any longer, and in fact that was the heyday of Juniper marketing. It’s been downhill since. Second, every single acquisition Juniper has made has failed to deliver the kind of innovation boost Juniper needs. Third, there is no company so dedicated to drinking its own bathwater as Juniper.
Juniper is bad at marketing in part because they developed a sales-and-engineering-centric culture a decade ago, led by executives in both areas that were relentless in promoting their visions. Their marketing genius left (perhaps as a result of the uphill battle) and the company tilted decisively toward engineering and sales. They did some great things, but they could never explain them to people who lived in the real world, which is what marketing does. They still have that culture today.
When Rami Rahim, the CEO, talked on their earnings call, he talked about “go-to-market” improvements that were specifically in the sales organization, improved enterprise sales that were improved only versus this quarter last year but down sequentially, and an acquisition (Mist Systems, the WiFi management company) without an explanation of how it will somehow relaunch the company’s fortunes overall. Not a word about marketing, and without a strong marketing program any sales organization is hamstrung.
That raises the point about acquisition failures. They’ve made 22 acquisitions, and I’d venture to guess that few people in the industry could name more than one or two of them. Of that list, there is only one that I think was a potential strategic game-changer, and that’s HTBASE. Juniper, with that acquisition, became the only network vendor with a strong multi-and-hybrid-cloud fabric strategy. Do they even know that? I’ve not seen a single piece of strong collateral on the acquisition, and I see no mention of HTBASE or what it could bring to Juniper in their earnings call.
At one time, after one particular acquisition that I’m sure nobody remembers, the CEO of the acquired company was for a time the largest shareholder in Juniper. That was obviously a big commitment, and yet if there was a result, I sure never saw it. Like most of the other acquisitions, Juniper seemed to have done nothing more than thrown a dart at a board with target company names on it. There has to be a strategy, a world-view of the market, that drives not only M&A but also engineering and marketing. I don’t see it with Juniper.
And that brings me to the last point. All companies are inherently sub-cultures. You go to work every day with the same people, you often socialize with them too. Over time, you develop your own view of the world shaped (as it always is) by those around you—who all happen to have the Juniper company view. More and bigger.
So what does Juniper do to get out of this? The long-term answer is to get that long-term strategic vision and use it to address the three specific issues I’ve named here. The problem with that is that long-term doesn’t fit in today’s quarter-at-a-time Wall Street world, so we need a more practical solution.
Which, in my view, has to revolve around HTBASE. Nokia has Nuage, a virtual-network approach that’s extended to SD-WAN, but they’ve never marketed it well and probably won’t do any better in the near term. They also just turned in a bad quarter. Coincidence? Anyway, HTBASE is strategically more tied to the cloud and thus more useful than Nuage, and Juniper still has a chance to do something smart with it before it dies the sad death of the 20-odd other acquisitions.
The difference between HTBASE and a “virtual network” is that HTBASE is really about component/service portability in a cloud that can extend over data centers and public clouds alike. It could offer true resource independence, resiliency, and scalability. It really could turn a global network or global cloud into one enormous virtual host. Juniper, by creating a preferred-but-not-exclusive link between its data center and WAN technology and HTBASE, could take an enormous step toward building what a cloud network would have to be.
This potential, or at least the potential to define a cloud network, isn’t lost on other players, though. Google’s Istio is also a contending technology, and because the CNCF is a better marketing machine than Juniper is, the fact that at the moment HTBASE is in the lead as far as features/capabilities go could mean less quickly, and nothing at all eventually. Not to mention that there are a lot of people ardently supporting enhancements to the Kubernetes ecosystem that Istio is a part of. Not to mention that Juniper will have to support Istio too.
Network companies have a really hard time with virtualization in any form. Nokia proved that with Nuage, and Juniper isn’t showing us a different level of vision so far with HTBASE. That’s too bad because it’s already clear that in enterprise networking and cloud computing, virtual networks are essential because you need “logical connectivity” that’s independent of the current physical linkage between an IP address and a location in the network. You need to float components around as needed, keeping their connectivity intact. You need to load-balance and optimize location based on the location of older instances and linked components. You need a cohesive cloud-centric vision of virtual networking, and HTBASE could offer that, while Juniper could link it all to traditional IP and Ethernet. “Could”, of course, is not the same as “will.”
I have a lot of friends at Juniper, and I’d like to see them turn themselves around, but the key to that is in the phrase I just used. They have to turn themselves around, not hope the market and 5G will turn them, or that service providers will forego profits to buy more routers, or that buying companies is a strategy in itself. They have to shed the Juniper past and discover a new Juniper future, and I don’t know if Rahim or Juniper overall are going to be able to do that.