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Juniper CEO Doubles Down on New Product Transitions for 2018

Friday Feb 2nd 2018 by Sean Michael Kerner

Juniper reports fourth quarter and full-year 2017 financial results as shift from different networking product continues.

Juniper Networks reported its fourth quarter and full year 2017 financial results on Jan. 30. The numbers showed some weakness as the company goes through a product transition to deal with growing cloud adoption.

For the quarter, Juniper reported revenue of $1.3 billion for an 11 percent year-over-year decrease. Full year revenue was reported at $5 billion, for a 1 percent gain over fiscal 2016.

"In routing, our business declined sequentially and year-over-year," Juniper CEO Rami Rahim said on his company's earnings call.

Rahim noted that the weakness was seen across Juniper product lines, due in part to continued deployment delays at Juniper's largest cloud customers. That said, he emphasized that new PTX footprint opportunities within the cloud, as well as continued MX demand in telecom and cable verticals, where service creation remains mission critical, contributing to Juniper's confidence in the longer-term trajectory of its routing portfolio.

Juniper's MX router platform has been the cornerstone of the company's business for over a decade, while the PTX is a newer platform that provides optical integration capabilities.

"The MX is probably one of, if not the most, successful routing platforms that’s ever [been] seen in the market across cloud, enterprise and telecom operators," Rahim said. "It’s just in a different phase of its lifecycle than the PTX. The PTX is a newer product."

Rahim added that in his view many cloud customers see the benefits of having what Juniper has described as a super-core or a lean-core architecture that enables its products to deal with the incredible growth of traffic in networks at a very cost-optimized form factor and price point.

"For that reason, we have seen a transition and will continue to see a transition with cloud providers from MX ports to PTX ports," Rahim said.

Rahim also noted that there is a meaningful price difference between the PTX and the MX, though the big picture is still very positive.

"Although overall revenue in the cloud providers is going to be under pressure as we go through the transition, we are going to be selling substantially more ports, albeit PTX ports, in some cases QFX ports, than we did with the MX product historically," Rahim said.

Switching

Juniper's switching business is also under pressure, with revenue declining in fourth quarter on a year-over-year basis. Switching is also undergoing a product transition for Juniper with movement toward the newer QFX switching products.

Juniper's campus switching product is the EX product line, while the QFX is positioned for use in data centers.

"So data center dominates the use case that we are pursuing and where the business momentum is," Rahim said. "We’re very pleased with our all up switching business growth last year, and in particular the QFX, which grew 25 percent year-over-year. "

Rahim also noted that while competition in the networking industry is tough, it has always been that way.

"Since joining Juniper now over 20 years ago, I can tell you that the one constant element to that period of time has been it's a very competitive landscape across all of our vertical market segments, and we're comfortable operating in a very competitive landscape," Rahim said.

Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.

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