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Juniper Networks Growth Slows as 400G Prospects Ramp Up

Friday Jul 26th 2019 by Sean Michael Kerner

Juniper Networks CEO is optimistic about next generation 400 gigabit connectivity and the positive impact it will have for his company.

Juniper Networks has a lot to look forward to in 2020 as new technology ramps up including 400 gigabit connectivity and WiFi6. That's a key message coming from CEO Rami Rahim as the company reported slower growth during its second quarter fiscal 2019 financial results call on July 25.

For the quarter, revenue was reported at $1.1 billion for an 8 percent year-over-year decline. The company's service provider market segment declined by 15 percent, enterprise declined by 6 percent and Cloud revenues were flat, year-over-year.

"We continue to believe we are holding our footprints in our cloud customers wide area networks and our position to grow with their capacity requirements in the segments," Rahim said. "While cloud wide area spending trends should present growth opportunities for us over the next few years, we are very much focused on leveraging the 400-gig cycle to capture new use cases in the hyperscale market, particularly in the data center interconnect and spine-and-leaf Switching segments."

400G

400G is still an early market, though it is one where Juniper has already begun shipping 400-gig capable products.

"We plan to introduce additional 400-gig capable products through the course of this year and next and we believe we will further strengthen our ability to win new hyperscale use cases," Rahim said.

Currently optical equipment for 400G is not available, with Rahim commenting that he expects 400G optics to make their way into the market in the first half of 2020.

"Keep in mind that we do have an investment that's happening in the silicon photonics space that enables us to become masters of our own destiny in terms of providing the types of 400-gig optics, which we believe will have superior economic value propositions in order to support our 400-gig systems and software roadmap," Rahim said.

Currently Juniper is in the trial phase of the 400-gig cycle right now which is an important part of the process. Rahim expects that the first customers that will consume 400-gig will be the cloud providers, followed up by the service providers.

"We believe 5G, the 400-gig upgrade cycle, SD-WAN, WiFi 6 and enterprise multi-cloud initiatives, each represent large multi-year opportunities, where we should be well-positioned to benefit over the next few years," he said.

Wi-Fi 6

WiFi 6, formerly known as 802.11ax is the next generation of wireless, offering enhanced performance and scalability. Juniper is investing heavily into WiFi6, with its $405 million acquisition of Mist Systems which closed on April 1. Mist provides artificial intelligence capabilities to help optimize Wireless LAN (WLAN) deployments.

"It's still early days, but Wi-Fi 6 is going to be a pretty significant growth driver for us in the campus and branch segment," Rahim said. "The first Mist Systems Wi-Fi 6 products are actually now shipping and we even have a few early deployments with some of our high-end enterprise customers that are starting to leverage that technology."

The movement toward Wi-Fi 6 could also lead to growth for the rest of Juniper's networking portfolio as well. Rahim commented that in order to realize the full potential of Wi-Fi 6, which , which typically adds some level of complexity to a network, there is a need to have the kind of cloud managed AI engine that Mist Systems brings to the table.

"It simplifies not only the deployment, but it also simplifies the ongoing operations of a wired wireless LAN network and many of our customers are absolutely loving it," he said.

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

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