Amid the current economic doldrums, Juniper just posted third quarter revenue (up 29 percent to US$947 million) and earnings (US$148.5 million, up 75 percent). Barely seven weeks into the job, new CEO Kevin Johnson, a 16-year Microsoft veteran, spoke with Jim Duffy about what's driving the company's momentum.
At least in this past quarter Juniper wasn't impacted by any perceived or projected spending slowdown among carriers or enterprise IT. In enterprise IT, are you actually seeing any spending slowdown in this economic climate?
The demand for the products that we're offering in the market remains robust. So this concept of the high-performance network, whether it's for service providers or enterprise customers, is something that's driving us to continue to be optimistic about our opportunities looking ahead.
The real driver for service providers is customer demand for broadband connectivity, digitized content over the Internet... that just drives more and more demand for product. If you look at capital spending, the segment of the market we focus on represents roughly 3.5 percent of total capital spend. So if service providers tighten up capital spend our view is it's probably not in this particular segment of the market that is growing and is really a key driver for their business.
We're growing in the enterprise. You look at the fact that we just in this last year got into the switch business and certainly in our Service Layer Technologies group have a wider range of products for the enterprise. But right now we're at a point where we've just released a set of products that have unique value to customers in the enterprise so this is all growth opportunity for us. It's a chance to go into the enterprise and take share. Even if spending is down, it's still upside for us.
What are your impressions of Juniper after seven weeks?
Certainly the technology strategy and the focus on JUNOS to drive feature velocity and quality in high-performance networking is a very good one. When I look at our value proposition, I've met with a number of our large customers and we continue to develop deeper and deeper relationships with those existing customers.
On the enterprise side, we're making progress but we still have a lot of work to do in our sales and marketing efforts. We've just brought in a new leader of our field operations, John Morris, who's leading that effort. We've got many opportunities to tell our story and reach many more customers in the enterprise.