Cover Story

Juniper rising

Juniper’s given Cisco a run for its money in the core routing segment. Prashant L Rao analyses the company’s attempt to do the same in the enterprise market, which is a completely different kettle of fish.

When it comes to core routing, Juniper Networks is on top of the world right now. The company just bagged 41.46 percent of the Indian high-end router market in Q1 05. That’s a remarkable achievement when you consider that it’s up against Cisco, a company that routinely dominates most markets that it plays in. Even more so when you reflect upon the fact that Juniper had not managed to crack the ten percent barrier in the preceding four quarters. So how did the company come in from the cold?

Basically, deployments at large service provider (SP) networks continue to be a significant part of Juniper’s business. So it is not unusual for a small number of high-value deployments to create ‘lumpiness’ in its quarterly revenues. “In Q1 05 in India we saw the revenue outcomes of a number of large contracts,” says Java Girdhar, Juniper Networks’ Country Manager for India and SAARC. He hastens to add that contracts of this magnitude are not concluded every quarter, but that these large wins are supported by steady revenue growth from run-rate business as the company’s Indian channel network grows and its enterprise networking portfolio develops.

“We are also seeing growing demand for the J-series, and for our security, application front end, WAN optimisation and SBC solutions as our channel network in India gains traction and our advanced enterprise networking portfolio grows aided by increasing awareness,” comments Girdhar.

Therein hangs a tale.

From telcos to enterprises

Traditionally, Juniper’s been known more for its core routing prowess, a market segment where it has set benchmarks time and again. Juniper’s story is, in many ways, the exact opposite of Cisco’s. The latter made its mark by dominating enterprise networking only to move into the telecommunications space. Juniper, on the other hand, made its mark in the telecom space and is now, with its J-Series and NetScreen acquisition, moving into the enterprise, a larger market.

“The enterprise segment of the routers market that Juniper is addressing now is a significantly larger market than core routers,” comments Nareshchandra Singh, Manager, Communications Research, IDC (India).

Analysts believe that Juniper’s prospects in the enterprise networking market are decent. “Unlike others who are trying to compete with Cisco in this space, Juniper is a proven vendor in the routing space,” says Singh.

Cisco begs to differ.

“To date they have not had much success in the enterprise space, especially in India. We have a lead as we have been selling to the enterprise for 10 to 15 years,” insists Ranajoy Punja, Vice-president, Marketing, Cisco India & SAARC.

That said, Juniper’s got ahead in a few niches. In Q4 2004 it was #1 in IDP (Intrusion Detection and Prevention) with 37.5 percent, #2 in Hardware Firewall/VPN with 11.6 percent and #3 in SSL VPN with 13.3 percent. Not to mention that it virtually owned the Broadband Aggregation market of $0.32 million.

“We have 19 customers here in the SP and large enterprise category, so early adopters have relied on us now for quite some time,” says Girdhar.

In India, Juniper Networks’ M-series platform, which is deployed in enterprise and SP networks, sells in the biggest volumes. In most cases, the M-series gets counted in IDC’s ‘high end’ core and edge router categories. The T-series core routing platforms and the E-series edge routing platforms have also enjoyed success here.

Juniper vs. Cisco

As Cisco moves up and Juniper branches downwards into the enterprise segment, the competition between these two players is bound to intensify. Core routing’s obviously the prime battleground and Juniper’s doing pretty well there. However, the entry-level J-Series hasn’t been quite as successful. Beyond that, Juniper lacks a switch line which is a disadvantage when it takes on Cisco in the enterprise market.

“That’s Cisco’s advantage over Juniper or any other vendor. We are the only networking vendor that sells end-to-end solutions,” declares Punja.

Singh however states, “I don’t see much of a difference from this. Making good partners for addressing the enterprise space will count more.”

Juniper’s take is that enterprises, at least the larger ones, are starting to resemble SPs in their demands. “Enterprise networks increasingly resemble SPs in terms of their demands for performance, security and rich services. As enterprises demand more performance, security and reliability from their networks, they are increasingly looking at technologies such as IP/MPLS that were originally developed for SP networks,” says Girdhar.

MPLS is something that both rivals agree is critical.

“MPLS allows SPs to build IP-based next generation hardware and to leverage their network in a shared, secure manner to offer multiple services to customers—data, voice and video. Tata, Reliance, Bharti, BSNL and Sify are all Cisco customers. In the SP segment we have won all the big deals,” says Punja.

There are two kinds of buying patterns when it comes to SPs. There’s the SP as an end customer making purchases for its own internal IT and network infrastructure. Then there’s the build-out of infrastructure to offer services to other customers. Internal purchases are in many ways similar to the buying pattern of an enterprise. In this regard an SP is also an enterprise. The majority of sales fall in the second category where the SP buys to build infrastructure. Here the buying pattern and solutions are very different. The scalability is much higher, the solutions are multi-user, and technologies such as MPLS and billing become critical as do management and uptime.

“In the enterprise you don’t need that level of scalability. The buying cycle and requirements are very different. Enterprises buy more of lower-end routers and switches and not gigabit switch routers or carrier routing systems,” comments Punja.

Juniper’s traditionally sold its products on robustness and scalability. It remains to be seen if the company can focus on other attributes such as pricing and integration to take the enterprise market by storm.

prashant@expresscomputeronline.com