The Microsofting of Juniper Networks

With ex-Microsoft exec Johnson at the helm, Juniper adopts software giant's style of reaching out to third parties to expand market reach

SAN JOSE -- The Microsoft pedigree of senior executives at Juniper Networks has infused a new software centrism within the routing and switching company.

Juniper Networks cooking up new ideas in incubation lab

Juniper's analyst conference here this week was an immersion in software strategy as company executives laid out plans to stimulate innovation and growth through internal and third-party application development on its Junos operating system. The strategy includes an aggressive campaign to recruit external software writers to three Junos development platforms via investment, promises of mutual financial gain and other enticements.

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Juniper is attempting to cultivate a following of software developers writing Junos applications for Juniper's routers, switches and security systems within a network; servers that control functions across the network; and client devices that access the network. In so doing, Juniper is emulating a model that's been successful for Microsoft – and also for Apple, Google and other tech companies – in enhancing the value and broadening the market appeal of its products through added functionality.

"What we aspire to do is create a software ecosystem that would be the equivalent of what Microsoft was in the computer world," said Juniper Founder and CTO Pradeep Sindhu, in an exclusive interview with Network World.

"Harnessing the power of third parties is very important," said Juniper CEO and former Microsoft executive Kevin Johnson. "We haven't seen it happen in networking – yet."

Johnson highlighted the ecosystem models of Microsoft – which has 640,000 software development partners – and the Apple iPhone, with 250,000 applications, as successful software development initiatives. The Juniper strategy was initiated by Johnson upon his arrival from Microsoft in 2008. Until then, Juniper emphasized its expertise in silicon and operating system software.

"This is almost entirely Kevin coming in," Sindhu said. "He recognized that [single operating system] dynamic. And it's easy to see why because of the place he came from."

Analysts note the parallels and believe it's by design.

"Juniper and Microsoft are converging on a common reality: software is what provides functionality," says Tom Nolle, president of consultancy CIMI Corp. "Juniper's hoping the influx of Microsoft people taught them something they didn't have before – people from a software culture who recognize marketing."

But Nolle says the Juniper strategy is not so much an emulation of the Microsoft model as it is a recognition that it – and an indirect sales channel – is necessary for grabbing a bigger piece of the enterprise market. Juniper's roots are deep in the service provider IP router core, but the company is pushing deeper into the enterprise with offerings such as its Virtual Chassis technology and forthcoming Project Stratus offerings. 

"Getting into the enterprise is a fundamental change," Nolle says. "They could never cover it with a direct sales force" the way they could to the top 30 to 50 service providers around the world. "They could not be successful because they could not influence accounts. That required a commitment to the ecosystem."

The results have been positive. In the second quarter of 2008 – just before Johnson came to Juniper – sales to the enterprise accounted for about 24% of revenue. In the second quarter of 2010, the number was up to 36%. And enterprise sales increased 31% in the second quarter of 2010 from second quarter of last year.

The $3.3 billion company's strategy hinges on software developer kits for its Junos operating system as well as its Junos Space software for orchestrating, automating and providing insight into network operations and its Junos Pulse software for network-attached clients, like smartphones and laptops. The Juno SDK has been available for some time, the Junos Space SDK will come out later this year and the Junos Pulse SDK is still in the planning stages, said Mike Harding, vice president and general manager of Junos Space.

By releasing these SDKs, Juniper is also hoping to position Junos and its platforms as more "open" than those from Cisco, which has several operating systems across its various routing, switching and ancillary platforms: IOS, IOS-XR, IOS-XE, NX-OS among them. Juniper, however, has its own experience with several operating system variants.

Juniper also established the Junos Investment Fund (JIF) in February to provide seed capital to start-ups writing applications to the Junos platforms. JIF sets aside $50 million over two years to fund start-ups in Series A, B or C rounds.

"It gets the flywheel going in the ecosystem," said Tom Fountain, Juniper vice president of corporate strategy. 

To date, three companies have been funded under JIF, but the only one Juniper's made public is Altor, a developer of virtual firewall software for data centers.

Sindhu said the ecosystem initiative is "relatively new" to Juniper even though the company had a Junos SDK well before Johnson's arrival.

"What [Johnson] recognized was the real importance of it, of elevating it and putting wood behind the arrow," Sindhu said. "If you look around the networking industry it is not there."

Sindhu said this is because the networking industry is a decade behind the computing industry. There were stark differences in the technology between routers and computers in the mid-1990s, around the time Sindhu founded Juniper. But between 1996 and 2005, people from the computing world migrated to networking due to high growth, spurred largely by the Internet, and the maturation of the computer industry.

Influences from the computer industry started to open up networking platforms to receive additional functionality from software applications, Sindhu said.

"This way of thinking that I have to specialize everything destroys value in the network," he said. "It leaves silos. And this thinking will only go away once something like this takes hold.

"I absolutely see the trend from a hundred different specialized systems to more general purpose systems," Sindhu said.

In addition to the Junos ecosystem, there's a Microsoft influence in Juniper's strategic partnerships. Gerri Elliott came to Juniper from Microsoft a year ago to head up partnerships with IBM, Dell, Nokia Siemens Networks and Ericsson. Elliott, whose official title is executive vice president of strategic alliances, had been responsible for Microsoft's public sector sales and establishing North American vertical industries marketing.

Even with the influences of Johnson, Elliott and others, Sindhu said no one will actually be confusing Juniper with Microsoft anytime soon.

"I don't necessarily see us adopting the [entire] Microsoft model," Sindhu said. "The networking industry is not the computing industry."

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