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Network World - Juniper's switching and security products are underperforming in the market, says an investor recommending the company review strategic options for those offerings.
Elliott Management, which owns 6.2% of Juniper, says the company has lacked execution and lost momentum after entering the switching and security markets through either organic development or acquisition. Elliott this week recommended a three-prong strategy to Juniper management to unlock shareholder value, including a product portfolio review to reduce its exposure or even exit the switching and security markets.
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In a 13D filing and presentation submitted to Juniper management, Elliott asserts that Juniper’s forays into enterprise switching and security have been “failures” and that the company has mismanaged its participation in those markets since entering them five and 10 years ago, respectively.
“A strategic review of the Security business and an evaluation of the spending and strategy around the Switching business are both appropriate and timely given the failures in these two areas,” the Elliott presentation states.
In switching, Elliott notes that Juniper “overpromised and underdelivered” on development and sales of the QFabric data center line, after spending over $100 million in two years on it. Elliott notes limited uptake of the full QFabric system and architecture – node/interconnect/director – the perception of it as proprietary and its immaturity.
Elliott also notes that competitors like Cisco, Brocade, Arista and others have introduced competing fabric switches in the time the industry was awaiting QFabric.