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Juniper unveils new operating plan to accelerate growth

Tipped in last earnings call, new Juniper CEO’s directive lacks detail, depth

By , Network World
February 20, 2014 07:46 PM ET

Network World - Juniper Networks, as promised, this week announced a new integrated operating plan (IOP) to refocus the company on high growth segments in the networking industry.

One-Juniper plans will result in "substantial structural reduction."

The plan attempts to streamline R&D and go-to-market programs, drive efficiencies in all areas of company operation, and return capital to shareholders. The IOP is the result of an ongoing review of the company's business and customer needs led by new CEO Shaygan Kheradpir.

“The plan is focused on accelerating growth and increasing shareholder value,” Kheradpir said, adding he sought input from customers, shareholders and employees. “I am very confident with this plan.”

+MORE ON NETWORK WORLD: Juniper should reevaluate switching, security products investor says +

The plan was unveiled as reports surfaced this week that Nokia may be looking to buy Juniper.

Kheradpir tipped his hand to the IOP in Juniper’s Q4, 2013, earnings conference call. Activist shareholders, such as Elliott Management, have been calling for a plan like this and they are supportive.

"Today's announcement is an incredibly positive development for Juniper and its shareholders," said Jesse Cohn, portfolio manager at Elliott Management, in a statement. "Shaygan and his team have developed a thoughtful and highly value-accretive plan to invest for growth, significantly streamline and target the operations, and meaningfully return capital to shareholders. Further, Shaygan and the Board, which will be adding two leading operations-focused executives, have impressed us with a focused commitment to accountability and execution of the plan. Elliott is highly optimistic about the Company's future and looks forward to supporting Juniper in its continued focus on creating shareholder value."

Juniper named industry veterans Gary Daichendt and Kevin DeNuccio to the company board. Daichendt previously served in several senior operating executive positions at Cisco, retiring from the company in December 2000. DeNuccio is the former president and CEO of Redback Networks, which was acquired by Ericsson years ago.

Under the IOP, Juniper will focus on sophisticated service provider, cloud, Web 2.0, content, cable, and enterprise – financial service and government – customers. It will also converge its routing, switching, security, and network management and control products under one integrated portfolio and continually review that portfolio to determine that products fit with the strategy.

Juniper did not detail which products will not make the cut. But it does have some that are targeted at SMBs, wireless LANs from its Trapeze acquisition, and there are rumors that campus and branch solutions – some older EX switches, and branch routing and security platforms -- may not go forward.

The operational and portfolio streamlining will result in an internal structure the company calls One-Juniper. One-Juniper will result in “substantial structural reduction” to the cost base. Kheradpir said Juniper will simplify its organizational structure to “reduce management layers” but provided no numbers or other details.

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