Cisco rival Juniper facing enterprise challenges in Q1

Juniper's enterprise sales remain under pressure in Q1, according to Oppenheimer & Co., which could be an indicator of Cisco's enterprise business in its current fiscal quarter. The investment firm issued a bulletin this week sizing up Juniper's quarter and found, through channel checks, that spending cuts, delays and normal seasonality are impacting enterprise business in the quarter.

Also, Juniper's enterprise operations are still a bit immature, according to Oppenheimer:

Some channels expressed a need for more aggressive marketing and quicker deal approvals, which we view as growing pains. 

Oppenheimer said it interviewed 25 Juniper channel partners across the U.S. and Europe and found that roughly half expect improvement in Q2, assuming budgets unfreeze and deal activity improves, combined with positive seasonal momentum. However, Oppenheimer says the discussions indicated very little in actual pipeline improvement in Q2.

But for Q1, channel partners are finding that Juniper customers are more demanding in terms of cost savings, and competition more intense. Time for Juniper to turn up the full court press:

The vast majority pointed to a need for more aggressive promotional activity and more access to Juniper's sale executives. Slow deal approval and limited financing were areas of frustration, with many recommending portfolio expansion. We view these as typical growing pains. 

Oppenheimer says Juniper's EX LAN switching line is still in the early stages of adoption. Eighty percent of the channel respondents are not selling the switches or seeing only limited adoption, while 4% see "strong" adoption.

Despite this, ~1/3 saw a slight increase in interest for Juniper due to Nortel's struggles, confirming our thesis that Nortel's demise could yield upside in 2H09.

Even though Oppenheimer doesn't see sales of Juniper's Service Layer Technology group -- which includes security, WAN acceleration and other enterprise-focued technologies -- resuming growth until Q3, the firm says the company is well positioned longer term with its EX switches and IBM relationship. IBM resells the EX switches and partners with Juniper in cloud computing.

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