Juniper hopes to calm Wall Street and entice new customers with 60% of sale on branch switches.
Juniper Networks today announced a program to discount its EX Series branch offices switches by about 60 percent for new customers trading in old gear from “legacy” suppliers. The offer isn’t open to folks who already own Juniper switches, though it is to Juniper customers of other products, like security, that haven’t yet tried its switches.
Although the EX Series is aimed at the branch, it doesn’t mean you can trade in any branch router you’ve got. A Vyatta box wouldn’t qualify. Juniper defines “legacy” as any company in the market prior to Juniper’s entry, says a company spokesperson. This means Cisco, HP, 3Com, Foundry (Brocade) and Nortel.
For users who would like to upgrade from old gear to new Cisco gear, but can’t do so immediately because of Cisco’s ongoing, chronic supply chain issues, Juniper is prepared to step in and make the deal, the spokesperson says. Juniper resellers have been trained on a “cheat sheet” that tells them the equivalent Juniper box for each competitor’s offerings.
The new promotion comes a day after Juniper suffered from a Wall Street sell off after it gave investors a heads up on its next quarter. Juniper execs told investors it would have a solid quarter and its projected numbers will meet Wall Street’s expectations. But it said it need to do a bit of accounting maneuvering.
“The company said it booked $25 million more in sales because of new accounting rules. So while preliminary revenue was $912.6 million, it would have come in below Wall Street expectations of $906.1 million without the accounting change, according to a Thomson Reuters analyst poll. “We are concerned that this development may indicate that underlying business may have been weaker than expected during the quarter,” Lazard Capital Markets analyst Ryan Hutchinson told investors in a note.”
Other analysts are even more harsh. In a research note, Ashok Kumar, Managing Director & Senior Technology Analyst at Rodman & Renshaw’s Equity Research, says, “The management elected to implement an accounting change on the fly whereby it would recognize revenues in proportion to services rendered versus protocol of recognizing on completion. Excluding the benefit of $25 million from a single carrier, revenues would have come at $888 million (versus $913 million reported) or at the low end of guidance range of $880-$910 million. Service provider, two-thirds of mix, was seasonally weak and is expected to rebound in the current quarter. Enterprise, one-third of mix, was flat sequentially.”
Kumar also says, “Growth in the service provider segment is tracking well below target levels of mid teens. It is unclear if the company has the requisite product portfolio to take advantage of the carrier capex shift to wireless infrastructure.”
Juniper’s spokesperson says that the new promotion recognizes that there is an awful lot of aging enterprise gear in the field. The company obviously hopes that it can grow its enterprise business to help offset some of the softness it is experiencing elsewhere.
Some final thoughts, I love a 60-percent-off sale as much as the next person, but Cisco Subnet blogger and reseller Larry Chaffin is always warning end users not to fall for the whole “discounted prices” spiel. He says it’s a game to make customers think they’ve got a good deal. He advises customers to take a bigger picture view and look at the actual price (no matter how much it has been discounted from the list price). If a business problem is solved that results in a good ROI, t buy the product. If it doesn’t, the discount doesn’t matter.
But it’s still nice to see a major Ethernet vendor trying hard to win your business.
The “Switch to Juniper” promotion ends September 30, 2010.
Posted by Cisco Subnet Editor Julie Bort
