Analysts: Juniper has work to do

Juniper emphasized its laser-like focus as a core component of its success over the past 10 years – but attendees of its annual Analyst Day say it may have to defocus a bit in order to land more deals and regain market share.

Juniper kicked off its conference this week with press releases extolling its position as the overall No. 2 enterprise and service provider router vendor behind longtime leader Cisco. One release, citing market share data from Synergy Research, boasted that Juniper has achieved an impressive 30% share in high-end enterprise routing since the company’s inception in 1996.

But such back patting didn’t sway skeptical analysts, who grilled company executives on share lost recently to Alcatel in carrier edge routing, Juniper’s lack of systems integration expertise for hot new markets like IP TV, and the absence of Ethernet switching products for aggregation at the carrier edge and expanding its presence in the enterprise market.

Alcatel has displaced Juniper as the No. 2 vendor in IP edge aggregation routing, according to Synergy Research. Analysts pointed to a three-pronged strategy for Alcatel’s recent success: an Ethernet aggregation switch to couple with an IP service router for IP TV deployments; a deep IP TV partnership with Microsoft; and systems integration expertise to tie all the components of an IP TV buildout together.

They suggested Juniper will have to attain – or obtain – similar capabilities in order to compete with Alcatel and the recent marriage of Cisco and Scientific-Atlanta for these multibillion-dollar IP TV deals.

Juniper countered by claiming that the two largest IP TV networks in the world are deployed by service providers PCCW and FastWeb, both of whom are Juniper M-series and E-series router customers. Juniper also says it is designing products for IP networks that support multiple services, not just video, because service providers are still uncertain which services will grow new revenue.

Juniper espouses an IP video architecture that relies more on the dynamic bandwidth allocation capabilities of a router – specifically, Juniper’s E320 router – than on the static assignments of Gigabit Ethernet aggregation switches. Analysts, however, noted that Juniper partner Lucent’s intention to acquire the assets of metro Ethernet router vendor Riverstone Networks underscored the glaring hole in Juniper’s product line.

Juniper dismissed the perception that it needed Ethernet switching and aggregation products in order to better compete in the triple play/IP video opportunities.

“Ethernet is not an architecture,” said Chairman and CEO Scott Kriens. “Ethernet is an interface. Source and destination intelligence (housed in routers) will be increasingly accessed through Ethernet interfaces.”