Analysts: Juniper could be doing better

Juniper emphasized its laser-like focus as a core component of its success over the past 10 years – but attendees of the company’s 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 last 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.

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

“They’re growing revenue but losing business,” said Ron Westfall, an analyst at Current Analysis. Product and proficiency gaps are “lessening its ability to close more deals.”

Some of those deals are going to Alcatel, whose market share in IP edge aggregation routing has shot up from 9.2% in the second quarter of 2005 to 25.6% in the fourth quarter, according to Synergy Research. Alcatel has displaced Juniper as the No. 2 vendor in IP edge aggregation routing, Synergy says.

Analysts pointed to a three-pronged strategy for Alcatel’s 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 unite all the components of an IP TV buildout. 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 multibillion-dollar IP TV deals.

Juniper countered by saying that the two largest IP TV networks in the world are deployed by service providers PCCW and FastWeb, both of which are Juniper M-series and E-series router customers. Those products are therefore “the most production proven” for IP TV applications, said Judy Beningson, vice president of strategy and planning for Juniper’s service provider business.

Juniper espouses an IP video architecture that relies more on the dynamic bandwidth allocation capabilities of a router – Juniper’s E320 router – than on the static assignments of Gigabit Ethernet aggregation switches. But when asked for a status report on the E320’s traction in the market, Perdikou said only that the router is “solid” and “takes a long time” to penetrate the market.

Analysts noted that Juniper partner Lucent’s intention to acquire the assets of metropolitan Ethernet router vendor Riverstone underscored the hole in Juniper’s product line. Lucent resells Juniper routers but partnered with Riverstone last year for carrier voice, video and data over a single telephone line, or triple play, opportunities because Juniper lacked Ethernet switching and its low prices.

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

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