Juniper CEO Sees Growth from Contrail SDN

Juniper reports 2Q16 revenue of $1.2B

By Sean Michael Kerner | Posted Jul 28, 2016
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Juniper reported its second quarter fiscal 2016 revenue this week, showing strength in some areas and weakness in others.

For the quarter, revenue was reported at $1.2 billion for flat year-over-year growth. Net income was reported at $140.0 million, an 11 percent decline from the second quarter of 2015. Looking forward, Juniper provided third quarter guidance for revenue to come in at approximately $1.25 billion.

Among the areas where Juniper is optimistic is with its Contrail Software Defined Networking (SDN) technology.

"A critical technology element of our cloud-enabled brand solution is Contrail, a powerful tool for network virtualization and automation that is enabling our customers' IT and business evolution to the cloud," Juniper CEO Rami Rahim said during his company's earnings call. "In both the Enterprise and Service Provider sectors, we already have multiple multi-million dollar Contrail deployments."

Rahim commented that Juniper sees many unique opportunities and growth drivers for Contrail, including the Internet of Things (IoT). Contrail can and is being used to help enable virtualized and secure connectivity to connected devices.

"We have also been in production for over a year now with a large industrial conglomerate whose industrial Internet allows it and its partners to perform data mining and data collection from various machines like wind turbines, jet engines, elevators and MRI scanners," Rahim said.

Rahim is also very optimistic about the Juniper switching business, where the company reported double-digit growth both year-over-year and quarter-over-quarter. The data center transition from 10 GbE to higher speeds, including 25 GbE, 40 GbE and 100 GbE, is having a positive impact for Juniper.

"At the end of the day, these data centers are essentially becoming high performance networking problems that are Layer 3 in nature," Rahim said. "That's exactly the kind of really high performance problems that I think Juniper loves to solve."

One area that isn't performing as well as Rahim would like is security. In response to an analyst question about the impact of the recently patched flaws in older ScreenOS products from Juniper, Rahim responded that the vulnerability is largely behind Juniper at this point.

"We did a very thorough internal review to make sure that the vulnerability was very specific to our old legacy ScreenOS Security products," Rahim said. "In fact, we invited a third-party company to come in to help us with this assessment, that there is no vulnerability on the Junos side."

Rahim added that Juniper was very open with customers about the ScreenOS vulnerability and noted that while he's not saying that it has had no effect on Juniper's business, he's confident that Juniper's security teams did a good job of minimizing any effect.

"Right now, I think the main issue with security is, there is a critical mass of new products, new features, new technologies we need to get into the market to be able to go after the largest market opportunities that exist," Rahim said.

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.

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