Juniper Touts Strong Growth, CEO Succession

Companies sometimes change CEOs to fix a problem. In the case of networking vendor
Juniper Networks, the new incoming chief executive will take the helm of a company that
is financially healthy and looking to grow even more.

That’s the message from Juniper’s chairman and outgoing CEO Scott Kriens. Kriens is
handing over his post to former Microsoft executive Kevin Johnson, who is set to take the helm
of Juniper in September.

During a conference call to discuss Juniper’s second-quarter financial results on
Thursday, Kriens, who will remain chairman of the board once Johnson takes over as CEO,
outlined Juniper’s financial performance and the role that his replacement is expected to

For the quarter, revenues at the networking vendor hit $879 million, an increase of
6.9 percent from the previous quarter and 32 percent over the same quarter last year.

On the net income side of the books, Juniper reported $120.4 million or 22 cents per
share, an improvement over the $110.4 million or 20 cents per share it reported in the
previous quarter. That sum is also up substantially from the $86.2 million or 16 cents
per share from the second quarter of 2007.

“A simple headline for the first half of the year … six words that would tell you
everything about what I’ve said and I’m about to say: Juniper is strong and getting
stronger,” Kriens said during the call.

Kriens also spent part of the call praising his successor. Johnson will join Juniper
after having served as president of Microsoft’s (NASDAQ: MSFT) Platforms and Services
Division, its largest business unit, which included Windows, Windows Live and the
company’s online media and advertising units.

Johnson had also been instrumental in leading the software giant’s abortive effort to purchase

Now that he’ll be joining Juniper, the hope is that Johnson will be able to take the
company to the next level, with his past successes at Microsoft translating into
continued growth for Juniper.

“He started at Microsoft at a time when it was 6,000 people and just under $2
billion,” Kriens said of Johnson. “He began his career there when Microsoft was smaller
than Juniper is today.”

“So he’s seen both sides and beyond of everything that we’re trying to do here, and
more importantly to me, personally, and to this company, is who he is and how he shows up
and does what he does.”

Kevin Johnson joins Juniper from Microsoft
Kevin Johnson
Source: Microsoft

The strong financial performance that Johnson will inherit stems from a number of key
initiatives underway at Juniper. Among them is a successful business for Juniper’s
high-end multi-terabit T1600 core router, which was
announced last year and began shipping at the beginning of this year.

Kriens said sales of the T1600 core router nearly doubled to 195, up 90 units during
the quarter.

“NTT Communications selected the T1600 core router to scale the capacity of its global
IT network, the world’s largest dedicated Internet backbone network,” he added.

Juniper is also growing by way of its new EX switching business, a new
product area the company entered in 2008.

“A key driver in our ability to compete and win in enterprise network infrastructure
opportunities is the availability of our EX-series Ethernet switches,” Kriens said. “In
the quarter, we recognized over $10 million in Ethernet switching revenue and shipped
EX3200 and EX4200 switches to more than 100 customers around the world.”

The EX switch line represents the first time Juniper has an entry in the Ethernet
switching market, an area dominated by its chief rival, Cisco (NASDAQ: CSCO). Juniper
competes aggressively with Cisco across a number of other networking segments,
including the carrier space

While Juniper has raised the stakes in its competition with Cisco, not all of its
sales are driven by efforts to undermine the market leader.

“There are two types of wins,” Kriens said. “One of them is what I would call
‘tactical,’ where someone’s simply making a fastest box or best point product decision.
And that could be against anybody because that’s generally the criteria that are used for
the selection, so there, it’s a lot more of a potpourri.

Still, Kriens made it clear Juniper has painted a target on Cisco when it comes to the
big networking customers.

“When it’s a strategic decision, when someone is making a decision on a network
design, those tend to be primarily against Cisco, being the only other company that
approaches it with their own attempts at answers to those questions,” Kriens said.

Article courtesy of

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