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Online Video Beneficiaries: Juniper

Posted on Tuesday, Sep 18th 2007

The increasing IP traffic due to Online Video, IPTV, and an increasing reliance on the network in enterprises is driving the growth of the network infrastructure players like Cisco and Juniper. In this post, I will look at Juniper’s standing as an online video beneficiary.

Juniper Networks, Inc. (Nasdaq:JNPR) is a leader in high-performance networking with net revenues of $2.3 billion in 2006. Its business is organized into three operating segments: Infrastructure, Service Layer Technologies (SLT), and Service.

Its Infrastructure products include M-Series for edge networks, T-Series for core IP infrastructures, and E-Series for carrier-class routing, broadband subscriber management, and IP services. It introduced the MX series in early 2007 to address the carrier Ethernet market and the IPTV trend. In Q2 2007, it rolled out the T1600 core router which uses less power and has more capacity. With this product, Juniper is expected to gain back its market share in core routers. It is estimated to have around 30% market share in core routers with Cisco leading with 60%.

Its SLT products provide high performance, cost-effective network security solutions for enterprises. They include the popular Integrated Security Gateway (ISG) products that combine VPN and intrusion detection and prevention (IDP) solutions in a single platform and the Secure Services Gateway (SSG) platforms that provide a mix of high performance security with LAN/WAN connectivity. This line is an evolution of Juniper’s Netscreen acquisition.

On the financial front, Juniper reported net revenues of $664.9 million for Q2 2007, a 17% increase over $567.5 million in Q2 2006. GAAP net income was $86.2 million or $0.15 per share, compared with a GAAP net loss of $1,206.5 million or $2.13 per share for Q2 2006.

Though Juniper is much smaller than Cisco, it is capitalizing quite well with the increasing demand for bandwidth due to the growing demand for IPTV and online video, especially in carrier markets. Its Enterprise strategy is mostly Secure Networking based, which keeps them focused and aligned also with an important trend vector.

The stock is on an upward trend gaining 75% over the year with its stock price hovering around $35. Its market cap is $18.11 billion, making it one of the largest among Cisco’s key competitors.

Juniper is definitely the company to watch amongst Cisco’s challengers, along with Alcatel, which we will cover later in the series.

Juniper Networks, Inc. (JNPR)

This segment is a part in the series : Online Video Beneficiaries

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