Juniper Networks has some work to do selling network gear to businesses if it wants to meet the profit expectations of Wall Street, analysts say.

While the company is doing well overall, the kind of growth investors seek from Juniper will rely on selling more equipment to corporate networks, according to recent reports from two financial firms. That is not an easy task, given the competition, they say.

"Juniper's overall presence in enterprise networks is minuscule compared with Cisco's, where Cisco not only has overwhelming market share but also owns much of the networking ecosystem with a broader portfolio of networking products," reads a report by Lazard Capital Markets.

Juniper boasts enterprise routers, network security, WAN-optimization appliances and its own NAC architecture, but it is the vendor's EX enterprise switches announced in January that hold the key, according to a UBS Warburg report.

"The success selling to business customers rides in large part on how popular its EX enterprise switches become," the UBS Warburg report reads. "While initially key investments will be needed to trigger scale adoption of EX switches, longer term, a well-executed switch strategy would help Juniper achieve sustainable 20 per cent-plus top-line growth and expanding operating margins," it adds.

That will take discipline on the part of Juniper, whose enterprise business is "barely profitable." according to the Lazard report. As that report headlines: "Enterprise initiative holds promise, execution is key."

"We believe that Juniper has the potential to be a meaningful alternative to Cisco and could increase the company's footprint within the enterprise significantly," the Lazard report reads.

Juniper can make inroads, but the question is whether it can undermine established competitors significantly, most notably Cisco, which owns more than two-thirds of the enterprise switching market. "However, we doubt Cisco will allow Juniper to roam free within its bread-and-butter market without a fight," the Lazard report continues.

Juniper should not be taken lightly, given its success stripping away a third of Cisco's carrier-routing business after it came on the scene in 1997. While that success has slipped, it seems to be firming up again. "After losing modest market-share in both the core- and edge-routing markets over the last couple of years, Juniper's market share has shown signs of stabilizing after renewed investment and recent product introductions," Lazard reports.

Both Lazard and UBS Warburg credit Juniper for its solid sales to service providers, and expect that revenue to remain solid over the next year or so. That alone cannot generate the revenue investors want to see to push stock prices up from the recent price per share of about US$28, however. "We continue to believe that Juniper's carrier-router cycle remains solid for '08, but for the stock to trade above $30, we believe there needs to be a higher conviction on the enterprise LAN-switch business being a real success," the UBS Warburg report reads..

Lazard notes that 75 per cent of Juniper's revenue come from its carrier business and that Juniper can expect continued success in that sector. "Juniper should benefit from the buildout of next-generation networks driven by increased broadband demand," the financial firm reports.