Juniper Networks is changing the way it conducts operations internally in order to boost profitability, market share, streamline processes and speed decision making.
The company is "executing transformative change," COO Stephen Elop told financial analysts near Juniper's Sunnyvale headquarters last week, with a strategy he referred to as the "4 Ps." The Ps stand for Planning, Productivity, Processes and People.
The 4P plan is intended to enable Juniper to improve operational execution to overcome challenges it faces in the marketplace. Those challenges include improving operating margins; gaining market share in certain key areas; scaling company systems and processes; aligning resources towards a clear product and go-to-market strategy, and making people accountable for such alignment; and reducing decision making time.
"We're recognizing the solid market opportunity but we have to take execution up several notches," Elop said while acknowledging Juniper's growth and market success in its first 10 years of existence. "We have some work to do."
Many of the points Elop made to analysts mirrored those in an interview with Network World in June. Under the Planning initiative, for example, he reiterated Juniper's intention to tune product and market alignment and accountability in order to clearly articulate the company's strategy to offer "best of breed products in well-defined markets."
The Productivity piece of the 4P plan focuses on making the most of the costs associated with scale. Under Processes, Juniper is looking to transform its core processes -- or how it functions as an organization -- by implementing ERP and sales force automation tools.
""We need to scale better than we have in the past," Elop said in reference to the need for these tools.
The People aspect of the plan is an effort to assign "clear" accountability for products and strategies, prepare the workforce for growth, and enhance employee and leadership development.
Elop prefaced the 4P plan introduction by saying that Juniper -- with its roots in core routing, undisputed No. 2 position in that market and strategy to target "high-performance networking" -- has a strong foundation on which to build a clear differentiator in its JUNOS operating system and a US$20 billion market opportunity ahead of it. He acknowledged though that "we have to play exceptionally well.We have to execute and win some things we haven't won before," he said.
One area where some wins would be welcome is in the enterprise. Juniper's invested US$5 billion over the past three years in entering the enterprise market through acquisition, but aside from obtaining a leadership position in firewalls and VPNs via its purchase of NetScreen, has little to show for its stake.
Profitability has eluded Juniper's Service Layer Technology (SLT) group, which comprises NetScreen security, and WAN optimization and application acceleration gear, over that three-year period. But analysts expect gradual operating margin improvement and sales growth in the mid-teens over the next several quarters.
Elop also feels Juniper's product line integration and "commonality" through the company's JUNOS operating system will enable it to win business among high-end enterprises in the financial services and public sector verticals. JUNOS will inherent more capabilities from enterprise platforms such as Juniper's J-series routers and SSG security appliances over time, Elop said.
"We'll make sure that capability is offered in a common environment and encourage people to move there over time," he told the analysts.
While enterprise presents lower growth than Juniper's traditional service provider business, Elop says the high-performance networking needs of larger enterprises create opportunity for the company. But he reminded analysts that Juniper needs to execute.
"The service provider sales force is right where they should be," he said. "Enterprise is more challenged."