Juniper Networks Inc. warned us that it'd have a disappointing fourth quarter, and it didn't disappoint us: pro forma earnings down 50 percent from the third quarter, and net losses for the quarter and the year.
But don't expect Juniper to jerk its knees and make a sudden, dramatic shift in strategy or focus. In fact, expect more of the same from Juniper: a laser-like, 100 percent focus on service providers.
Juniper dismissed suggestions that it should seek potentially greener pastures in the enterprise market in light of the prolonged slump in the service provider realm.
"Service providers are saying, 'I don't want my vendors selling to my customers; I want them selling to me,' " Juniper Chief Executive Officer Scott Kriens told sell-side analysts in a fourth-quarter conference call. "We've heard them loud and clear. We will not compete with our customers."
To empower the enterprise with the intelligence to operate their networks - read, sell them routers - would be to do so at the expense of the service provider, he said. It would commoditize the service provider's business, Kriens asserted.
Juniper also considers its dedication to the service provider customer as a key competitive differentiator. Cisco competes with its service provider customers by selling switches and routers to enterprises, Kriens suggests.
Juniper expects the first quarter of 2002 to be flat with the fourth quarter. Nonetheless, there remains healthy demand for higher-performance, scalable routers, he says.
The company is expected to pop its new high-end router for the core this year. "Gibson," as some competitors refer to it, will sport a 320G-bit/sec fabric and scale into the terabit range via a stand-alone fabric to interconnect multiple chassis, sources say.
Juniper won't comment, but Gibson was initially expected to emerge last month. Some were even looking for it back in June 2001 at SuperComm.
It's now expected in the third quarter of this year, according to investment firm UBS Warburg.
"Relative to the much conjectured M320/M640 new core product that we expect to have a scaleable architecture and slots to support 40G bit/sec interfaces, we now believe this product will not ship commercially until the third quarter 2002," Warburg stated in a report on Juniper's fourth-quarter results. "We believe the slowdown in the core market has led Juniper to reconsider some design aspects of the product which will lead to a later launch date in 2002."
A Juniper competitor had a different opinion on the delay. "Avici believes the delay is more than likely due to the product not being ready," said Esmeralda Swartz, director of strategic marketing for Avici Systems.
Based on published reports and Avici's conversations with "industry sources," Swartz is expecting Juniper to unveil an eight-slot chassis called the T640. "T640" would suggest a 640G bit/sec switch fabric or I/O capability, but Swartz believes it will more likely be a 320G bit/sec box and Juniper will be double-counting packets.
She's doubtful that Juniper will unveil a 40G bit/sec per slot-capable box by the third quarter. That, and perhaps some other key scalability capabilities - such as terabit performance - will still be roadmap directions at that time.
Juniper's not releasing Gibson because no service provider customer will stand behind its current design, Swartz believes.
Perhaps it's better suited for the enterprise