Juniper Networks mulls its future

JuniperBerriesJuniper Networks is pondering its future after talks to try to sell its assets last year fell through.

According to Reuters , a cunning plan is being hatched up which could see it buying more companies to bolster the security and enterprise business, with a longer-term view of a sale or spin-off.

Last year, Juniper contacted about half a dozen competitors to see if any of them wanted its assets that handle networking for enterprise clients.
There was some talk that storage provider EMC was going to buy the outfit, however, EMC CEO Joe Tucci ruled that out.

One of the assets pitched was NetScreen, a maker of firewall technology that Juniper bought in 2004 for $4 billion.  No one was interested because Juniper’s enterprise-oriented assets were a little elderly.

When asked at Mobile World Congress in Barcelona if he was going to sell NetScreen or other parts of the business, chief executive Kevin Johnson said he was a buyer not a seller.

He added that the enterprise business, which was only focused on security five years ago, had since grown into switching and routing.

But Juniper made a mistake in that it focused on its core business of wiring service providers such as mobile carriers.  This resulted in it spreading itself too thin.  Then it developed products which came out late and were buggy.

Reuters said the company had problems in that some of its investors moaning that it did not want Juniper buying more security products.
It said that Juniper was undertaking a “soul-searching” to claw back market share as a pure play vendor for service providers.

So far it has not come up with anything and it is tricky to do much when your share price is lagging.

It is probably kicking itself for not hearing the voice of one of its top NetScreen executives, Nir Zuk.  Zuk had tried to get the outfit to build a new-generation firewall, but he was ignored.  He left to co-found security startup Palo Alto Networks, which has since taken market share from larger rivals in the $17 billion network security market.

Something has to be done fast.  In the fourth quarter of 2012, Juniper’s enterprise revenues were down 10 percent from last year.