netrashetty
Netra Shetty
Juniper Networks is an information technology and computer networking products multinational company, founded in 1996. It is head quartered in Sunnyvale, California, USA. The company designs and sells high-performance Internet Protocol network products and services. Juniper's main products include T-series, M-series, E-series, MX-series, and J-series families of routers, EX-series Ethernet switches and SRX-series security products. JUNOS , Juniper's network operating system runs on most Juniper products. In 2009, Juniper debuted on Fortune Magazine's 100 Best Companies to Work for.[1] Juniper ranked 4 in Fortune Magazine's World's Most Admired Companies list in Networking Communications category in 2009.[2] Juniper received the Association of Support Professionals The Year′s Ten Best Web Support Sites award every year from 2006 to 2010
Juniper Networks deals in infrastructure equipment and security services for the telecommunications industry and generated revenues of $3.32 billion in 2009.[1] This contrasts with its 2008 total revenue of $3.57 billion. This decline in revenues mostly came from Juniper's routing products and service provider customers who purchased fewer products in 2009 as a result of the weakened global economy. As a result of the lower revenues, Juniper's net income declined from $512 million in 2008 to $117 million in 2009.[2]
Business Segments
Juniper Networks breaks its business down into two reportable segments: i) Infrastructure, and ii) Service Layer Technology (SLT).
Infrastructure (73% of Juniper's 2009 revenue[3])
Telecom infrastructure consists of the core wiring and routing that gives a network the ability to transport information (data, voice, video) from one place to another. Juniper is heavily involved in routing solutions.
Core Routers: A local area network (LAN) consists of a relatively small number of computers that are connected in a way to facilitate the movement of data between them. A core router is the type of router that takes data sent from one computer and routes it to another within the network. Core routers are also used to connect the more powerful computers that make up the "backbone" of a larger, multi-LAN network. Juniper's core routers are their T-series and M-series.
Edge Routers: Most service carriers have a massive network consisting of smaller networks networked together; for instance, cities have small cellular networks in the grander national or world network. When information is sent out of a small network, an edge router is used to reroute that data, voice, or video to the backbone network, and then from the backbone to whatever network the data is headed for. Juniper's edge routers are their E-series and M-series.
Enterprise: Business networks tend to need more features (e.g., network security) than normal edge routers can offer. Service routers have additional control and security features to protect data being sent from network to network and computer to computer. Juniper produces the J-Series line of service routers.
Ethernet: Ethernet is the most prolific type of local area network. There are four main kinds of ethernet cabling, each allowing for faster and faster speeds, but a computer and/or router needs to have a special type of input to accept ethernet cables. Until very recently, Juniper's routers did not support ethernet, but the new MX-series of routers, as well as new models of their core, edge, and enterprise routers, do.
Service Layer Technology (27%[3])
Service layer technologies provide better control and security to networks.
SSL VPN: A virtual private network (VPN) is a private database that can be accessed through the public Internet; the data on the VPN is kept private via a number of security features. An SSL VPN can be accessed over any Internet browser. Juniper produces secure access hardware to protect the data on an SSL VPN from unwanted entry.
Security: Security applicances like firewalls and intrusion detectors are meant to keep unwanted programs and people out of secure files. Juniper supplies a number of security hardwares, specially designed for home and office use.
Trends and Forces
Juniper's products are used by high-growth companies
Juniper's product portfolio appears to be extremely biased towards high-growth sectors of telecommunications equipment. Routers have become a completely necessary part of modern telecommunication networks, so as long as networks keep growing, the demand for routers will keep growing. Also, as companies get larger and larger, they will need the ability to transfer more and more data, further benefiting companies like Juniper.
The YouTube effect
The growth of online video -- from YouTube, BitTorrent, and increasingly Television Studios' own forrays onto the Internet -- has already led to massive increases in the amount of data traveling across the Internet. A single, 30-minute video clip requires many thousands of times the bandwidth that a single email message requires. As such, online video has already required that carriers spend massive amounts to upgrade their networks, and this spending has benefited Juniper, the second-largest manufacturer of routers to direct traffic on the Internet after competitor Cisco Systems (CSCO).
Balance Sheet - Assets
Cash and Equivalents 1,811,887 1,460,914 1,660,086 1,723,949
Marketable Securities 474,514 638,523 563,315 592,679
Accounts Receivable 596,622 473,953 391,545 402,934
Receivables 596,622 473,953 391,545 402,934
Prepaid Expenses 169,812 111,466 59,568 67,858
Current Deferred Income Taxes 161,535 181,955 224,792 209,560
Total Current Assets 3,214,370 2,866,811 2,899,306 2,996,980
Other Fixed Assets 493,881 484,802 466,172 457,957
Total Fixed Assets 493,881 484,802 466,172 457,957
Gross Fixed Assets (Plant, Prop. & Equip.) 493,881 484,802 466,172 457,957
Net Fixed Assets (Net PP&E) 493,881 484,802 466,172 457,957
Intangibles 121,803 47,629 23,360 12,672
Cost in Excess 3,927,807 3,759,631 3,711,726 3,658,602
Non-Current Deferred Income Taxes * * 8,205 9,784
Other Non-Current Assets 709,990 732,024 635,558 542,740
Total Non-Current Assets 5,253,481 5,024,086 4,845,021 4,681,755
Total Assets 8,467,851 7,890,897 7,744,327 7,678,735
Balance Sheet - Liabilities, Stockholders Equity
Accounts Payable 292,270 251,431 243,228 230,330
Accrued Liabilities 494,442 365,137 379,636 343,951
Deferred Revenues 660,264 594,437 544,578 619,968
Other Current Liabilities 25,000 29,762 53,577 60,903
Total Current Liabilities 1,471,976 1,240,767 1,221,019 1,255,152
Long Term Debt 103,823 98,198 94,950 92,576
Other Non-Current Liabilities 283,252 235,033 256,553 209,684
Minority Interest * 750 956 2,124
Total Non-Current Liabilities 387,075 333,981 352,459 304,384
Total Liabilities 1,859,051 1,574,748 1,573,478 1,559,536
Common Stock Equity 6,608,800 6,316,149 6,170,849 6,119,199
Common Par * 5 5 5
Additional Paid In Capital * 9,449,553 9,363,244 9,267,584
Retained Earnings * (3,137,836) (3,181,733) (3,143,924)
Other Equity Adjustments 6,608,800 4,427 (10,667) (4,466)
Total Capitalization 6,712,623 6,414,347 6,265,799 6,211,775
Total Equity 6,608,800 6,316,149 6,170,849 6,119,199
Total Liabilities & Stock Equity 8,467,851 7,890,897 7,744,327 7,678,735
Cash Flow * 600,009 546,082 430,680
Working Capital 1,742,394 1,626,044 1,678,287 1,741,828
Free Cash Flow 252,279 170,486 162,517 50,739
Invested Capital 6,712,623 6,414,347 6,265,799 6,211,775
* = Data not available
IP/PON
More and more carrier networks are being upgraded or built with IP architecture and Passive Optical Network cabling in order to allow triple play technology over wireline networks. These new networks are replacing older, copper-based networks (ATM), because IP/PON expands bandwidth and accelerates the speed of information transmission. New routers must be compatible with new network architecture, and Juniper has shifted heavily away from ATM-based routers into IP-based routers. This would be beneficial to Juniper as long as the current ATM-to-IP trend continues.
SBC: Session border controllers (SBCs) are router-like pieces of hardware used specifically for VoIP applications. SBCs are used to control calls entering a network. As VoIP becomes more popular, the market for SBCs could expand, but Juniper has exited this market entirely, which could prove to be a competitive disadvantage later.
3G:The expansion of third generation wireless technology is also connected to the expansion of IP/PON because faster wireless transmission speeds need faster wireline networks to maintain overall network speed. Thus, potential growth or decline in the broadband wireless market could affect the market for Juniper's routers.
Ethernet
Ethernet is the most common LAN technology. For a while, Juniper's routers were not ethernet compatible, and Cisco's CRS-1 router, which was ethernet compatible, stole a significant portion of the router market from Juniper, as did the entry of Alcatel-Lucent with its own ethernet-compatible routers. Recently, new ethernet card updates as well as new routers with ethernet inputs are allowing Juniper to enter a large market they had previously been left out of. If ethernet remains the dominant LAN type, Juniper's recent entry into the market could prove to be a major competitive advantage, though they may first have to struggle to get customers away from Cisco and Alcatel-Lucent. Routers are integral parts of modern networks, and security hardware is becoming more and more important, meaning that as long as Juniper keeps its routers and service hardware competitive (as it has by adding ethernet capability), it is well posed to grow as fast as the market.
Service Carrier Demand for New Equipment
Juniper's products are not sold to a general market; much of its revenue is concentrated between the small number of telecom service providers and equipment vendors that dominate the global market. Service providers typically have the most visibility into market swings since they own relationships with end consumers; market trends can lead to unpredictable and volatile cycles for equipment vendors such as Juniper.
On the flip side of this issue is that any new deals from new or existing customers have the potential to bring in outsized revenue streams. For instance, Google (GOOG)--which bought Juniper equipment previously--is likely to purchase additional routers and security equipment from Juniper in 2007. Juniper enjoys a a good deal of customer lock-in because of the nature of the business.
Enterprise Market
Juniper's entry into the service market is an indication of its entry into the corporate equipment market. Corporations have their own networks, and the market for corporate network equipment with a focus on speed and security is far larger than the carrier market. By moving into the corporate market, Juniper is expanding its potential customer base. The biggest obstacle is Cisco, which has long dominated corporate routing and security.
Acquisitions
The telecom industry is increasingly consolidating, as the merger of Alcatel and Lucent, Nokia and Siemens, and the acquisition of Redback by Ericsson have created bigger, more concentrated threats towards Juniper's competitive position. If the company moves with this trend, it could increasingly pursue its own acquisition strategy or be swallowed into a larger company such as Alcatel-Lucent or Ericsson.
Competition
While Juniper owns 30% of the router market, Cisco Systems (CSCO) dominates with a 60% share. Cisco presents the greatest threat to Juniper, because its double market share means that Cisco has the ability to engage in price wars. Also, Alcatel-Lucent (ALU) has recently been catching up to Juniper in the edge router market.
The advent of triple play is not only driving a digital media revolution, it is driving the growth of competition in the telecom infrastructure sector. Major competitors to Juniper (other than Cisco) include Alcatel-Lucent, Huawei, and Hitachi. Other smaller companies with specialized focuses and features have the potential to enter the market as triple play becomes more mainstream and entrepreneurs try and capitalize off of its potential. Many current competitors, however, have very strong market shares for older, pre-IP, ATM network architecture equipment; Juniper's focus is on IP architecture, and while its share of the ATM market is declining, its share of the IP equipment market is large and increasing. This positions Juniper to make much larger profits than competitors as triple play proliferates, increasing the demand for IP architecture equipment.
Juniper Networks deals in infrastructure equipment and security services for the telecommunications industry and generated revenues of $3.32 billion in 2009.[1] This contrasts with its 2008 total revenue of $3.57 billion. This decline in revenues mostly came from Juniper's routing products and service provider customers who purchased fewer products in 2009 as a result of the weakened global economy. As a result of the lower revenues, Juniper's net income declined from $512 million in 2008 to $117 million in 2009.[2]
Business Segments
Juniper Networks breaks its business down into two reportable segments: i) Infrastructure, and ii) Service Layer Technology (SLT).
Infrastructure (73% of Juniper's 2009 revenue[3])
Telecom infrastructure consists of the core wiring and routing that gives a network the ability to transport information (data, voice, video) from one place to another. Juniper is heavily involved in routing solutions.
Core Routers: A local area network (LAN) consists of a relatively small number of computers that are connected in a way to facilitate the movement of data between them. A core router is the type of router that takes data sent from one computer and routes it to another within the network. Core routers are also used to connect the more powerful computers that make up the "backbone" of a larger, multi-LAN network. Juniper's core routers are their T-series and M-series.
Edge Routers: Most service carriers have a massive network consisting of smaller networks networked together; for instance, cities have small cellular networks in the grander national or world network. When information is sent out of a small network, an edge router is used to reroute that data, voice, or video to the backbone network, and then from the backbone to whatever network the data is headed for. Juniper's edge routers are their E-series and M-series.
Enterprise: Business networks tend to need more features (e.g., network security) than normal edge routers can offer. Service routers have additional control and security features to protect data being sent from network to network and computer to computer. Juniper produces the J-Series line of service routers.
Ethernet: Ethernet is the most prolific type of local area network. There are four main kinds of ethernet cabling, each allowing for faster and faster speeds, but a computer and/or router needs to have a special type of input to accept ethernet cables. Until very recently, Juniper's routers did not support ethernet, but the new MX-series of routers, as well as new models of their core, edge, and enterprise routers, do.
Service Layer Technology (27%[3])
Service layer technologies provide better control and security to networks.
SSL VPN: A virtual private network (VPN) is a private database that can be accessed through the public Internet; the data on the VPN is kept private via a number of security features. An SSL VPN can be accessed over any Internet browser. Juniper produces secure access hardware to protect the data on an SSL VPN from unwanted entry.
Security: Security applicances like firewalls and intrusion detectors are meant to keep unwanted programs and people out of secure files. Juniper supplies a number of security hardwares, specially designed for home and office use.
Trends and Forces
Juniper's products are used by high-growth companies
Juniper's product portfolio appears to be extremely biased towards high-growth sectors of telecommunications equipment. Routers have become a completely necessary part of modern telecommunication networks, so as long as networks keep growing, the demand for routers will keep growing. Also, as companies get larger and larger, they will need the ability to transfer more and more data, further benefiting companies like Juniper.
The YouTube effect
The growth of online video -- from YouTube, BitTorrent, and increasingly Television Studios' own forrays onto the Internet -- has already led to massive increases in the amount of data traveling across the Internet. A single, 30-minute video clip requires many thousands of times the bandwidth that a single email message requires. As such, online video has already required that carriers spend massive amounts to upgrade their networks, and this spending has benefited Juniper, the second-largest manufacturer of routers to direct traffic on the Internet after competitor Cisco Systems (CSCO).
Balance Sheet - Assets
Cash and Equivalents 1,811,887 1,460,914 1,660,086 1,723,949
Marketable Securities 474,514 638,523 563,315 592,679
Accounts Receivable 596,622 473,953 391,545 402,934
Receivables 596,622 473,953 391,545 402,934
Prepaid Expenses 169,812 111,466 59,568 67,858
Current Deferred Income Taxes 161,535 181,955 224,792 209,560
Total Current Assets 3,214,370 2,866,811 2,899,306 2,996,980
Other Fixed Assets 493,881 484,802 466,172 457,957
Total Fixed Assets 493,881 484,802 466,172 457,957
Gross Fixed Assets (Plant, Prop. & Equip.) 493,881 484,802 466,172 457,957
Net Fixed Assets (Net PP&E) 493,881 484,802 466,172 457,957
Intangibles 121,803 47,629 23,360 12,672
Cost in Excess 3,927,807 3,759,631 3,711,726 3,658,602
Non-Current Deferred Income Taxes * * 8,205 9,784
Other Non-Current Assets 709,990 732,024 635,558 542,740
Total Non-Current Assets 5,253,481 5,024,086 4,845,021 4,681,755
Total Assets 8,467,851 7,890,897 7,744,327 7,678,735
Balance Sheet - Liabilities, Stockholders Equity
Accounts Payable 292,270 251,431 243,228 230,330
Accrued Liabilities 494,442 365,137 379,636 343,951
Deferred Revenues 660,264 594,437 544,578 619,968
Other Current Liabilities 25,000 29,762 53,577 60,903
Total Current Liabilities 1,471,976 1,240,767 1,221,019 1,255,152
Long Term Debt 103,823 98,198 94,950 92,576
Other Non-Current Liabilities 283,252 235,033 256,553 209,684
Minority Interest * 750 956 2,124
Total Non-Current Liabilities 387,075 333,981 352,459 304,384
Total Liabilities 1,859,051 1,574,748 1,573,478 1,559,536
Common Stock Equity 6,608,800 6,316,149 6,170,849 6,119,199
Common Par * 5 5 5
Additional Paid In Capital * 9,449,553 9,363,244 9,267,584
Retained Earnings * (3,137,836) (3,181,733) (3,143,924)
Other Equity Adjustments 6,608,800 4,427 (10,667) (4,466)
Total Capitalization 6,712,623 6,414,347 6,265,799 6,211,775
Total Equity 6,608,800 6,316,149 6,170,849 6,119,199
Total Liabilities & Stock Equity 8,467,851 7,890,897 7,744,327 7,678,735
Cash Flow * 600,009 546,082 430,680
Working Capital 1,742,394 1,626,044 1,678,287 1,741,828
Free Cash Flow 252,279 170,486 162,517 50,739
Invested Capital 6,712,623 6,414,347 6,265,799 6,211,775
* = Data not available
IP/PON
More and more carrier networks are being upgraded or built with IP architecture and Passive Optical Network cabling in order to allow triple play technology over wireline networks. These new networks are replacing older, copper-based networks (ATM), because IP/PON expands bandwidth and accelerates the speed of information transmission. New routers must be compatible with new network architecture, and Juniper has shifted heavily away from ATM-based routers into IP-based routers. This would be beneficial to Juniper as long as the current ATM-to-IP trend continues.
SBC: Session border controllers (SBCs) are router-like pieces of hardware used specifically for VoIP applications. SBCs are used to control calls entering a network. As VoIP becomes more popular, the market for SBCs could expand, but Juniper has exited this market entirely, which could prove to be a competitive disadvantage later.
3G:The expansion of third generation wireless technology is also connected to the expansion of IP/PON because faster wireless transmission speeds need faster wireline networks to maintain overall network speed. Thus, potential growth or decline in the broadband wireless market could affect the market for Juniper's routers.
Ethernet
Ethernet is the most common LAN technology. For a while, Juniper's routers were not ethernet compatible, and Cisco's CRS-1 router, which was ethernet compatible, stole a significant portion of the router market from Juniper, as did the entry of Alcatel-Lucent with its own ethernet-compatible routers. Recently, new ethernet card updates as well as new routers with ethernet inputs are allowing Juniper to enter a large market they had previously been left out of. If ethernet remains the dominant LAN type, Juniper's recent entry into the market could prove to be a major competitive advantage, though they may first have to struggle to get customers away from Cisco and Alcatel-Lucent. Routers are integral parts of modern networks, and security hardware is becoming more and more important, meaning that as long as Juniper keeps its routers and service hardware competitive (as it has by adding ethernet capability), it is well posed to grow as fast as the market.
Service Carrier Demand for New Equipment
Juniper's products are not sold to a general market; much of its revenue is concentrated between the small number of telecom service providers and equipment vendors that dominate the global market. Service providers typically have the most visibility into market swings since they own relationships with end consumers; market trends can lead to unpredictable and volatile cycles for equipment vendors such as Juniper.
On the flip side of this issue is that any new deals from new or existing customers have the potential to bring in outsized revenue streams. For instance, Google (GOOG)--which bought Juniper equipment previously--is likely to purchase additional routers and security equipment from Juniper in 2007. Juniper enjoys a a good deal of customer lock-in because of the nature of the business.
Enterprise Market
Juniper's entry into the service market is an indication of its entry into the corporate equipment market. Corporations have their own networks, and the market for corporate network equipment with a focus on speed and security is far larger than the carrier market. By moving into the corporate market, Juniper is expanding its potential customer base. The biggest obstacle is Cisco, which has long dominated corporate routing and security.
Acquisitions
The telecom industry is increasingly consolidating, as the merger of Alcatel and Lucent, Nokia and Siemens, and the acquisition of Redback by Ericsson have created bigger, more concentrated threats towards Juniper's competitive position. If the company moves with this trend, it could increasingly pursue its own acquisition strategy or be swallowed into a larger company such as Alcatel-Lucent or Ericsson.
Competition
While Juniper owns 30% of the router market, Cisco Systems (CSCO) dominates with a 60% share. Cisco presents the greatest threat to Juniper, because its double market share means that Cisco has the ability to engage in price wars. Also, Alcatel-Lucent (ALU) has recently been catching up to Juniper in the edge router market.
The advent of triple play is not only driving a digital media revolution, it is driving the growth of competition in the telecom infrastructure sector. Major competitors to Juniper (other than Cisco) include Alcatel-Lucent, Huawei, and Hitachi. Other smaller companies with specialized focuses and features have the potential to enter the market as triple play becomes more mainstream and entrepreneurs try and capitalize off of its potential. Many current competitors, however, have very strong market shares for older, pre-IP, ATM network architecture equipment; Juniper's focus is on IP architecture, and while its share of the ATM market is declining, its share of the IP equipment market is large and increasing. This positions Juniper to make much larger profits than competitors as triple play proliferates, increasing the demand for IP architecture equipment.