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Summary:

Updated with details from the conference call after the jump: Juniper has officially announced that Kevin Johnson is going to the CEO, Scott Kirens is going to be chairman. The lack of response from their PR department shows that they are woefully out of date in […]

Updated with details from the conference call after the jump: Juniper has officially announced that Kevin Johnson is going to the CEO, Scott Kirens is going to be chairman. The lack of response from their PR department shows that they are woefully out of date in this “immediate news age,” ironic for a company that makes equipment to enable this immediacy.

Johnson’s hiring indicates, according to some of my sources, that the company might be going in the direction of services, such as network management. (Of course they didn’t address any of the important stuff in the press release, which is packed with platitudes and non-information.) All that sounds good, but in theory very few companies (IBM, for example) have made a big business out of services. Many of them end up buying pure-play service companies.

So what does Johnson, a non-equipment guy, bring to the table? That’s not very clear, except for a reputation that got a severe battering in the light of failed Yahoo bid. Welcome Mr. Johnson, now all you have to do is prove yourself. There will be more details revealed on Juniper’s conference call with investors tonight, we are told

Update from the conference call (from Stacey): Juniper didn’t meet analysts’ expectations with its second- quarter earnings, but saw profits rise by 40 percent from the same period last year. Unfortunately, it didn’t give us a lot of information about its plans for Johnson.

Kirens focused on the company’s plans to lift operating margins to 25 percent by the fourth quarter, and credited Johnson with the ability to make sure the company continued to drive down costs while increasing sales. Pretty standard stuff. There was no indication of a wholesale rush into services, though Kirens spent a lot of time talking about how Juniper would continue its focus on selling not just hardware, but the operating system and software as well. He said Juniper would seek to be a “strategic provider” for large contracts.

What’s clear from the call is that Kirens doesn’t view Johnson as damaged goods after the failed Yahoo bid.

Original post, that was published last night at 8:45 p.m.

The web is abuzz with the news of Kevin Johnson, president of Microsoft’s Platform & Services division deciding to leave the company. A key lieutenant of Microsoft CEO Steve Ballmer, and one of the main forces behind Microsoft’s bid for Yahoo, his timing is curious, indicating that perhaps Microsoft is done dealing for Yahoo. The Wall Street Journal is reporting that Johnson is headed to Juniper Networks, where is going to become the CEO.

The news made me ask the question: What about the current CEO, Scott Kirens, who has been with the company since the very beginning? Is he leaving the company? We are still waiting to hear back from their PR spokespeople. If true, this would be the second major hire by the company this month. The company had hired Luis Avila-Marco, formerly VP of corporate strategic planning at Scientific Atlanta (a Cisco company), as the head of corporate strategy.

So if you put a new strategy guy together with an audacious and big-thinking sales guy with a software background, you could infer that Juniper Networks is about to shift gears and move in new directions. It might be that the company is ready to rumble with Cisco Systems. The new focus would mean the company is finally beginning to think beyond just routers, and contemplating opportunities offered by data center makeover and new ultraband deployments.

Avila-Marco, for instance, could help the company increase its presence in the cable business. Cable companies worldwide are slowly rolling out DOCSIS 3.0-based networks, which need lot of routers and other gear to serve the consumers with speeds that get up to 100 megabits per second.

  1. Om,

    Great post. I was thinking the exact thing. A software guy moving to a company that sells expensive routers. I don’t know the guys background. Nevertheless, very strange move.
    Some time back I had heard that Juniper was considering offering SaaS apps for network management/qos and eventually moving into a business line that would compete with Linksys via an acquisition (D-Link?).

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  2. Some folks are mentioning that Juniper could move into Services, so your comment suddenly makes a lot of sense. I think network management as a service and security as a service could be two big plays for the company. The only downside – after known Scott for 12 years, I probably would have a tough time trying to figure out new relationships :-)

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  3. Remember that expensive routers are nothing more than software wrapped in expensive hardware. You absolutely need a good handle on software to make and sell these boxes.

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  4. Great post Om,

    As a recent ex-Juniperite and big fan of the company, I really think they can make a big leap forward with more software smarts… especially as with NAC, UPnP etc, endpoints are becoming more aware of the network and vice versa.

    The industry needs a big competitor to Cisco in enterprise market, and Juniper has a great range of products and people in the field.

    Services play would be interesting, I know traditionally they had tried to not compete with their service provider partners (eg – never got into MSSP themselves before), will be interesting how this plays out..

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  5. [...] to the Wall Street Journal Johnson is going to lead Juniper Networks. As Om Malik notes Juniper is going to be interesting to [...]

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  6. Good post Om. It will be very interesting to see what Kevin would do at Juniper.

    Though service component is a potential money spinner, traditionally when firms like Juniper competes with their own long term partners (who are service providers for ages now), historically we have seen that this model is a failure in the long run.

    Eg. Enom and Directi (domain registration services companies) trying to enter into hosting space and The Planet/EV1 (hosting companies) trying to enter into domain name registration services.

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  7. [...] obvious that Juniper is shuffling execs for some sort of strategy change. The company also recently hired Luis Avila-Marco, formerly VP of corporate strategic planning at [...]

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  8. I suspect the news leak about where Kevin Johnson would be joining next caught Juniper PR by surprise, they probably intended to announce it a few days later after the dust had settled on his departure from MSFT.

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  9. Kevin Johnson is not a software person (his background is support & sales) and as President of the Windows/Live/MSN division he really did not deliver anything. (expect the Yahoo soap opera!). Just curious how this benefits Juniper (time will tell).

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  10. Seems more like a visionary founder CEO bringing in a more operations oriented replacement to me. Juniper is big enough that operational excellence is as important as innovation and the technology. Scott’s good at the latter. Kevin’s background favors the former as he’s had IT and Operations management roles, overseen integration of acquisitions and worked closely with Ballmer and, especially, Turner.

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