Juniper Networks has blossomed in a landscape dominated by Cisco. The company designs and sells network infrastructure equipment used to deploy and manage services and applications across Internet protocol (IP) networks. Its products include routers, network traffic management software, virtual private network and firewall devices, data center and WAN acceleration tools, and intrusion prevention systems. Juniper sells directly and through resellers to network service providers, enterprises, government agencies, and schools. The company has resale agreements with Ericsson, IBM, and Nokia Siemens, and it counts Ingram Micro and NEC among its distribution partners. More than half of its sales are made overseas.
Juniper has two primary product segments: infrastructure and service layer technologies (SLT). The infrastructure group, which accounts for about three-quarters of the company's revenues, encompasses Juniper's switching and routing equipment; sales of switches account for more than 60% of sales. The SLT segment includes data and network protection, application performance, and bandwidth optimization tools.
The company's revenue rose in 2011 due to strong global demand from both telecom network operators and enterprise customers, primarily for its infrastructure products; meanwhile, sales of its SLT products slipped. Juniper's income rose in 2011 as well, despite higher operating costs, particularly in the areas of research and development, sales, and marketing.
Juniper has historically relied on telecom network operators including AT&T and Verizon, which both accounted for about 10% of sales in 2010, to make large equipment purchases. However, no single customer accounted for more than 10% of sales in 2011.
Juniper uses acquisitions to supplement its internal product development efforts and enter new markets. In 2012 Juniper bought Web security software developer Mykonos for about $80 million in cash to expand its selection of network security products. The previous year the company bought assets related to network timing synchronization and monitoring systems designed by California-based Brilliant Telecommunications for $4.5 million. Juniper's interest in Brilliant's technology stemmed from its effort to improve the flexibility of core product lines as the complexity and intersections of wired and mobile networks increases.
Breaking a five year hiatus from acquisitions, the company bought five companies in 2010 to add new products and technology to its portfolio. It bought Ankeena Networks, a developer of new media infrastructure technology, to help it address the fast-rising volume of video traffic on fixed and mobile networks. Juniper also bought Internet video storage and delivery systems specialist Blackwave that year to complement its Media Flow digital media delivery product family, and it acquired SMobile Systems for about $70 million to add security technology for smart phones and tablets to its Junos Pulse product line.
The company additionally paid $152 million to buy Trapeze Networks from Belden to boost its enterprise business in acknowledgement that demand from telecommunications companies may be set to diminish. Finally, it paid $95 million in cash to acquire Altor Networks, a provider of network security systems for virtual (cloud-based) servers, as demand for secure cloud computing services from businesses in many industries increases.
Juniper's technology opened a market long dominated by rival Cisco Systems and has helped it take a chunk out of the powerhouse's market share. Juniper is among a number of companies that have touted superior technology to differentiate their offerings, but designs its equipment to be compatible with that of the ubiquitous Cisco platforms.
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