In taking its QFabric to mid-sized data centers, Juniper Networks has made the right decision. In my discussions with networking cognoscenti at customer organizations large and small, Juniper’s QFabric technology often engenders praise and respect. It also was perceived as beyond the reach, architecturally and financially, of many shops.
Now Juniper is attempting to get to those mid-market admirers that previously saw QFabric as above their station.
Quest for Growth
To be sure, Juniper targeted the original QFabric, the QFX 3000-G, at large enterprises and high-end service providers, addressing applications such as high-performance computing (HPC), high-frequency trading in financial services, and cloud services. In a blog post discussing the downsized QFabric QFX3000-M, R.K. Anand, EVP and general manager of Juniper’s Data Center Business Unit, writes, “ . . . the beauty of the “M” configuration is that it’s ideal for satellite data centers, new 10GbE pods and space-constrained data center environments.”
Juniper is addressing a gap here, and it’s a wise move. Still, some wonder whether it has come too late. It’s a fair question.
In pursuing the midmarket, Juniper is ratcheting up its competitive profile against the likes of Cisco Systems and HP, which also have been targeting the mid market for growth, a commodity in short supply in the enterprise-networking space these days.
Analysts are concerned about maturation and slow growth in the networking market, as well as increasing competition and “challenging” — that’s an analyst-speak euphemism for crappy –macroeconomic conditions.
Belated . . . Or Just Too Late
At its annual shindig for analysts, Juniper did little to allay those concerns, though the company understandably put an optimistic spin on its product strategy, competitive positioning, and ability to execute. Needham and Company analyst Alex Henderson summarized proceedings as follows:
“Despite an upbeat tone to Juniper’s strategy positioning and its new product development story, management reset its long term revenue and margin targets to a lower level. Juniper lowered its revenue growth targets to 9-12% from a much older growth target of 20% plus. In addition, management lowered gross margin target to 63-66% from the prior target of 65-67%.”
Like its competitors, Juniper is eager to find growth markets, preferably those that will support robust margins. A smaller QFabric won’t necessarily provide a panacea for Juniper’s market dilemma, but it certainly won’t hurt.
It also gives Juniper’s channel partners reason to call on customers that might have been off their radar previously. As Dhritiman Dasgupta, senior director of Enterprise System and Routing at Juniper, told The VAR Guy, the channel is calling the new QFX-3000-M “their version” of the product.
We’ll have to see whether Juniper’s QFabric for mid-sized data centers qualifies as a belated arrival or as a move that simply came too late.