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Juniper Networks jumps into the LAN switching space

Juniper Networks is hoping to beat heavy competition with its new LAN switch, but some wonder if the product can contend in the tight market.

Juniper Networks Inc. is diving headfirst into the Cisco-dominated LAN market with the release of its EX-series Ethernet switches that will begin shipping this month.

Channel partners and analysts are split on whether Juniper -- better known for its security products and carrier-class networks -- is in over its head. Believers say Juniper has a technologically stronger LAN switch than Cisco Systems Inc. -- at a better price. Skeptics, however, say Juniper can't compete with Cisco's strong customer loyalty and brand recognition, or Nortel Networks Ltd.'s less expensive products. They also say Juniper has failed in the past at breaking into new markets, citing its aborted play in the data center space, most notably.

"Juniper has to overcome two major problems: convincing channel partners that are big Cisco players, and convincing customers that have already invested millions in Cisco," said Pat Grillo, president and CEO of Branchburg, N.J.-based Atrion Communications Resources, a partner of both Cisco and Juniper.

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But some partners say the market is desperate for better LAN products. "The market has been stagnant in the enterprise," said Bill Ketrenos, vice president of secure infrastructure at Seattle-based Structured, a Cisco and Juniper partner. "The American car industry controlled the market … then other folks came along with better cars. Here's potentially a better car."

Partners that hype EX-series' superiority point to the Junos operating system (OS), which runs on all of Juniper's products, including routers, security systems and larger switches. Juniper execs are spinning the simplicity in deployment and management in using one OS since rivals must often patch together multiple systems and code to form solutions.

"This single operating system is easier to implement and cheaper to maintain," said Steve Pataky, Juniper's vice president of worldwide channel development, adding that management ease is important in the channel since "a lot of our partners are the outsourced IT departments for their customers."

Juniper has also promised partners the same carrier-class components in its LAN switches that it provides in its service provider equipment. "It has the service provider DNA with five-nines reliability," said Phil O'Reilly, CEO of Solunet, a West Melbourne, Fla.-based network infrastructure provider and partner of Cisco and Juniper.

Gartner analyst Joe Skorupa said he doesn't doubt that Juniper's LAN switches are solid, but he said that may not matter amid an economic downturn and pricing wars. "Juniper hasn't seen what Cisco will do to them on pricing," he said, adding that Cisco has gone 80% off its listed price to snag a deal. "What do you do when you win the technical battle, but Cisco is judged 'good enough' or Nortel has 20% to 40% lower prices?"

Pataky points out that pricing wars lead to thinner margins for resellers. "If Cisco wants to run a race to zero, that's their strategy. We have no interest in that," he said. Partners will see 20% to 30% margins, but more importantly Juniper won't compete with them to offer management services -- another source of ongoing profit, he said.

Juniper is also focusing on customers that see the business value of better network design. "It really is true that there is a classification of customers for whom the network is strategic. When you talk to those customers about changing economics or redesigning the network on a single OS … it becomes less about the price of the individual box."

For Atrion's Grillo, moving the Juniper LAN is about positioning. "It's going to be difficult to get the Fortune [500] accounts that have millions invested," Grillo said. "But Juniper makes really good security products. For the companies that we have sold millions in [Juniper's] firewalls and VPNs and SSL boxes, those guys will be more attentive to listen."

While Analysts like Skorupa said Juniper missed the networking technology refresh cycle, Solunet's O'Reilly said he's willing to take time to integrate Juniper into the market. "Cisco's business -- and most vendors' business -- is built around three- to five-year planned obsolescence. Eventually, all of our customers are going to have to decide to upgrade. We expect to sell thousands [of Juniper's products] to these customers." In the meantime, Solunet is having its Juniper customers evaluate the switch.

As for partnering with Juniper, Ketrenos, O'Reilly and Grillo said the company has made a commitment to support the channel for the EX-series. "It's not like when they bought DX (data center product) but never paid attention to it," Grillo said. "The first word out of their mouths now is, 'You gotta start selling our switches.'" O'Reilly added that the company has "gone to great lengths to train its sales force" and that "the engineering and marketing support are phenomenal."

Juniper began working on its partner strategy for the overall enterprise push in April '07, Pataky said. During market research, the company learned that its partners were seeking LAN switches to complete the Juniper portfolio, he said, so he expects the first wave of uptake to be among Juniper's elite and select partners. "This is not a product in search of a channel, but a channel in search of a product."

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