After taking a look at its strategy Juniper Networks’ new CEO has written a new operating plan to “refocus the company on innovation that matters most to service providers and enterprises.”
Shaygan Kheradpir, who took over the company last month, said Thursday he will streamline the management structure dubbed One-Juniper to create an “agile and execution-oriented company” that will focus on the fastest growing network segments with products for high intelligent networks and cloud environments.
“Our customers, which include some of the world’s largest service providers, financial services companies and government agencies, are increasingly building hyper-scale, resilient, secure, highly intelligent, open and virtualized networks,” Kheradpir said in a statement.
“As a pure-play, high-performance networking company with engineering and organic innovation at its core, I believe Juniper is uniquely positioned to help these customers address their rapidly evolving networking needs. Our new, sharpened focus will bring us closer to our customers as we innovate together to address the opportunities ahead, and will enable us to operate much more efficiently as One-Juniper.”
The plan has four elements: the streamlined structure with more focused R&D and product strategy, focusing on fastest growing network equipment segments, cutting costs and returning more money to shareholders.
On this last point the company plans to return at least $$3 billion in capital to shareholders over the next three years, including more than $2.0 billion in share repurchases through to 2015.
There was no immediate word on what products Juniper [NYSE: JNPR] plans to drop.
Industry analyst Zeus Kerrvala of ZK Research believes the company is going in the right direction. “I think Juniper’s strength has always been high performance networking, but I think over the past few years it had focused too much on trying to be all things to all people instead of just focusing on what makes the company unique,” he said in an email. “The focus should help Juniper deliver the right products to a customer based that needs what Juniper has to offer.”
In its recent Q4 2013 financial results Juniper reported record revenues and 11.6 per cent year-over-year growth, its sixth consecutive quarter of year-over-year revenue growth.
But it still trails industry leader Cisco Systems Inc.
About 65 per cent (US$3 billion) of Juniper’s annual revenues come from service providers, while 35 per cent ($1.6 billion) comes from sales to enterprises. Just over half of revenue comes from sales to the Americas.
Hardware accounts for about 80 per cent of revenue, with the rest coming from software sales.