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Juniper Networks' Performance in Fiscal 2016: A Detailed Look

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Part 5
Juniper Networks' Performance in Fiscal 2016: A Detailed Look PART 5 OF 10

Will Juniper Networks’ Security Segment Revenue Fall in 2017?

Competition with established players

Juniper Networks (JNPR) faces competition with established players as well as niche players in the network security segment. Top players in this segment include Cisco Systems (CSCO), Checkpoint Software Technologies (CHKP), Palo Alto Networks (PANW), Fortinet (FTNT), and Huawei, with market shares of 14.0%, 12.6%, 11.4%, 9.8%, and 4.9%, respectively. Huawei is quickly penetrating the security segment and emerging as a challenger to market leaders.

The changing face of the enterprise security space has prompted companies to acquire smaller companies and start-ups with disruptive technologies in order to gain a competitive edge over their peers. By purchasing a smaller company with a novel approach to network security, the acquiring company can offer an exhaustive suite of offerings to its customers.

Will Juniper Networks’ Security Segment Revenue Fall in 2017?

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Last year, Symantec acquired Blue Coat Systems. The acquisition enabled Symantec to offer a comprehensive enterprise suite of offerings for email, cloud, endpoint, and network security.

Juniper’s Security segment revenue fell significantly in 4Q16 and fiscal 2016

Revenue from Juniper’s Security segment fell 27.0% YoY (year-over-year) to $318.0 million in fiscal 2016, from $435.6 million in fiscal 2015. In 4Q16, the segment’s revenue fell 30.0% YoY to $81.0 million. The YoY fall was primarily due to a weakness in its enterprise, cloud, and telecom businesses.

During the 4Q16 earnings call, CEO (chief executive officer) Rami Rahim said that Juniper is refreshing its Security product portfolio as well as looking at competitive pricing to drive sales. He stated, “We believe we are gaining mind share from customers, partners and analysts with our refreshed portfolio in the enterprise and expect growth from security in 2017.”

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