Focus on product innovation
In 2016, Juniper Networks (JNPR) plans to accelerate its existing strategy by capturing inflection points in the industry. To achieve this, the company will focus on product innovation, partnerships, and acquisitions that complement its R&D (research and development) strategy.
Over the last few years, Juniper has tried to diversify its business, which might protect the company against macroeconomic cyclicality.
Juniper is looking to diversify across geographies and verticals. It expects its telecom segment to account for 40% of total revenues. This is followed by the enterprise, cloud, and cable segments, which are expected to account for 30%, 24%, and 6%, respectively, of 2019 revenues.
Juniper has stated that its software and services business is a very high-growth segment. The company expects the segment to account for 45% of total revenues by 2019.
Cloud market is growing rapidly
As we saw in the previous part of the series, Juniper is optimistic about the cloud trend. Synergy Research Group estimates that 1Q16 cloud infrastructure service revenues have surpassed the $7 billion mark.
The United States continues to account for almost half of the cloud and Internet data centers market, according to another Synergy report. This is surprising, considering that the demand for cloud services is worldwide. However, this situation could change since all major cloud players plan to open several data centers in Europe and Asia.
As shown in the above table, Juniper has underperformed the S&P 500 since 2010. It will be interesting to watch Juniper’s performance in 2016 to see if the company can overcome a challenging macroeconomic environment.
Juniper expects revenues of approximately $1.2 billion in 2Q16, which includes $10 million–$15 million in revenues from the BTI Systems acquisition.