Juniper Networks emphasized its cloud business in its second quarter 2017 earnings call for the three months ended June 30, 2017. Juniper CFO Ken Miller said the cloud vertical within the company grew 32 percent year-over-year.
The company reported net revenues of $1.3 billion for the quarter, an increase of 7 percent both year-over-year and sequentially. Non-GAAP net income was $220.5 million, an increase of 15 percent year-over-year and 24 percent sequentially. Earnings per share was $0.57.
Of its top 10 customers for the quarter, four were in cloud, five were in telecom and cable, and one was a strategic enterprise.
Juniper CEO Rami Rahim said the company has a strong presence in routing and switching with Tier 1 cloud providers, but “There is a broader opportunity in the cloud space, not necessarily with the hyperscalers, but the broader cloud market when you look at SaaS providers, regional cloud providers, telco cloud: that’s here now that we are benefiting from.”
Rahim also gave some hints about the kinds of startups that Juniper may acquire. He mentioned security, silicon photonics, and cloud monitoring.
“I think any sort of inorganic activity that we would contemplate would be more around the new modes of security… around enabling customers to migrate to public clouds or to hybrid cloud offerings without compromising their data, their users, their workloads,” he said.
Rahim also cited silicon photonics as an area where Juniper would consider acquisitions. “We believe that there is an opportunity there through innovation to achieve better cost of goods sold from an optical standpoint,” he said.
About a year ago, Juniper purchased Aurrion, a company involved with silicon photonics technology. And in March 2017 Juniper introduced a data center interconnect system that created a tighter relationship between packet and optical elements, leveraging Aurrion.
On the earnings call, Rahim said, “We believe there is an architectural inflection point where customers can achieve vast levels of cost efficiency by managing and operating their networks across packet and optical.”
Finally, as far as acquisition prospects, Rahim mentioned Juniper’s 2016 purchase of AppFormix. The startup’s software provided operators with real-time and historic monitoring and performance optimization. It has now been merged with Juniper’s Contrail technology.
Although AppFormix’s software is around automation in the cloud data center, Rahim said it has much broader applicability than that. “That would be sort of indicative of what you might expect in the future as well,” he said in terms of other acquisition prospects.
During the second quarter, Juniper unveiled a new universal chassis for operators to standardize all routing and switching deployments across data centers and the wide area network. And it also announced its Junos Node Slicing, allowing routers to be used for different routing functions.
Referring to those rollouts on the earnings call, Rahim said, “We as a company are operating with far more efficiency. We’re achieving that by developing fewer products that address a broader market opportunity.”
The first iteration of the universal chassis is in the market today. It supports both routing and switching, and it will eventually support edge routing. “Typically, these things take a couple of quarters, maybe nine months, to get to revenue,” Rahim said. “I do expect revenue for this first iteration of universal chassis in the second half of this year.”
Finally, he mentioned the newly announced hire of Bikash Koley as CTO of Juniper. Koley currently works at Google as the head of network architecture, engineering, and planning. Koley is scheduled to join Juniper in August. He will bring his cloud expertise from his experience at Google.
“We have really honed in our strategy on what we believe is the biggest trend that is impacting our industry, and that is the cloud,” said Rahim. “Cloud is in fact an architectural evolution that’s becoming a way of life across every vertical that we participate in today.”