Juniper Networks

Origins and funding

Pradeep Sindhu, a scientist with Xerox’s Palo Alto Research Center , conceived the idea for Juniper Networks while on vacation in 1995

and founded the company in February 1996. At the time, most routers used for Internet traffic were intended for phone calls and had dedicated circuits for each caller . Sindhu wanted to create data packet-based routers that were optimized for Internet traffic , whereby the routing and transferring of data occurs "by means of addressed packets so that a channel is occupied during the transmission of the packet only, and upon completion of the transmission the channel is made available for the transfer of other traffic." He was joined by engineers Bjorn Liencres from Sun Microsystems and Dennis Ferguson from MCI Communications.Sindhu started Juniper Networks with $2 million in seed funding, which was followed by $12 million in funding in the company's first year of operations. About seven months after the company's founding, Scott Kriens was appointed CEO to manage the business, while founder Sindhu became the Chief Technology Officer. By February 1997, Juniper had raised $8 million in venture funding. Later that year, Juniper Networks raised an additional $40 million in investments from a round that included four out of five of the largest telecommunications equipment manufacturers: Siemens, Ericsson, Nortel and 3Com. Juniper also received $2.5 million from Qwest and other investments from AT&T.

Growth and IPO

Juniper Networks had $3.8 million in annual revenue in 1998. By the following year, its only product, the M40 router, was being used by 50 telecommunications companies. Juniper Networks signed agreements with Alcatel and Ericsson to distribute the M40 internationally. A European headquarters was established in the United Kingdom and an Asia-Pacific headquarters in Hong Kong. A subsidiary was created in Japan and offices were established in Korea in 1999. Juniper Networks's market share for core routers grew from 6% in 1998 to 17.5% one year later, and 20% by April 2000.Juniper Networks filed for an initial public offering in April 1999 and its first day on the NASDAQ was that June. The stock set a record in first-day trading in the technology sector by increasing 191% to a market capitalization of $4.9 billion. According to Telephony, Juniper Networks became the "latest darling of Wall Street", reaching a $7 billion valuation by late July. Within a year, the company's stock grew five-fold.Juniper Networks's revenues grew 600% in 2000 to $673 million. That same year, Juniper Networks moved its headquarters from Mountain View to Sunnyvale, California.

Competition

By 2001, Juniper controlled one-third of the market for high-end core routers, mostly at the expense of Cisco Systems sales. According to Businessweek, "analysts unanimously agree that Juniper's boxes technically superior to Cisco's because the hardware does most of the data processing. Cisco routers still relied on software, which often results in slower speeds." However, Cisco provided a broader range of services and support and had an entrenched market position. The press often depicted Juniper and Cisco as a "David versus Goliath" story. Cisco had grown through acquisitions to be a large generalist vendor for routing equipment in homes, businesses and for ISPs, whereas Juniper was thought of as the "anti-Cisco" for being a small company with a narrow focus.In January 2001, Cisco introduced a suite of router products that Businessweek said was intended to challenge Juniper's increasing market-share. According to Businessweek, Juniper's top-end router was four times as fast at only twice the cost of comparable Cisco products. Cisco's routers were not expected to erode Juniper's growing share of the market, but other companies such as Lucent, Alcatel, and startups Avici Systems and Pluris had announced plans to release products that would out-pace Juniper's routers.Juniper introduced a suite of routers for the network edge that allowed it to compete with Cisco. Juniper's edge routers had a 9% market share two months after release. Both companies made exaggerated marketing claims; Juniper promoted its products as stable enough to make IT staff bored and Cisco announced lab tests from Light Reading proved its products were superior to Juniper, whereas the publication itself reached the opposite conclusion. By 2002, both companies were repeatedly announcing products with faster specifications than the other in what Network World called a "'speeds-and-feeds' public relations contest".By 2004, Juniper controlled 38% of the core router market. By 2007, it had a 5%, 18% and 30% share of the market for enterprise, edge and core routers respectively. Alcatel-Lucent was unsuccessful in challenging Juniper in the core router market but continued competing with Juniper in edge routers along with Cisco.

Further development

In late 2000, Juniper formed a joint venture with Ericsson to develop and market network switches for internet traffic on mobile devices, and with Nortel for fiber optic technology. In 2001, Juniper introduced a technical certification program and was involved in the first optical internet network in China.:?12? Juniper's growth slowed in 2001 as the telecommunications sector experienced a slowdown and revenues fell by two-thirds during the dot-com bust. 9 to 10% of its workforce was laid off.Juniper had rebounded by 2004, surpassing $1 billion in revenues for the first time that year and reaching $2 billion in revenue in 2005. Beginning in 2004, with the acquisition of NetScreen, Juniper Networks began developing and marketing products for the enterprise segment. Juniper had a reputation for serving ISPs, not enterprises, which it was trying to change. By 2005, enterprise customers accounted for one-third of the company's revenues, but it had spent $5 billion in acquisitions and R&D for the enterprise market.In 2006, more than 200 US companies restated their financial results due to a series of investigations into stock backdating practices. Juniper stockholders alleged the company engaged in deceptive backdating practices that benefited its top executives unfairly. In December 2006, Juniper restated its financials, charging $900 million in expenses to correct backdated stock options from 1999 to 2003. This was followed by a $169 million settlement with stockholders in February 2010.

2008–present

In July 2008, Juniper's first CEO, Scott Kriens, became chairman and former Microsoft executive Kevin Johnson was appointed CEO. Johnson focused the company more on software, creating a software solutions division headed by a former Microsoft colleague, Bob Muglia. Juniper also hired other former Microsoft executives to focus on the company's software strategy and encourage developers to create software products that run on the Junos operating system. Juniper established partnerships with IBM, Microsoft and Oracle for software compatibility efforts. The SSL/VPN Pulse product family was launched in 2010, then later spun off to a private equity firm in 2014 for $250 million.In 2012, Juniper laid off 5% of its staff and four of its high-ranking executives departed. The following year, CEO Kevin Johnson announced he was retiring once a replacement was found. In November 2013, Juniper Networks announced that Shaygan Kheradpir would be appointed as the new CEO. He started the position in January 2014.In January 2014, hedge fund, activist investor and Juniper shareholder Elliott Associates advocated that Juniper reduce its cash reserves and cut costs, before Kheradpir was officially appointed. That February, Juniper reached an agreement with Elliott and other stakeholders for an Integrated Operating Plan that involved repurchasing $2 billion in shares, reducing operating expenses by $160 million and appointing two new directors to its board. That April, 6% of the company's staff were laid off to cut expenses. In November 2014, Kheradpir unexpectedly resigned following a review by Juniper's board of directors regarding his conduct in a negotiation with an unnamed Juniper customer. An internal Juniper executive, Rami Rahim, took his place as CEO.In May 2014, Palo Alto Networks agreed to pay a $175 million settlement for allegedly infringing on Juniper's patents for application firewalls.In 2015, Wired Magazine reported that the company announced it had found unauthorized code that enabled backdoors into its ScreenOS products. The code was patched with updates from the company.