The chart attached above provides a breakdown of Juniper Networks Revenue by Segment. The company designs, develops, and sells products and services for high-performance networks to enable customers to build scalable, reliable, secure and cost-effective networks for their businesses, while achieving agility, efficiency and value through automation.
Juniper Networks Revenue By Segment
|Revenue By Segment||Q1 2018|
|Cloud Revenue||$268.3 million|
|Service Provider||$479.9 million|
They sell their high-performance network products and service offerings across routing, switching, and security technologies. In addition to their products, they offer their customers services, including maintenance and support, professional services, and education and training programs. They believe their silicon, systems, and software represent innovations that transform the economics and experience of networking, helping their customers achieve superior performance, greater choice, and flexibility, while reducing overall total cost of ownership.
Further, their intent is to lead in the area of software solutions that simplify the operation of networks, and to allow their customers across their key verticals to deliver further value over their networks. They anticipate that their increased focus on software business models will result in an increase in software revenue as a percentage of total revenue over time.
In 2017, they began reporting revenue on the following verticals: Cloud, Telecom/Cable, and Strategic Enterprise, which they believe better aligns with their business model compared to their previous reporting of revenue by Service Provider and Enterprise. The chart attached above provides a breakdown of Juniper Networks Revenue by Segment. But overall, a summary of the types of customers included in their verticals is as follows:
Cloud companies that are heavily reliant on the cloud for their business model’s success. As an example, customers in the cloud vertical can include cloud service providers as well as enterprises that provide software-as-a-service, infrastructure-as-a-service, or platform-as-a-service.
Telecom/Cable includes wireline and wireless carriers and cable operators.
Strategic Enterprise includes enterprises not included in the Cloud vertical. In particular, they are industries with high performance, high agility requirements, including financial services; national, federal, state, and local governments; as well as research and educational institutions.
They are focused on and continue to see significant opportunities from the implementation of cloud architectures, such as large public and private data centers, as well as distributed cloud infrastructure which resides in multiple, distributed data centers in order to place applications or services closer to end users, such as enabling security and networking as a service. The chart attached above provides a breakdown of Juniper Networks Revenue by Segment.
They believe the network needs for their customers in their Telecom/Cable and Cloud verticals are converging, as are those of Strategic Enterprises, as all of these customers recognize the need for high performance networks and leveraging the cloud for improved agility and greater levels of operating efficiency.
As these customers continue to grow, they believe their network architectures will continue to evolve. They believe their understanding of high-performance networking technology, and their strategy, position us to capitalize on the industry transition to more automated, cost-efficient, scalable networks.
In routing, they believe that certain large cloud customers are starting to transition their wide area networks from scale-up to a scale-out architecture as they continue to add capacity, which has resulted and they expect may continue to result in a transition of these customers from purchasing their MX product family to their PTX product family. These architectural shifts have led to a near-term slowdown in their net revenues as in some cases there is a pause before the new architecture ramps as well as lower average selling prices for PTX product family compared to MX product family. They are unable to predict the exact timing or duration of the transition, as it will vary from customer to customer.
In switching, they see that certain large cloud customers who can rapidly scale based on increased demand are in the process of adopting 100-Gigabit connections, or 100G, resulting in certain large deployment delays at their largest cloud customers as they prepare for this adoption.
Despite these ongoing deployment delays and architectural shifts, they remain confident in their competitive position and strong relationships with these strategic customers. Their overall strategy with their cloud customers has not changed and they continue to execute against their innovation roadmap, which includes their plan to continue to grow their relevance and their business in the cloud vertical.
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