Juniper Security: Eyes on the Enterprise

By Baselinemag  |  Posted 2004-10-01 Email Print this article Print
 
 
 
 
 
 
 

Juniper Networks made a big move into network security by buying firewall appliance vendor NetScreen for $3.4 billion. But the deal doesn't ensure overnight success.

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After years of sticking to high-speed networking gear for service providers, Juniper flung open the door to the enterprise this year with its $3.4 billion acquisition of network security vendor NetScreen—a grab for real estate in a market dominated by archrival Cisco.

But some NetScreen customers say the Juniper strategy isn't a slam-dunk. Doug Torre, director of networking and technical services at Catholic Health System in Buffalo, N.Y., says Juniper's acquisition of NetScreen was "a very shrewd move" because security is a high-growth market, but he adds that "it's a tough transition to go into the enterprise space when you have been used to dealing with [telecommunications] carriers ... It remains to be seen how successful they will be."

Kittu Kolluri, general manager of Juniper's security products group, concedes the company has "marketing challenges" to "reintroduce Juniper as a security vendor." But NetScreen, founded in 1997, brings with it a customer base impressed with the speed, small size and manageability of its products.



Four years ago Stephens Media Group, a Las Vegas-based publishing company, installed two NetScreen firewall appliances and found them much simpler to manage than the Nokia firewall appliances (running Check Point software) it had previously maintained. The Nokia units required constant patching of the operating system, says Steve Olson, the company's infrastructure services manager. "NetScreen was one of the first companies offering this kind of simplicity in a very small form-factor," he says. Olson adds that NetScreen has been "very responsive" in soliciting feedback on recommendations for their firewalls.

Commerce Bank, a 340-branch financial services firm based in Kansas City, Mo., replaced three HP-UX servers running a firewall from Network Associates (which has since renamed itself McAfee) with two NetScreen-500 appliances that cost less per unit than the previous servers and take up one-fourth the rack space. And whereas the previous firewalls were "running out of gas," operating at their maximum capacity, the NetScreen appliances handle an average of 20 megabits per second of throughput running at just 10% capacity, says Mark E. Price, security analyst at the bank.

Price adds that his group didn't need to reboot the NetScreen appliances for about a year afterward, and only then when the devices' code was upgraded: "An appliance just makes life simpler."

Network Security

Juniper Networks
1194 N. Mathilda Ave., Sunnyvale, CA 94089
(408) 745-2000
www.juniper.net

Ticker: JNPR (NASDAQ)

Employees: 1,553

Krishna "Kittu" Kolluri
VP & GM, Security Products Group
Previously NetScreen's general manager of secure access products; last year NetScreen acquired virtual private network specialist Neoteris, of which he was president and CEO.

David Flynn
VP of Products, Security Products Group
Formerly vice president of marketing at NetScreen. Prior to that, he held marketing and product management positions with network equipment maker 3Com.

Products
NetScreen firewall appliances range from the 5XT for small branch offices, to the 5400, which can supposedly handle as many as 1 million concurrent sessions. NetScreen-IDP intrusion-detection appliances can scan for unauthorized activity at speeds of up to 1 gigabit per second.

Reference Checks

Radianz
Lloyd Hession
Chief Security Officer
Project: Network services provider to the financial industry runs more than 100 NetScreen firewalls at data centers in the U.S., the U.K. and Switzerland.

University of Nevada, Reno
Jeff Springer
Network Security Manager
jeffs@unr.edu
Project: University with 15,000 students runs two NetScreen-5200s, two 500s and two 5GTs on its network.

Catholic Health System
Doug Torre
Dir., Networking and Technical Services
(716) 862-1779
Project: Health-care network in Buffalo, N.Y., runs one NetScreen-25 (which it plans to upgrade to a pair of 50s) at its Internet connection and four 5XTs.

Commerce Bank
Mark E. Price
Security Analyst
mark.price@commercebank.com
Project: Midwest bank runs two NetScreen-500s in high-availability mode with a third for backup, plus an IDP-100 intrusion-detection appliance.

Stephens Media Group
Steve Olson
Infrastructure Services Manager
solson@reviewjournal.com
Project: Las Vegas newspaper publisher has two NetScreen-208s at its Internet connection, plus two NetScreen-100s in front of its financial systems. It also has deployed 5XT units at 30 locations.

Landmark Credit Union
Rick Pomeroy
Assistant VP, Technology and IS
(262) 574-4900
Project: The 12-branch Wisconsin credit union uses a NetScreen-25 firewall on its secondary Internet connection.

Executives listed here are all users of Juniper's products. Their willingness to talk has been confirmed by Baseline.

Juniper Operating Results*

2004YTD20032002
Revenue$530.95M$701.39M$546.55M
Gross margin67.8%63.3%57.9%
Operating income/loss$42.07M$57.01M-$127.04M
Net income/loss$20.99M$39.20M-$119.65M
Net margin4.0%5.6%-21.9%
Earnings per share$0.04$0.10-$0.34
R&D expenditure$104.72M$176.10M161.89M

* Fiscal year ends Dec. 31
YTD reflects first six months
Source: company reports

Other Financials**

Total assets: $6.68B
Stockholders' equity: $5.75B
Cash and equivalents: $675.91M
Long-term debt: $400.00M
Shares outstanding: 506.19M
Market value as of 9/24: $13.37B
**As of June 30, 2004, except as noted



 
 
 
 
 
 
 
 
 
 

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