Sensing the improvement in demand in the data center segment,
) has come up with new products to enhance the capabilities of
mid-sized data center businesses.
The company has recently announced the launch of Juniper
Networks QFX3000-M QFabric System, which helps clients explore the
full benefits of the company's QFabric System. Juniper claims that
the new version requires 63.0% less space. It will also save
additional costs as it reduces cable consumption by 74.0% and power
consumption by almost 54.0%.
The company also announced additions to its EX8200 switches
portfolio, which is backed by Virtual Chassis technology and helps
customers in managing up to four data center cores with a single
New product and technology launches have always been a focus
area for Juniper. Apart from traditional networking products and
related services, the company is entering the security software
segment to diversify its business model and add new revenue
streams. The acquisition of Myconos Security is an indication of
this strategy, as it will fight against hackers and help the
company expand in the security segment.
In a report published by
)-acquired IT security company McAfee, the company notes the
growing adoption of virtualization, cloud computing technologies
and flattened network architectures through next-generation data
centers. The company continues to witness lower spending on
in-house servers by mid-sized organizations. The company cites the
improvement in demand for new services, budgetary constraints, and
globalization as the chief factors influencing this.
Further, a survey conducted on 100,000 facilities by a data
center dedicated website, datacenterdynamics.com, shows that data
center usage is expected to be around 7% in 2012. Moreover, the
website has also increased its investment projection from about $30
billion in 2010-11 to $35 billion in 2011-2012.
We believe this is good news for networking companies such as
), which are adopting necessary steps to seize this opportunity in
the data center business.
Juniper's considerable effort to increase its business volume
notwithstanding, the company was able to post just mediocre first
quarter results. This was mainly on account of strategic increases
in its headcount. However, revenue improved in the EMEA and the
Americas, and the company provided impressive second quarter
Although strategic alliances and new acquisitions are positives
for Juniper, stiff competition from industry stalwarts like Cisco
Systems Inc. and
), coupled with high European exposure, remain headwinds.
Juniper has a Zacks #3 Rank, implying a short-term Hold
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