With the rising demand for data centers, the demand for
networking products from companies such as
) is also growing. Different companies (both large and SMB)
across geographies are taking the help of data centers to provide
support for their IT systems. This is fueling the growth in data
The company recently won a deal from global Web hosting
provider PEER 1. Juniper's integrated routing, switching and
security technology is being used in PEER 1's U.K. data center.
This will likely provide the latter's customers with
carrier-grade performance, reliability and security.
The solution offered by Juniper will help PEER 1 lower server
downtime in its flagship green data center in Portsmouth by
approximately 33.0% over existing systems. This new facility
offers Power Usage Efficiency (PUE) scores that are better than
the industry standard.
Juniper is a player in a fast-growing, emerging segment.
According to a recent survey published by Gartner, $3.7 billion
will be spent on global IT systems this year, which accounts for
a 4.2% increase over the previous year. As for data centers, a
total spend of $192 billion is expected, which accounts for a
4.5% increase from 2012. The increased spending represents double
the growth the industry saw in 2012. What's more, the research
firm expects another 4.2% growth in fiscal 2014.
Again, as per research conducted by
), the current data traffic in data centers is in the zettabyte
range and by 2016 it is expected to quadruple to 6.6 zettabytes
annually. So we believe that Juniper has ample opportunity for
growth over the next few years.
The solid growth prospects make us positive about Juniper's
new product traction. The company is focusing on revenue growth
as well as cost reduction initiatives, which are supported by
reduction in headcount, improvement in the supply chain and
On the other hand, Juniper faces stiff competition from
). We believe that Juniper is well-positioned in the networking
space and could capitalize on much of the worldwide spending on
Currently, Juniper has a Zacks Rank #2 (Buy).
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