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To: Glenn D. Rudolph who wrote (84361)	11/17/1999 1:03:00 AM
From: Mark Fowler	Respond to of 164684

Juniper finally branches out By Om Malik NEW YORK. 3:40 PM EST-If there was one company that should worry the fast-growing Cisco Systems' (nasdaq: CSCO) management, it would have to be Mountain View, Calif.-based Juniper Networks (nasdaq: JNPR). Barely four years old, Juniper is already beginning to nip at Cisco's heels. According to a recent report by San Francisco-based research firm RHK Inc., during the first six months of 1999, Juniper Networks secured an impressive 13% of revenues and 8% of units sold in the hotly contested Internet Protocol (IP) routers market. In its first year of product shipment, Juniper captured the interest of the market with its M40 router. Although Cisco retains its sizeable market share of 87% of revenues, it has seen some erosion in its 1998 position of 98%. This is going to be a fiercely contested market. Juniper makes super routers that are optimized for the Internet, and according to Framingham, Mass.-based market research firm International Data Corp., the market for devices that can carry information at gigabit and terabit speeds will exceed $1.4 billion by 2003. Juniper CEO Scott Kriens wants to claim a substantial chunk of that market. This morning the company announced that it would acquire privately held networking hardware and software architecture company Layer Five of Palo Alto, Calif., for about $19 million in stock and cash. "Layer Five is not a product acquisition, instead it is a talent acquisition," says Kriens, who thinks acquisitions such as these will help the company compete against bigger rivals more effectively. "Nortel and Lucent have been very active on the announcement front, but we are yet to see any real products," adds Kriens, taking a swipe at Juniper rivals. "The market is divided between Cisco and us." As a reported here earlier (Juniper invests in MRVC subsidiary), Juniper also confirmed that it was making a minority investment in San Jose, Calif.-based New Access Communications. "The idea of taking a stake in New Access is to get to know a new market," says Kriens. New Access Communications develops equipment that can be used in metropolitan fiber optic networks. "IP infrastructure is our franchise and we are looking to be the innovative leader in the IP infrastructure business," says Kriens. "We need to continuously produce higher speed products and stay focused on the performance curve. " Already the Juniper M40 router has been making waves, and at the end of the third quarter the total number of Juniper customers stood at 41, including major backbone providers such as UUNet Technologies, a division of MCI WorldCom (nasdaq: WCOM) and Cable & Wireless. "What you are going to see us increase is our international presence," says Kriens. The company recently entered into a marketing alliance with Alcatel (nyse: ALA) of France. Juniper is betting that the French telecommunication equipment maker's strong presence in Europe and Asia will boost Juniper sales in those markets. "Our strategy (for growth in the future) has three aspects - partnerships (like the one with Alcatel); second is taking minority investments (as in case of New Access) and the third one being acquisitions," says 41-year-old Kriens. "We are looking to build this franchise through integration," he adds. Analysts speculate that one such innovation would be eliminating the SONET protocol and putting IP directly over the fiber.