New Deals for Juniper Networks - Analyst Blog

Juniper Networks Inc. (JNPR), one of the leading providers of networking infrastructure products and services, announced that IP2 Internet, a Dutch Internet service provider, has deployed its entire range of network infrastructure for growing its business. Financial terms of the deal have not been disclosed.

Juniper’s networking products (Switches, Routers and security appliances) aid IP2 Internet to develop its growing business through the simplification of networking operations. The networking architecture runs on the Junos operating software, with the help of which, IP2 Internet now offers data-intensive services including hosting, storage, Internet access and colocation from a unified data center.

There has also been a notable reduction in the total cost of ownership (including both setup and running costs), which has gone down by around 20%. Moreover, the networking architecture provides enough room for further enhancement of capabilities without additional capital outlay, going forward.

We remain encouraged by the rapid deployment of Juniper’s networking products and services by originations to meet the increasing business demand. We also remain encouraged with Juniper’s continuous efforts to drive deal wins from other industrial sectors.

Carilion Clinic, a non-profit making organization, deployed Juniper’s Junos-powered data center solutions to meet the growing IT needs, arising from clinical operations and a newly formed medical school. Moreover, Tring Communications, Albania-based Internet, phone and digital television services provider, also deployed Juniper’s Networks MX Series 3D Universal Edge Routers, EX Series Ethernet Switches and SRX Series Services Gateways to manage its growing subscriber base by delivering secured applications.

The company’s strong second-quarter performance was based on a high demand for Juniper’s products. We believe substantial increases in IT spending budgets of various companies are indicative of the growing demand for networking products through the rest of 2010.

Although Juniper’s growth appears imminent with an improvement in network spending, stiff competition from other big players such as Cisco Systems Inc. (CSCO) and Hewlett-Packard Company (HPQ) may pose serious challenges. The high operating cost of the company and its European exposure also add to our concerns.

We currently have a short-term Hold recommendation on Juniper, implying a Zacks #3 Rank.