Juniper Networks Inc. (JNPR) is on a contract winning spree. Broadband telecommunications provider Bresnan Communications will be using Juniper’s MX480 Universal Edge Routers to regulate the flow of traffic on its next-generation MPLS network. The resulting converged platform is expected to support rich subscriber services.
The company did not disclose the monetary value of this deal, but expects it to generate revenue on a recurring basis, as the combined product is expected to provide a better solution to the end user.
In addition, Juniper also announced another customer win. London Grid for Learning (LGfL), the world’s largest fiber network used for education purposes, upgraded its data center network with the help of enhanced networking products, such as routing, switching and security solutions from Juniper.
The network upgrade has helped the company to provide bandwidth-rich multimedia teaching and learning services, including videoconferencing tie-ups with museum and specialist learning centers, content streaming, as well as online managed learning resources covering 2,600 primary and secondary schools in greater London.
We believe that these are encouraging business wins for the company, adding to its revenue streams in the upcoming quarters. As per the recent findings by research firm Dell’Oro Group, the networking market will continue to grow through 2010, driven by increased demand for 10G Ethernet products and the integration of data centers. Due to Juniper’s expertise in Ethernet products, we believe it will be able to grab a major share of this additional demand.
Juniper is one of the top three players in the networking & communication devices market. The company delivered decent first quarter numbers, and reported a substantial increase in revenue. Juniper has been growing through strategic alliances and acquisitions, as well as the launch of new products that have resulted in a continuous flow of customers wins.
With companies substantially increasing their IT spending budgets, the demand for networking products will continue to grow through the rest of 2010. While growth looks imminent, stiff competition from other big players like Cisco (CSCO) and Hewlett-Packard (HPQ) may pose some challenges. Apart from this, the high operating cost is an added pressure.
We maintain our Neutral rating on Juniper.
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