In the Spotlight: Juniper Networks' Stephen Elop

Stephen Elop joined Juniper Networks in January in the newly created post of chief operating officer. Formerly at Adobe Systems through its acquisition of Macromedia (where he was CEO), Elop spearheaded a sweeping internal overhaul of Juniper this year. He spoke to Telephony earlier this month about the changes.

On the need for an overhaul at Juniper: The company’s been growing quickly. We’ve always been the nimble challenger. As we get larger, we have to make sure we maintain that. When a company begins as a startup with a few people, you start with a functional orientation—you’ve got marketing and sales people, engineering. As it grows, there’s a certain point where you have to take steps to broaden the number of people running the business and driving the overall success of the company. You need to give resources to do that effectively. If you don’t break away from that original organization, that can slow things down. You may end up in a place where too many people are involved in certain things. Juniper needed to step back and look at those things at this state in its development. Particularly when you’re a challenger and your competitor is much broader player, it’s more appropriate for us to be more deliberately focused by increasing investment in the development of solutions targeted to those customers. Part of what we have to do is increase investment in things that are supportive of what [service providers] are trying to accomplish, like IPTV.

On changes made: When you’re trying to drive increased alignment, part of that is clarifying roles and responsibility, making sure it’s clear who’s responsible for what set of customers. There are a number of things we did around [profits and losses]. People owned a particular P&L more clearly than they did before. We also formed an organization whose purpose is to draw out elements of engineering and technology that are leveragable across the whole organization. A good example of that is silicon development. We consolidated design development across all groups. Another example relates to the Junos operating system, critical elements of which were shared across the organization.

On staffing: This is not a workforce reduction exercise by any means. It’s about making sure we’re setting ourselves up for the next stage of growth. We’re hiring at a significant rate. In the second quarter, we hired over 200 people.

On the service provider space: There is turbulence in the service providers space, not so much among customers, but as it relates to system integrators out there--the NSNs and Ericssons of the world. That world is very dynamic right now. It’s a different environment than the one we were operating in 18 to 24 months ago. We’re looking closely at how to be more successful there. Regardless of what happens, it’s very clear to us that, in our channels, it’s still the customer making decisions about how they want to use their networks and their desire to use best of breed networks. [Alcatel-Lucent, Ericsson and Siemens] are very important growth partners for us. They get a great deal of attention from us. You can combine and consolidate, but there’s still an absolute number of really smart people on the planet who know how to solve these really tough problems. Some portion of those really smart people have chosen to work at Juniper, which means we’ll continue to have a place in the market.

On research and development: As we grow, the amount we’re spending on R&D is growing in absolute dollars. But part of it is being decisive about what’s going to matter most to customers. Any company runs the risk of having too many focus areas. There’s nothing we’re backing away from in terms of existing programs. It’s a matter of looking at next-generation products.

On the 800-pound gorilla: Cisco’s in a situation where they’re having to make decisions or lack of decisions because of what we like to call the ‘catalogue of compromises’ they’ve had to introduce over the years—things that were acquired but not necessarily integrated because it’s hard to integrate in a [point of presence]. We have a huge advantage being able to integrate different elements of the network. We can drive further differentiation by being an open provider. Cisco’s taken the proprietary route, designed to take advantage of its dominance in the market.

On acquisitions: It’s definitely one of the tools in our tool bag, no question. You could see an acquisition in our future. We have all the essential elements we need. The moves you’re likely to see are small, opportunistic areas where we can get a technological advantage by buying rather than building.