Juniper CEO: Why Cisco's approach is wrong

December 14, 2010: 12:54 PM ET

Kevin Johnson joined networking gear maker Juniper (JNPR) two years ago as CEO. A former senior executive at Microsoft (MSFT) who worked at IBM (IBM) before that, Johnson is Juniper's first outsider to run the company. I spoke with him recently about Juniper's disproportionate bet on research and development, how Juniper competes against Cisco (CSCO) and whether or not he still uses Microsoft products. An edited transcript follows.

Fortune: If the business world at large has any impression of Juniper, it's that it has long had a profitable and successful role as the No. 2 to Cisco. Fair?

Kevin Johnson: Well, certainly we compete in the domain of networking, as does Cisco. Juniper is a 14-year-old company, and it's made a lot of progress in that 14 years, but Cisco still remains a very large competitor.

F: What's the difference in approach between Juniper and Cisco?

KJ: First of all, if you look at the industry dynamics, there's a couple of key things that are happening. Number one, the network has become more and more relevant to the socioeconomic fabric that we all live in. There's more traffic. There's more digital devices. There's more content consumption. And so the challenge for large customers is how to carry that traffic efficiently, and that's where we take a slightly different approach than Cisco. The approach that we're taking is one that says, we invent our own silicon, but we also have created a single operating system called Junos that does all the networking functions in one operating system. We've opened up a set of application programming interfaces so that we have third parties that also innovate on top of Junos. That's a very different approach than the one that Cisco has taken.

F: Okay. What does Cisco do that's different?

KJ: If you look at the legacy network providers, over the last 10 years the approach that they have taken is a very hardware box-oriented approach. There have been over 150 acquisitions in the networking space over the last 10 years, and each one of those acquisitions has involved a different box, if you will. And each box runs proprietary software, and some type of silicon. And what that's created for customers is huge complexity. Our Junos operating system works seamlessly with industry standards, and it simplifies the process of managing these large-scale networks. More

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