- Location: California
- Website: https://www.juniper.net
Juniper Networks 2000 Annual Report
JUNIPER NETWORKS IP INFRASTRUCTURE SOLUTIONS
FINANCIAL HIGHLIGHTS Statements of Operations Data (In thousands, except per-share amounts) Years ended December 31, 2000 1999 1998 1997 Net revenues $ 673,501 $ 102,606 $ 3,807 Pro forma net income (loss)(i) $ 184,036 $ (4,748) $ (29,736) Pro forma diluted net income (loss) per share (i) $ 0.53 $ (0.03) $ (0.40) Net income (loss) $ 147,916 $ (9,034) $ (30,971) $ (10,363) Diluted net income (loss) per share $ 0.43 $ (0.05) $ (0.40) $ (0.20) Shares used in computing diluted net income (loss) per share 347,858 189,322 77,742 51,546 (i) Pro forma net income (loss) excludes the amortization of goodwill and other intangibles, deferred compensation, in process R&D, and charitable contribution charges in all periods. Pro forma amounts are unaudited. All results reflect the three-for-one split of our common stock effective January 18, 2000 and the two-for-one split of our common stock effective June 16, 2000. Balance Sheet Data (In thousands) As of December 31, 2000 1999 1998 1997 Cash, cash equivalents and short-term investments $ 1,144,743 $ 345,958 $ 20,098 $ 46,227 Working capital $ 1,132,139 $ 322,170 $ 14,432 $ 44,691 Total assets $ 2,103,129 $ 513,378 $ 36,671 $ 50,210 Total stockholders’ equity $ 730,002 $ 457,715 $ 17,065 $ 46,048 $0.24 927 $295 698 $0.17 $201 523 420 $113 $0.08 355 $64 280 $45 $30 $0.00 $0.01 $0.03 Q3 ’99 Q4 ’99 Q1 ’00 Q2 ’00 Q3 ’00 Q4 ’00 Q3 ’99 Q4 ’99 Q1 ’00 Q2 ’00 Q3 ’00 Q4 ’00 Q3 ’99 Q4 ’99 Q1 ’00 Q2 ’00 Q3 ’00 Q4 ’00 Revenue $M Pro Forma Earnings per Share Employees to Date Actual results could differ materially from those anticipated in forward-looking statements in this document as a result of certain factors, including those set forth in the risk factors described in the Company’s SEC filings, including its recent Annual Report on Form 10K.
TO OUR SHAREHOL Juniper Networks enjoyed a record setting 2000. We achieved and surpassed our goals—both as a company and as a community of people. Following is a progress report on our commitment to five principle growth objectives. Extend our strategic market leadership position in the largest network backbones in the world. We extended our core leadership position in the largest backbones in the world by furthering the technology lead of the M40 and M20, and intro- ducing the M160, more interfaces, and new software and features unopposed by competition. The largest backbone operators in the world are using Juniper Networks routers to deploy their new network infrastructure. Diversify products and services globally. Juniper Networks has diversified its product line. We ended 1999 having just introduced our second product, the M20. We ended 2000 with a product portfolio of five, ranging from the M5 to the M160. Other milestones include deployment of over 75 interface types, delivering services from thousands of bits per second to billions of bits per second, and delivery of our 7th release of JUNOS software. Our feature set now extends from the core of the network to include the service rich requirements of the high-speed access marketplace. We continued to see worldwide demand from both new and existing customers, with international revenue representing 35% of total revenue for the full year of 2000. Our diverse market coverage enables us to do business in over 30 countries around the world with support from 48 resellers throughout Europe, Asia and Latin America. In addition, we penetrated a significant number of new accounts in North America through our direct sales force and channel partners. Increase the number of markets we serve, leveraging both our technology leadership and our distribution and support presence worldwide. Juniper Networks increased the number of its markets from one to three. In addition to our heritage focus on the core backbone market, Juniper Networks added significant products to a second market, the edge, with our access portfolio of the M5 and M10 routers and several new releases of JUNOS software. Also, we are establishing our presence in a third market, the emerging Mobile IP market, and look to our joint venture with Ericsson as a powerful vehicle in the realization of this objective. Deliver on our commitment to financial fundamentals. Juniper Networks increased revenue six fold from 1999 and solidified important areas of gross margin, earnings and cash flow. Our commitment to financial fundamentals will serve the company well as economic conditions vary over time. Expand our workforce dramatically while protecting the quality of our team. Finally, Juniper Networks tripled the size of its global organization through the course of 2000, adding extremely talented people to all aspects of the business. The accomplishment of these objectives shows our relentless focus and execution in 2000. However, they all combined to accomplish a larger and significant purpose, which is to position Juniper for 2001 and beyond.
LDERS Looking forward Any new company must reach a certain critical mass—a level of resources, products, customers and financial sustainability—that allows for the transition from a new to an established franchise. More than any individual measure, we accomplished in 2000 the opportunity to control our own destiny. This does not signify the removal of risk, or an accomplishment on which we can rest. In fact, it stimulates exactly the opposite reaction in the people of Juniper Networks—an excitement over what we have now made possible by our efforts, and a glimpse of the kind of company we can now create given our track record. Juniper Networks envisioned the IP Infrastructure market as both new and fundamentally different since creating the company in 1996. We can now see new steps required to lead this new market to its potential, for the Internet is now becoming a new multi-service public network carrying voice, video and data traffic on a common fabric—both enhancing and simultaneously economizing the network opportunity to connect people and places around the globe. Juniper Networks has two key priorities for 2001—to drive our innovation engine at full speed, furthering our product and technology lead in Scott Kriens – Chairman, President and multiple markets; and continue delivering our commitment to financial fundamentals. Chief Executive Officer Our investment in product development—a Juniper Networks hallmark since the founding of the company in 1996—will continue as we build on the competitive advantage we have worked so hard to establish in our market. This investment is necessary to reach the opportunities our success has created, and will be measured both by the continued addition of high quality talent, and the investment in the supporting infrastructure that will bring new products to market quickly. Our proven fiscal commitment to financial metrics also will be unwavering, for we measure our success through the delivery of growth and profits. “ Juniper Networks has two key priorities for 2001—to drive our innovation engine It is this parallel achievement of investment, profitability and growth that will drive our focus on relentless execution in 2001. at full speed, furthering our product and technology lead in multiple markets; and I would like to thank our employees, our customers, our suppliers and other business partners, and our investors for their continued confidence and commitment to Juniper Networks. continue delivering our commitment to financial fundamentals. ” Scott Kriens Chairman, President and CEO
POWERING INTERNET PROTOCO Our Business Technology Edge dimensions for Juniper Networks platforms are small yet include Juniper Networks powers the new Internet Protocol (IP) Leading software, hardware and silicon technology expertise high port density—a crucial aid to service providers and carriers infrastructure by furnishing service providers with high performance underpins Juniper Networks solutions, which offer service providers who face scarce space for equipment racks. The Internet software core IP network routing solutions for growing the Internet backbone. the only universal interface bridging traffic between optical Internet system for all Juniper Networks systems is called JUNOS software, backbones and legacy electronic routers. The company’s research which provides full manageability and interoperability with other Market Opportunity Internet routers and applications. These applications include multi- and development focus is scalable, high-end internet routing. The market opportunity for Juniper Networks is significant. Our unique engineering philosophy is to provide customers with cast services such as video conferencing, corporate broadcasts and High-end core router systems—Juniper Networks’ focus—are the flexibility of JUNOS software solutions implemented in high collaborative computing. essential for large service providers who build long-haul connec- performance hardware. Juniper Networks helps service providers create rock-solid tions for the Internet. The worldwide core IP router market was applications and performance by integrating technologies such To accomplish our Internet leadership position, all Juniper estimated at $2.6 billion during 2000, according to Infonetics as multiprotocol label switching and virtual router redundancy. Networks solutions employ purpose-built application-specific inte- Research. Juniper Networks 2000 financial results eclipsed the These protocols enable multiple differentiated services and more grated circuits (ASICs). Juniper Networks ASICs provide industry market growth rate: net revenue was $674 million, up 556% reliability during circuit congestion. As a result, Juniper Networks leading performance with intelligent services. ASICs also include from 1999. Juniper Networks is now shipping solutions for the portfolio of IP routing solutions provide carrier-class fault toler- quality of service capabilities, which are crucial for differentiated related metropolitan Internet edge routing market, which was ance—the highest level of system reliability equivalent to less service applications such as voice-over-IP(VoIP) and secure virtual estimated at $1.2 billion in 2000, according to Infonetics. Juniper than five minutes of unscheduled equipment downtime annually. private networks (VPNs). Juniper Networks provides industry-lead- Networks is also establishing a presence in the emerging mobile ing support for more than 75 connectivity interfaces. Physical IP market through a joint venture with Ericsson. Pervasive use of the Internet is driving growth in these infrastructure markets. Hundreds of millions of people worldwide now use the Internet. But the real story about Internet growth is not just the fact of an ever-increasing number of users. The Internet is now the integrated network of choice for data, voice and video traffic. People and businesses rely on the Internet more than ever. They expect superior reliability and performance. Juniper Networks sole focus is providing solutions to these chal- lenges—a seasoned track record that includes widely deployed IP routing systems in the world’s largest network backbones. “ One area where Juniper Networks has really distinguished itself is its customer service. The ability for them to understand the need for quick turnaround to keep its customers happy is absolutely a requirement for us to keep deploying Juniper Networks in the way that we plan to do. ” Chris DeMarche Chief Technical Officer Verio, Inc
G THE NEW OL INFRASTRUCTURE Product Portfolio Dedicated High-Speed Access. The M5 Internet backbone Manufacturing During the past year, Juniper Networks expanded its router platform extends Juniper Networks core technology to the Juniper Networks outsources all manufacturing. Outsourcing product portfolio from two to five internet backbone router edge of provider networks connecting businesses to service provides the benefits of better asset utilization, faster time-to- platforms—M5, M10, M20, M40 and providers intelligently and at high speeds. market, faster ramping of production volume and lower total M160. The scope of products The platform provides top performance with product costs. reflects company expansion into new compact design and Celestica and Solectron provide Juniper Networks with markets, such as data center hosting power consumption. turnkey system manufacturing. The manufacturing process includes and dedicated high-speed access. Services Portfolio prototyping, material procurement, final assembly, testing, control All platforms share common JUNOS software, services and A key attraction for Juniper Networks customers is a and shipment to Juniper Networks customers. ASIC technology, which give service providers full system interoper- world-class services portfolio. Services speed implementation of IBM Corporation manufactures Juniper Networks ASICs with ability and compatibility with Juniper Networks solutions and help customers maximize their the latest silicon production technologies. value-added customer applications. The M160 platform offers an investment. Juniper Networks provides a flexible, aggregate throughput exceeding 160 million packets per second. Sales and Distribution comprehensive portfolio of services offerings. Sample applications for these platforms include: Juniper Networks sells products and • Support services include core support via Large Backbone Core Routing. The M160 internet services through a combination of its world- telephone through the Juniper Networks backbone router platform is purpose built for large backbone wide direct sales force, specialized value-added Technical Assistance Center, and online cores operated by the biggest service providers and carriers. ASICs resellers and distributors. through the Customer Support Center. rapidly translate optical bandwidth into new, differentiated IP Customers get optional choices for on-site services and provides for efficient, scalable expansion. support and hardware replacement. Hosting. The M40 internet backbone router platform provides • Professional services are available in for network expansion of high-growth service providers. The short- and long-term options for sophisti- platform delivers bandwidth required to cost-efficiently grow cated project planning, designing, implement- networks to speeds of 40 gigabits-per-second, plus applications ing, operating and managing core networks. such as virtual LANs for ensuring greater control over expanding • Education services for product and technology training. network operations. Peering. Peering points are where Internet backbone connec- tions join and meet between different service providers. Delays at peering points can be a major weak point in the Internet. The Juniper Networks M20 is a space- efficient Internet backbone router platform that packs per- formance to meet any public or private peering application. Small Metro. The M10 platform provides Internet backbone routing for service providers in small metropolitan areas. Like the M5, this platform also provides high performance with a small physical footprint. The M10 also enables new, differentiated Scott Kriens Chairman, President and Chief Executive Officer services at edge sites such as IP packet filtering and sampling. Pradeep Sindhu Vice Chairman, Chief Technology Officer, Founder
JUNIPER NETWORKS Engineering a Global IP Network with Juniper Networks Technology Cable & Wireless is a global provider of advanced plexity of routing logical IP connections overwhelms too many communications services, including Internet, data, voice, video and long-haul links. By packing more traffic on one link, Young says wireless. Cable & Wireless is one of the largest Internet backbone Cable & Wireless can simplify routing—often to just one hop. carriers in the world. Customers in 70 countries include Internet This capability makes the network more valuable to Cable & service providers, carriers, mobile operators, content providers, Wireless customers. businesses and governments. “Faster equipment makes the core of the backbone Cable & Wireless’ recent business story operationally more simple and stable,” Young says. Superior is radical transformation from a traditional car- performance and system stability is why Cable & Wireless rier to a premier global supplier of best-in-class uses technology from Juniper Networks. Internet Protocol (IP) services. All services run Cable & Wireless operates a on the Cable & Wireless-owned core network US backbone of several OC- built with Juniper Networks technology. 48 city-to-city links; each link provides throughput of about 2.5 Juniper Networks underpins gigabits-per-second. The company also operates a North American the Cable & Wireless global OC-192c link at 10 Gbps; that link will soon cross the Atlantic. In IP infrastructure 2001, the Cable & Wireless global infrastructure plans to include The transformation of Cable & Wireless included the pur- chase of MCI’s US Internet communications business in 1998. The 84 hubs linked by more than 7,000 miles of optical fiber in Europe, 6,000 in Japan and 17,000 in North America. The “ Juniper equipment has been remarkably stable for IP networking. I am quite impressed by Juniper’s nearly perfect Cable & Wireless business strategy was to build and own a prof- company also owns 460,000km of submarine cable. itable global IP network providing top quality of service. MCI’s IP business—already one of the largest in the world—was then The core network technology linking Cable & Wireless‘ IP infrastructure includes more than 60 Juniper Networks M40 operational performance. ” Jeff Young VP of Network Engineering Cable & Wireless Global evaluating routers from Juniper Networks as the basis for a new routers and more than 20 M160 routers. All of these products run generation IP backbone. the same feature-rich version of JUNOS Internet software. Cable & Wireless redeploys existing core gear from Juniper “We looked to Juniper Networks because we ran out of gas Networks to the network edge to provide faster dedicated access “Juniper Networks equipment has been remarkably stable in the old network,” says Jeff Young, vice president of network links to enterprise customers. for IP networking,” says Young. “I am quite impressed by Juniper engineering at Cable & Wireless Global. Young conducted that eval- Networks’ nearly perfect operational performance.” More big The use of Juniper Networks IP infrastructure has enabled uation while working for MCI prior to the acquisition. “We knew routers from Juniper Networks are planned for the Cable & Wireless Cable & Wireless to connect its global network to more places many people recruited to work at Juniper Networks and had great network spanning the United States, UK, Europe and Japan. than any other network, according to Young. Based on the per- confidence in their IP routing and engineering abilities.” Cable & formance and reliability of Juniper Networks technology, Cable & Wireless adopted Juniper Networks new generation of IP technolo- Business demand drives core network upgrades Wireless pledges high customer standards, including guaranteed gy as the worldwide core routing standard after acquiring MCI. Internet connections, reliability, speed, security, flexibility and Business demand for IP services drives frequent upgrades to “A lot of our future rests on giving our customers the confi- quality of service. the Cable & Wireless core network. “Network bandwidth demand dence that they can move their mission critical applications to has always grown more than 100% annually, sometimes as much “Every time we move to a new generation of Juniper Cable & Wireless,” Young says. “The philosophy is, unless you’re as 300% per year,” Young says. Networks technology, it’s more stable than the generation controlling the technology and costs of the Internet infrastructure, before,” Young says. “We’re very happy.” it’s difficult to provide quality services and make money on it.” To meet this demand, Cable & Wireless upgrades core net- work equipment with new, higher-capacity equipment from Juniper Performance and system stability Networks. Replacement takes place an average of every 12 to 18 are key requirements months. “Useful life for telco equipment was 15 years,” says Maximizing backbone bandwidth is crucial for an IP-focused Young. “Newer core technology now lasts five to seven years.” service provider like Cable & Wireless because the technical com-
CUSTOMER FOCUS Building Ultra-fast Optical IP Backbones with Juniper Networks Metromedia Fiber Network Inc. (MFN) is a leader in Networks engineers,” Stuart says. “We all know each other’s deployment of optical IP Internet infrastructure and services within names and see each other at standards committee meetings. key domestic and international metropolitan areas. MFN’s busi- We’ve worked with Juniper Networks from the beginning of its ness strategy differs from other IP network providers in that it also product development.” owns ultra high speed, long haul optical links directly connecting The team chose Juniper Networks technology because it businesses between areas of its metro coverage. was the only core IP backbone systems provider meeting all The MFN optical infrastructure provides business customers requirements for implementing MFN’s business strategy. with unprecedented network and application performance, reliability Requirements included line-rate packet forwarding for true 10 and security. The core network infrastructure is built substantially gigabits-per-second OC-192c system throughput; routing protocol with Juniper Networks technology. expertise; and integrated capabilities for operations, administration and management. “Juniper is one of the few who have all three,” Building an optical IP WAN with Stuart says. Juniper Networks MFN’s original business provided optical fiber network MFN recently finished lighting the first 10,000 miles of its infrastructure in large metropolitan areas. Their strategy changed 18,000-mile optical backbone between major metro areas across in 1999 when MFN started acquiring companies to give customers North America. The MFN backbone is capable of transmitting the more value. The goal was to offer managed Internet services plus high capacity, wide area network connectivity for Internet, data equivalent of all content in the Library of Congress in just seven seconds. “ Our team has many combined years of experience working with Juniper engineers. We all know each and multimedia applications. The North America net- other’s names and see each other at standards com- MFN purchased AboveNet work is also linked to MFN’s mittee meetings. We’ve worked with Juniper from the metro service regions in Europe and MIBH. AboveNet pioneered the idea of providing co-location sites for Internet service providers and businesses with mission-critical use for global optical-based connec- tivity. The global backbone includes implementing 170 M160 beginning of its product development. ” Stephen Stuart VP of Research & Advanced Development of the Internet. routers from Juniper Networks, plus a handful of M20 routers for Metromedia Fiber Network space-constrained peering locations. JUNOS software allows the MIBH was a transit resale backbone-outsourcing provider core network to interoperate with gear from other suppliers. In the competitive landscape of IP backbone service, and a Juniper Networks customer. Its team included major players Juniper Networks’ devotion to customer service is a business in the construction of giant network backbones for UUNET, Sprint Juniper Networks provides better use of capital necessity, according to Stuart. In its quest to provide superior and Genuity. office-to-office global IP connectivity, what MFN values most is the Juniper Networks IP backbone router platforms also provide “Our job was to implement the union of MFN business implementation of technology features it requests of Juniper MFN with better use of capital. “I can provide more service for the units and build out an international optical IP network backbone,” Networks. “It’s hard to get this kind of responsiveness from big capital dollars because Juniper Networks has the industry’s best says Stephen Stuart, vice president of research and advanced vendors,” says Stuart. “Juniper Networks’ response is great. utilization of bandwidth,” says Stuart. Juniper provides almost development at MFN. Stuart worked for MIBH prior to the acquisi- That’s rare in the industry.” three times the router interface capacity of its competitors. tion. “MFN needed to own the wide area network backbone,” Stuart says. Another key benefit afforded to MFN customers by Juniper Networks technology is better network security. The Internet A technology engineering Processor II application-specific integrated circuit (ASIC) used in all relationship of trust Juniper Networks’ routers provides peak performance—even MFN tapped into a significant engineering relationship by when MFN filters off denial-of-service attacks from hackers. “We continuing its use of Juniper Networks technology. “Our team has need the features that Juniper Networks provides to stay on the many combined years of experience working with Juniper cutting edge of technology.”
CORPORATE OFFICERS AND DIRECTORS Executive Officers Directors Scott Kriens William Hearst Chairman, President and Chief Executive Officer Kleiner, Perkins, Caufield & Byers Pradeep Sindhu Vinod Khosla Vice Chairman and Chief Technical Officer Kleiner, Perkins, Caufield & Byers Marcel Gani C. Richard Kramlich Chief Financial Officer New Enterprise Associates Michael Dodd Stratton Sclavos Vice President of Operations VeriSign, Inc. Steven Haley William R. Stensrud Vice President of Worldwide Sales and Service Enterprise Partners Carl Showalter Vice President of Marketing Peter Wexler Vice President of Engineering Corporate and Investor Information Corporate Headquarters Transfer Agent Juniper Networks, Inc. The transfer agent and registrar for the common stock is 1194 North Mathilda Avenue Norwest Bank Minnesota, N.A. 800.767.3330 Sunnyvale, California 94089 Legal Counsel 408.745.2000 Wilson Sonsini Goodrich & Rosati Investor Relations Palo Alto, California For further information on the company, including the 10K, Auditors please visit www.juniper.net/company/investors. Ernst & Young LLP Stock Listing Palo Alto, California Juniper Networks common stock is quoted on the Nasdaq National Market under the symbol JNPR. Juniper Networks is a registered trademark of Juniper Networks, Inc. Internet Processor II, JUNOS, JUNOScript, M5, M10, M20, M40, and M160 are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks may be the property of their respective owners. The Juniper Networks, Inc. trademarks may not be used in connection with any product or service that is not Juniper Networks in any manner that is likely to cause confusion among customers or in any manner that disparages or discredits Juniper Networks, Inc. Photography on pages 1-4 by Christopher Springman Productions and Weinberg & Clark Photography
1194 North Mathilda Avenue Sunnyvale, California 94089 408.745.2000 www.juniper.net