For around 20 years, Rami Rahim’s been witnessing all of the highs and lows that Juniper Networks has gone through.
After he started his career as a meager junior employee, this technologist climbed the ranks to become the CEO of this networking giant by 2014. Rahim took over command from Shaygan Kheradpir, who had been ousted from the board after they had a problem with his conduct during a negotiation with customers.
Rahim was a part of Juniper while it was booming when the shares were trading around $200 back in 2000. He was also there during the tough times when there were a number of cost-cutting measures and layoffs between 2012 and 2014. Like a lot of hardware companies like HP and Cisco, Juniper has seen their business get impacted by cloud computing quite a bit. Instead of purchasing expensive gear, a lot of companies are choosing to go with a pay-as-you-go model from various tech giants like Microsoft and Amazon Web Services.
Now, Rahim is working on retooling the business of Juniper so it can sell more software-oriented networking products while switching its core business.
Role of Software
When asked how he was managing to shift from selling just hardware to also selling software, he said he believed they were doing well and even though there was so much more to be done, it was the entire industry that was yet to adapt to the changes. There’s no denying the important role of software in networking.
80 percent of the engineers at Juniper develop software and have always been developing it. Today, most of their value and that of their peers comes from tightly packaged hardware and software in systems. This will change with time to software and systems that are loosely coupled. Here, software has the portability to be able to move from tightly coupled systems to ones which are offered at cloud data centers.
Business models are changing as well. Nowadays, most companies monetize value on a per-port basis on a switch or router. This is just how the industry is operating presently. People perceive the value is in hardware even though it’s software that innovates the most. Nowadays, people talk about moving to subscription models or utility models where payments are only made for the traffic processed through a switch or router.
Role of Amazon and Google
Much of this change is because of cloud computing providers like Google and Amazon. They are the fastest growing vertical around today. The way they buy hardware could be a little unpredictable, though. That’s why their business is cyclical. What they have to do to mitigate fluctuations is diversify across various areas of technology.