Nothing Jive About Juniper

The tiny networking startup nabs some savvy investors

Cisco Systems beware: Juniper Networks Inc. has you in its sights. Sure, it's a tiny startup with zero revenues. And Juniper's claim to high-speed networking technology that outpaces Cisco's best is still just a boast. But Juniper is worth taking seriously. For one thing, there's a who's who of networking and telecom equipment makers backing the venture. On Sept. 2, they were scheduled to announce their plan to inject $40 million into Juniper to strengthen their hands against Cisco.

Why all the excitement? Juniper says it has a solution to congestion on the Internet. The company's products, slated for release early in 1998, promise to juggle data up to 100 times faster than today's speediest boxes. That convinced 3Com, Lucent Technologies, Ericsson, Siemens, Newbridge Networks, Northern Telecom, and Worldcom/UUNET Technologies to invest in the startup.

MORE SIZZLE. In return, the investors are able to license Juniper's technology. With Juniper's rocket-engine inside-phone switches from Lucent or Siemens, deployed on UUNET's network and added into 3Com's networking gear, it becomes a surround-and-conquer strategy. "We've got Cisco in a vise," says Eric A. Benhamou, 3Com Corp.'s chief executive officer.

Juniper, which was founded by engineers from Sun Microsystems, MCI Communications, and Cisco, is determined to be the next hot startup in the sizzling network field. It is run by CEO Scott Kriens, 40, who helped to found data-switch maker Stratacom. Juniper has raised $11 million in venture capital and $5 million in lease financing from such top-drawer investors as Institutional Venture Partners, Benchmark Capital, and Kleiner Perkins Caufield & Byers. Its new corporate partners add credibility--and important distribution channels. "They've got an all-star lineup," says Phil Lawlor, president of Internet provider Apex Global Information Services.

The technology is pretty snazzy, too. Thanks to custom chips designed specifically for Internet traffic, Juniper says that it eventually can hit speeds of up to a billion bits per second. Unlike other rival approaches to pumping up performance, Juniper uses traditional packet routing--a technology that some in the field had argued was running out of gas. "We represent a routing renaissance," says Kriens. Another Juniper innovation: faster gateways between the Internet's fiber-optic "backbone" systems and the electronics inside the router. Juniper also segregates traffic into different classes so an Internet service provider, for example, could bill at a higher rate for real-time video and less for E-mail.

NO FEARS. That's music to the ears of UUNET Technologies Inc., the world's largest Internet provider, which sees a doubling of demand for network capacity every three months. "We know that the next generation of products from Cisco and Ascend can't meet our needs in a year," says CEO John W. Sidgmore. UUNET is closely collaborating with Cisco and Ascend Communications on upcoming products, but just in case, "we're also betting on Juniper."

Cisco says that it's not worried about Juniper. Richard Palmer, director of marketing for Cisco's Internet service-provider division, says the company is delivering increased Internet speed with its new Gigabit Switch Router. Analysts assert that customers want more than speed: They need software, service, and support--Cisco's forte. "Nobody ever got fired for buying from Cisco," says analyst Mary Petrosky of market researcher Burton Group.

What's more, Juniper has plenty of rivals in the race for faster Net gear. A half-dozen other startups, including Pluris, Torrent Networking Technologies, Avici Systems, and Berkeley Networks, are pursuing the same opportunity. But "promises don't move packets," sniffs Kriens. He has promises of his own to deliver on. But with Juniper's impressive list of backers, those promises may now have more credibility.

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