The head of Juniper Networks said Monday that sales of communications network equipment to corporate customers have been doing well, despite a weaker economy and tough competition from bigger rival Cisco Systems.

Juniper makes most of its revenue from selling high-performance routers to telecommunications service providers, but earlier this year it launched Ethernet switches aimed at corporate customers, going head to head with Cisco.

"The business has been growing and doing quite well over the past year," Juniper Chief Executive Scott Kriens told Reuters in an interview when asked about sales to enterprise customers.

Ethernet switches are used to direct traffic on corporate data networks. With analysts estimating the market to be worth somewhere between $17 billion to nearly $20 billion, it is seen as a lucrative market for Juniper to tap, but many also say Cisco's dominance will be tough to break.

Kriens said the EX-series of switches, unveiled in late January, had met "encouraging reception", although he declined to elaborate on specific sales results.

He also said data shows the Sunnyvale, California-based company was gaining market share from Cisco in service provider routing.

Despite its expansion into the enterprise market, however, Kriens said Juniper would continue to focus on customers requiring high-performance network equipment rather than selling a broad range of network equipment to a wide range of customers.

Analysts have said that strategy may be helping to shield the company from impact of slowing U.S. business activity and rising energy prices.

ECONOMY NOT GETTING BETTER

The price of oil has gained over 40% this year, driven partly by tension over Iran's nuclear program and expectations that global supply will fail to keep pace with demand from fast-growing Asian economies such as China.

Kriens said economic conditions were not improving, with oil prices rising and consumer uncertainty growing, but declined to comment on their impact on Juniper.

"Numerically, it's certainly not getting better yet," he said, adding that he could provide more details after the company announces its quarterly business results on July 24.

Kriens said the company was in a good position to respond to demands for more energy-efficient network equipment.

Telecoms carriers and firms with large data centers are grappling with increased Internet traffic, mainly due to the popularity of online video applications, and many are looking for ways to limit their data center electricity bills.

Verizon Communications VZ.N has said it wants to see energy cost savings of around 20% from its equipment vendors, starting next January.

Space and energy efficiency has been among the main selling points of Juniper's recent product launches, and Kriens said the company would seek to further improve the designs of future products.

He said a crucial aspect of energy efficient design was to improve "density" of a specific product, combining various capabilities into a smaller-size product that would require less power to run as well as cool.

"It is an engineering fact that energy efficiency must be designed from the outset," he said. "It's not possible to retrofit energy efficiency into a product." (Editing by Leslie Gevirtz and Gunna Dickson)

Source:reuters