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An Update: Juniper’s Mistification Almost Complete

9/24/2020

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We attended a well-organized and information-packed virtual conference hosted by Juniper Networks last week.  While there were many themes (400G, telco cloud, AI, Mist), the one that really came through was how much the Mist acquisition has reinvigorated the Juniper organization.  About a year ago, Juniper made its acquisition of the Wi-Fi startup. It is clear a year later that Juniper’s Enterprise strategy has been “Mistified.”  We will share some Mist statistics from conference and our thoughts, as well.
Juniper shared some milestones that now characterize the Juniper Enterprise group:
  • 4 of the Fortune 10 are Mist Wi-Fi customers
  • 3 of the Fortune 10 are AI customers for wired as well as wireless
  • By 4Q20, Juniper will make its SD-WAN products assured by Mist AI, thereby completing the single-pane managed system that will include Wi-Fi, Ethernet Switches, Security and SD-WAN.  In slightly over a year, the AI operations system (AIops) from Mist will support the Enterprise products that Juniper had in house prior to the merger.
  • Since January 2019  through last month, the Mist AI system has improved to the point where Marvis, the company’s Virtual Network Assistant, can resolve 80% of customer inquiries, compared to 20% in January 2019.

We asked the company what has worked well with the acquisition, including whether the deal structure may have contributed towards to its success.  Juniper executives explained that there was nothing special about how the acquisition was structured beyond the normal incentives for the acquired team.  What happened after the acquisition, though, is somewhat unique:  in effect, the Enterprise group at Juniper was subject to a reverse merger with Mist, whereby the Mist management team now leads the group.  Perhaps the fact that the Mist team is in charge of the show explains the rapid integration of the existing Juniper products into the Mist AI management system.  Perhaps, also, the integration went well was because the Juniper products (switches, SD-WAN and Security) were designed to collect and easily share telemetry data for use by the Mist AI system.

Juniper also featured a customer – whose name we cannot share – that is a major fast food chain across the US.  It currently has 10,000 Wi-Fi Access Points with another vendor and recently made the decision to replace them with Mist Wi-Fi 6 APs by the end of 2022.  We found it interesting how important support is for IoT and the increased importance of outdoor Wi-Fi during the pandemic.  The company is deploying four indoor APs and three outdoor APs per restaurant.  The customer spokesperson shared that Mist does AI-based, dynamic radio resource management (RRM) very well and he shared numerous screenshots showing power levels that were kept around 11-13 dBm instead of values he recalls seeing closer to 20 on the existing infrastructure.  At this point, the customer has installed Mist APs in over 50 restaurants and he says he has not had a single Wi-Fi-related trouble ticket from these locations.  He is also looking to implement location services in the future with the company’s vBLE technology.
The company’s cloud-based location analytics capability is designed to serve as a contact tracing and crowd management system to allow Juniper WLAN customers to reduce risks as employees and visitors go to the campus environment.  The company introduced this contact tracing capability in May 2020.  The company said its cloud-based contact tracing service is something that can operate on top of Juniper infrastructure, as well as its competitors.  The company shared details about a large elite US university that is using the service and decided to upgrade to Juniper WLAN infrastructure as well.
​
Our view is that Juniper is well-positioned in the Enterprise market because by year-end it will have an AI-driven, single-pane operations system that covers Wi-Fi, Ethernet Switching, Security and SD-WAN.  This is an enviable position because increasingly customers are making purchasing decisions for various equipment at the same time, and they are looking to reduce ongoing operational costs.  By managing a system with a single-pane, customers can correlate customer experience, application responses and network issues in an integrated system, and pinpoint corrective action.  This is not to say that Juniper has an exclusive on single-pane managed systems covering all these network systems – Cisco, Fortinet and others lay claim in the same.  Juniper is in good company. ​
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Juniper Networks - Reinvigorating the Enterprise

9/11/2019

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Juniper held its industry analyst day last week to present its strategy update to the market; the company wants to change networking for the cloud era.  The company reiterated its commitment to three customer types: cloud provider, service provider, and enterprise.  The company is making investments to take advantage of multiple technologies:  400 Gbps, 5G, Multi-cloud, segment routing across its portfolio for multiple IPv4 and IPv6 use cases; artificial intelligence (AI); and security.  An underlying theme for Juniper’s enterprise strategy is its AI-focus that comes with its Mist acquisition, a WLAN company; the company is transferring this AI technology to its wireline products in the coming quarters.  We cannot emphasize enough how big the opportunity is for Juniper in the enterprise market.  The company has taken on a big task by extending the Mist AI engine to other parts of the portfolio, starting with the campus and branch switching and routing products, but we expect customers will see the value of automation and intelligence throughout the enterprise product line.
Picture
The company highlighted several key points of differentiation:
• A cloud-optimized, Linux based version of Junos is available for certain data center use cases 
  • Silicon photonics Aurrion optics will be available starting in the 400 Gbps optical era 
  • Contrail Networking is deployed widely (in ~50 Tier 1 and 2 service providers) for its automation and SD-WAN cloud-native capabilities
  • The most recent in-house developed semiconductors supporting 400 Gbps: Triton (for PTX routers and QFX switches) & Penta (for MX routers)
  • AI Artificial Intelligence including its Marvis system will be used to simplify operations, first for WLAN, and then it will be made available through its enterprise wired products

Enterprise. To emphasize its re-invigorated focus on enterprise, the company highlighted its recently closed acquisition of Mist Systems, an AI and WLAN vendor, which bolsters its enterprise product breadth.  Now Juniper has a wide product portfolio: WLAN, switching, SD-WAN, routing, and security.

Service Provider.  The company is showing good growth in its cloud-delivered SD-WAN offering. The company supports segment routing across its portfolio for multiple IPv4 and IPv6 use caseswhich it believes will allow it to serve 5G needs of operators. Contrail system Networking has been deployed widely to control and manage virtualized infrastructure EPC, IMS, and combined control plane systems at operators. Juniper continues to invest in high performance routing as evidenced by its strong position in the emerging 400Gbps market.

Cloud.  Juniper expects that in the 400 Gbps era, it can take market share in Tier 1 hyperscaler switching because it has addressed some deficiencies it had not delivered in the 100 Gbps era. This includes support for SONIC, P4, Stratum, and other private APIs.  It expects to ship the PTX 10008/16, with 14.4 Tbps per slot, by year-end 2019.  Juniper is also disaggregating Junos to meet cloud operators’ flexible consumption models and cloud-optimized architectures.

Business Model.  The company expects that by the year 2021, it will get 16% of its revenues from software.  It revealed that recently, it was at 10%.  

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Cambium acquires Xirrus, further consolidating the Enterprise Wireless LAN market

8/12/2019

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On August 8, 2019, publicly-traded Cambium announced that it had completed the acquisition of the Xirrus products and cloud services from privately-held Riverbed Technology, Inc.  Xirrus has been a vendor in the Enterprise WLAN market for a while now and has been associated with its high-performance enterprise-class WLAN products as well as its cloud-managed services.  In our research, we find Xirrus has done well in the large venues, the education, government, and retail markets.

We interviewed the team at Cambium today and learned that the company is committed to using channels as a distribution strategy for the combined portfolio.  Additionally, the team told us it will be supporting both Cambium WLAN customers as well as Xirrus customers, and that, over time, the products and services will be converged.  We think it makes sense to rationalize the products, which will allow future customers to take advantage of developments made at each of the organizations.  The team explained that Cambium will be focusing primarily on medium and small-sized customers and that it will not be pursuing large enterprises associated with the Fortune 1000, instance.

The timing of Cambium’s acquisition makes sense on several counts.  First, it just completed its Initial Public Offering and is more well-capitalized than when it was a privately-held company. Second, during its IPO, Cambium identified that it expects its exposure to the enterprise market is key to its growth, so getting more exposure here will increase it further.  Third, several other companies have acquired enterprise WLAN vendors, and Cambium is part of this greater trend.  For instance, Arista Networks completed its acquisition of Mojo Networks in late 2018 and Juniper Networks closed its acquisition of Mist Systems at the end of 1Q19.
​
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Juniper announces plan to Acquire WLAN Vendor, Mist Systems

3/4/2019

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Juniper Networks announced plans to acquire Mist Systems for approximately $405M in cash.  We think this deal makes sense for Juniper, who can now sell a key technology - WLAN - into its customer base of large and medium enterprises.  Valuation of the deal probably fell a bit short of the expectations of some, but the vendor landscape has already seen significant consolidation between Ethernet Switch and Enterprise-class WLAN vendors, with now just a few potential buyers and sellers.

The companies just had a call to discuss the announcement and share the following messages:
  • Slightly dilutive to non gaap F19, accretive F20. 
  • Verticals discussed on the call: h/c, retail, mfg and distribution segments
  • Key wins discussed:  Large healthcare organization, Verizon Mgd SP, Walt Disney Orlando, Dartmouth College
  • Business model will remain as current (60% hardware; 40% services at time of acquisition)
  • No revenue numbers share
  • $405M in cash; closes F2Q for JNPR
  • Avoided saying who Mist competes with, other than to say Mist sees “the usual suspects”
  • Mist should continue to grow because its channels will expand when Juniper acquires it
  • Juniper will expand the “AI for IT” technology from Mist across the Juniper portfolio of campus switch, security and SD-WAN
  • Will imminently begin 802.11ax pilots
  • Last time new technology was developed for WLAN industry was over a decade ago; Mist is microservices / container based; all new
  • Juniper has seen its campus switch business grow in recent times
  • Will share more numbers in the future
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Wi-Fi NOW Conference: Mojo, Mist, Google, Quantenna

5/17/2018

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We attended the Wi-Fi NOW conference in Redwood City, CA this week and attended some interesting presentations.  We are writing about our observations and notes from the Google, Quantenna, Mist Systems and Mojo Networks presentations.  
Google Station presentation.  "GOOGLE STATION: PUBLIC WI-FI TO CONNECT THE NEXT BILLION INTERNET USERS."  Monica Garde and Erika Wool made an interesting presentation.  The jist of the presentation, from our viewpoint, is that Google is partnering with service providers and enabling these service providers to monetize the Wi-Fi network through a revenue sharing system that is based primarily upon advertising.  The company shared some statistics, which we have in the accompanying slide.

Quantenna presentation.  
James Chen, VP Product Line Management presented "GREAT INNOVATIONS PART ONE: MASSIVE MIMO & DUAL-BAND 802.11AX".  Chen made the the case that 8x8 WiFi (that Quantenna calls Massive MIMO) outperforms 4x4 systems.  For instance, in its tests, at 85 RSSI and through a wall, performance was 1.6x greater using 8x8 compared to 4x4.  The company also made the case that Massive MIMO has greater throughput compared to non Massive MIMO, as well; the company has demonstrated >1 Gbps throughput in a typical home.  The company showed that Massive MIMO alleviates the "Sticky Client" using a 1x1 Samsung Galaxy Tab Active2 device.  The company did not talk about 802.11ax, unfortunately, other than to say that 8x8 is relevant for 802.11ax, as well.

Mojo Networks presentation.  Mojo CEO Rick Wilmer made the point that simply enabling Cloud-managed Wi-Fi has been done already, implying this is cloud 1.0, and that this message is boring.  The company explained that its cloud architecture is cloud 2.0 because it takes advantage of the capabilities in the cloud and enables - Cognitive Wi-Fi.  Cognitive Wi-Fi, as far as Mojo is concerned, has to do with big data (store key client parameters and run ML algorithms) and smart edge APs.  The company didn't go into deep science of ML/AI, but explained the ML workflow: 1-data collection, 2-training the classifier model, 3-trained model in action, 4-result.  

Mojo explained that it has lots of data to perform Machine Learning on.  It has 1/2M APs deployed.  The company shared that using 1 week of data of a subset across only 4 verticals (enterprise, education, mfg, retail & hospitality): 237K clients, 31M associations, 400+ applications.  Separately, the company said it has obtains 50M associations per week (in a press release).  A significant amount of the data that is delivered to the cloud has been pre-processed in the Mojo APs; the APs cache 2 days of data.  The point of these statistics, according to Mojo, is that it has more data than other Wi-Fi vendors to train its Machine Learning system on.  

According to Mojo, using inference engine, automatically fixes everything possible.  Wilmer says that this makes interacting with the User Interface less necessary because it takes care of problems automatically.  Was Mojo serious or joking when it said, "the UI may disappear as we know it."  Time will tell.

The company shared some other information that was interesting:
  • 130K APs deployed at a single customers - a very large customer.  Very scalable.
  • Many Mojo customers are decomissioning their EThernet infrastructure (including cables) in lieu of using Wi-Fi from Mojo. 
  • Mojo deploys 'a lot' of 3 radio APs.  With third radio, a listening radio, it watches RF environment and does wireless intrusion scanning.  Every 5 seconds, it feeds critical information to the ML environment.  So, if users physically move, the AI system can make adjustments to the system so there are fewer performance issues.  The third radio can also be used as a client, to simulate performance.  This client capability can run the specific application that will used in an environment and simulate whether the Wi-Fi will perform adequately before an event (like a test at a university, for instance).
  • Open Standards.  Believe all APs from all vendors should interoperate like light bulbs.  That would accelerate the Wi-Fi market.  Wilmer highlighted that the OCP event, earlier this year, Mojo 'lit up' the entire trade show floor with non Mojo APs using the Mojo system.
  • Mojo will announce AP providers soon that are not Mojo APs that you can plug.  No margin stack from an OEM, purchased directly from an Asian ODM.  

Mist Systems.  Bob Friday, of Mist made a presentation on May 17, 2018.  In addition to the content from his presentation, I interviewed other at Mist personnel at the show.  The company claims it is focusing and having success in selling to large enterprises.  We learned that Mist uses Broadcom WiFi chips and has a custom-designed Bluetooth antennae array (shown at the show).  The company highlights its location services as a unique capability, and it draws upon its Bluetooth capabilities to deliver location.  However, the company's main message is its AI capabilities; in some ways, it has become the poster-child for AI amongst startups in the networking industry.  Mist's presentation at the show reiterated the same point - that it is an AI company.  

Stepping back, Mist has been shipping commercially for a year now.  In our observation and research, the company's efforts to take share from competitors has landed it on the map - over the past two quarters, its larger competitors have taken notice of Mist and see it competing at large enterprise accounts.  

During the Q&A part of the presentation by Bob Friday, Mist CTO and founder was asked something that we found very interesting; the question was what kinds of algorithms does Mist use in its system, and do they all need to learn?  The answer was to the effect that many different types of algorithms are used, linear optimization, decision tree analytics, neural networks, etc.  Friday made the case that there are just certain things you just know about how a WiFi network will and should work, so why go an have a machine learn about it when you already know it.  This begs the question - how necessary is AI in the first place, especially if the vendor and its IT workers or VARs have gobs of experience and can design and implement a Wi-Fi network right in the first place.  Looking at the problem differently, what this means is that some vendors may have had different backgrounds than competitors and can design Wi-Fi systems that know how to work under a variety of working conditions.  Friday was also asked another question - given that Mist is focusing so much on AI, does this mean that far fewer IT workers will become employed?  Bob's answer was diplomatic, but probably true - he said that no, we'll need the same number of workers in the near-term, and that AI Wi-Fi will simply allow the same number of IT workers to make better decisions.  Still, the question makes it clear - the audience is concerned about job loss as AI works its way into the IT industry.



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    CHRIS DePUY
    &
    Alan weckel

    Technology Analysts

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