Just six weeks after taking the helm at Juniper Networks, CEO Shaygan Kheradpir is beginning to put a new stamp on the company. But is it his alone? Many wonder.
On Thursday, the networking company unveiled an integrated operating plan (IOP) to “refocus the company on innovation that matters most to service providers and enterprises where demand for High-IQ Networks and best-in-class cloud environments are driving growth." The latter is straight from a company release that highlights its bold, new agenda.
Among other things, the new plan includes cost-saving measures that are expected to increase operating margins to 25 percent by 2015; a $2 billion share repurchase program; and a new, 10-cent per-share quarterly dividend that will begin in the third quarter. The new plan also calls for the nomination of two, independent directors to join the company’s board.
"The cornerstone of our IOP is the belief that our customers, which include some of the world's largest service providers, financial services companies and government agencies, are increasingly building hyper-scale, resilient, secure, highly intelligent, open and virtualized networks," said Kheradpir. "As a pure-play, high-performance networking company with engineering and organic innovation at its core, I believe Juniper is uniquely positioned to help these customers address their rapidly evolving networking needs. Our new, sharpened focus will bring us closer to our customers as we innovate together to address the opportunities ahead, and will enable us to operate much more efficiently as One-Juniper."
While appearing solidly behind the new IOP, it’s clear from industry reports that some of the changes were being suggested-if-not-driven by outside forces. Over the past year, activist shareholders have pressed for many of the changes now being implemented.
Said The Wall Street Journal, “The steps taken by Juniper satisfied its largest activist investor, Elliott Management Corp., which reached an agreement to vote for the board in exchange for Thursday's steps. That agreement, which would keep Elliott from engaging in a proxy fight, followed weeks of conversations with the company."
Over the past year, shareholders have expressed dismay with the way the company was run when Chairman and former CEO Kevin Johnson was at the helm. This is despite the fact Johnson helped delivered revenue growth of 7 percent in fiscal 2013 in an otherwise very difficult year. (In light of the new IOP, Johnson has agreed to step down as chairman of the board at the end of February.)
Under the new IOP, the company will focus its engineering and sales operations around cloud and “High-IQ" networking opportunities. What this means from a product standpoint remains to be seen. But Kheradpir, the former chief operations and technology officer at Barclays PLC and the former CIO and CTO at Verizon Communications, has previously expressed that Juniper will continue – if not increase – its reliance on partners.