10-22-2017, 01:15 PM
Applied Opto wasn't the only company to receive headwinds from Amazon's datacenter business in Q3:
Cowen & Co. analyst Paul Silverstein said in research note that cloud customers have driven Juniper's results for the last 18 months. Silverstein said Amazon likely cut spending with Juniper given the size of the revenue miss. Amazon was Juniper's largest cloud customer followed by Facebook, said Silverstein. If other cloud customers like Apple and Google cut spending the outlook may be worse for Juniper in the future. "we suspect that the issue is not purely 'transitory,'" he said. William Blair analyst Dmitry Netis said that Juniper was benefiting because cloud providers were building out networks to bypass carriers. By building out their own internet backbone, cloud players can deliver content and services to consumers and enterprises more efficiently. "Our recent industry surveys reflect material slowdown (and potential digestion) of IP backbone build out with a couple of these cloud operators this quarter," said Netis, who noted that the spending pause may cover multiple cloud customers such as Google, Facebook, Apple, and Amazon.
Cloud giants hit pause on Internet backbone spending, Juniper's Q3 suffers | ZDNet