Juniper Networks (JNPR) develops next generation routers for optical IP networks.

Kind of a mouthful? Sounds kind of boring, right?

But this is the material for incredible rates of returns.

Despite its fall-off yesterday (the result of the announcement of a secondary offering), Juniper is still hovering at a $9 billion market capitalization. Not bad for a company that had its IPO on June 24, 1999.

I call this explosion in market capitalization the "Juniper Effect." This, for example, happened to Cerent, a company that recently filed to go public.

Last week, Cisco Systems (CSCO) purchased the optical-networking company for $7 billion.

So, what's the next company to look for? Sycamore Networks, which recently filed its IPO.

The company was founded in February 1998 and by July 1999, landed its first -- and so far, only, customer: Williams Communications, a wholesale carrier (that is, it provides communications services to other carriers).

But right now, a customer base is not critical. Rather, the technology must be right; that is, it must make existing optical networks faster, reliable and scalable.

First, some background.

While much of the existing optical network in the US is built for voice data, the fact is that there is a huge surge in "data traffic," such as Net access, emails, videos, and e-commerce.

In fact, according to a study by RHK, bandwidth will need to soar 2000 percent from 1998 to 2002 to handle the huge amounts of data traffic.

Existing optical networks use a standard known as SONET. It is a complicated system that converts data traffic from electrical signals to optical signals, which are then transmitted across the fiber.

Sycamore Networks has a product, known as SN 6000, which offers a solution. In fact, it moves data without using SONET equipment and, instead, throws data directly into the optical network.

Also, since the technology is software-based, it is easier to customize or add new product features.

Moreover, the management team is also highly seasoned. Gururaj Deshpande, the Chairman, was the founder of Cascade Communications, which was purchased by Ascend (Lucent eventually purchased Ascend). Daniel Smith, the CEO, was the CEO of Cascade Communications.

The company also has Morgan Stanley as its underwriter.

However, the real concern may be that the company will not go public, but, like Cerent, get purchased.