One of the best indicators of the significance of a product announcement is the amount of attention it gets from competitors. Al though it's too early to gauge the impact of the recently announced next-generation router from Cisco Systems, the competition seems to have plenty to say about the routing giant's latest offering.
"Competition is good," says Mukesh Chatter, founder of Nexabit Networks (www.nexabit.com), the super router start-up purchased last summer by Lucent Technologies (www.lucent.com). "Let them come in and play ball. We are happy to have them."
From Chatter's perspective, Cisco (www.cisco.com) is playing catch-up to Lucent, which last year introduced a router that exceeds or equals Cisco's latest product in terms of raw capacity and the speed of individual interface cards. Both the Cisco GSR 12016 and the Nexabit NX64000 router are capable of moving data in bandwidth chunks as large as OC-192 (10 gigabits per second).
But Chatter says Lucent is set to up the ante this year, with the introduction of a 40-Gbps (OC-768) interface.
Despite their potential technological advantages, companies like Lucent, Nortel Networks and a number of start-ups in the high end of the router market could see their fortunes slip with Cisco's entry into the so-called terabit router market. The GSR 12016 still trails some of the competition in terms of capacity and expandability, and other vendors have a head start, but the Cisco box represents an attractive upgrade option to the hundreds of service providers that have previous versions of the GSR family.
"It looks like a strong offering from Cisco," says Joe Skorupa, an analyst with Ryan Hankin Kent (www.rhk.com). "It offers software and a command-line interface that customers are familiar and comfortable with."
Still, the arrival of Cisco's next-generation router does not portend doomsday for the challengers to Cisco's throne, Skorupa adds.
"All service providers want at least two vendors available to them for pricing reasons and an insurance policy," says Skorupa. "They want to make sure if someone has a hiccup in their development, they are covered."
The competition, however, is not ready to settle for second-class status.
"As we said all along, we always assumed Cisco would have a product in this space," says Pete Chadwick, vice president of business development of Avici Systems, a terabit router maker set to announce an initial public offering sometime this year. "We also assumed that Cisco has briefed most of the service providers that are actively en gaged in evaluating our product. Those people are still talking to us."
This month, Avici (www.avici.com) scored a significant coup on the customer front, when Enron Communications (www.enron.com) said it would deploy Avici's terabit switch router in its Internet Protocol backbone network, although details about that deployment are hazy right now. Enron also is taking an equity stake in Avici.
Avici also hopes to take advantage of its time-to-market lead. Cisco is not expected to deliver an expandable switch fabric, which is key to the product's scalability, until next year.
Officials at Pluris, another terabit-class start-up that is planning to finalize its first product near the middle of next year, view the Cisco announcement as validation of its product plans. "It validates our scalability approach," says Joe Kennedy, president and chief executive at Pluris (www.pluris.com). "In some ways it makes our story stronger."
Echoing officials at networking equipment rival Lucent, executives at Nortel Networks (www.nortelnetworks.com) characterize Cisco's new router as lacking a sophisticated optical networking component. Nortel last June introduced its high-speed backbone router, Versalar Switch Router 25000, part of a product suite that ties together the company's packet-based and optical networking equipment.
"The key requirement for next-generation networks will be tight interworking between optical and packet equipment," says Arun Jain, director of marketing for carrier router products at Nortel. "Within that space, the leader is Nortel Networks."
Officials from Cisco counter the criticism by pointing to its recent acquisition of Monterey Networks, which makes an optical switch that Cisco plans to unify into the same operating system that controls its routers.
While both sides make compelling arguments, analysts say the long-awaited delivery of Cisco's next-generation gear is sure to spur purchasing activity among service providers. As the market leader in both the enterprise and service provider markets, Cisco often puts a freeze on the upgrade plans of its customers, which tend to hold off on purchasing alternative gear until they see what Cisco has to offer.
|Supplier||Product||Date Announced||Current Status|
|> Avici Systems||Terabit Switch Router||May 1999||Available commercially|
|> Cisco Systems||GSR 12016||December 1999||In trials; expected to ship|
|second half 2000|
|> Lucent Technologies||Nexabit NX64000||March 1998||Available commercially|
|> Nortel Networks||Versalar Switch||June 1999||In trials: expected to|
|Router 25000||ship mid-2000|
|> Pluris||Pluris 20000 series||May 1999||In trials; expected to|
|terabit network router||ship second half 2000|