Carriers seeking an edge from their router vendors
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The age of the universal router is over. In its place, highly specialized terabit core routers and edge/access routers are emerging.
As ISPs scale backbone networks to optical rates, a new generation of core routing devices is required to provide the necessary combination of optical rate forwarding and sophisticated traffic engineering tools.
However, while much industry effort has centered on solving the Internet backbone problem, little attention has been paid to the problem of access. As business customers continue to embrace the Internet, ISPs will seek new ways to deploy ports more economically at higher speeds and in greater densities. In turn, network equipment suppliers will be pressed to deliver high-speed, IP packet-switching devices that concentrate hundreds of customers onto SONET links with wire-speed efficiency and quality of service (QoS).
Sophisticated IP QoS capabilities, breakthrough density levels, low power consumption and wire-speed performance will characterize next-generation edge routers. They will have less stringent forwarding requirements than their core counterparts but will demand exceptional flexibility.
The importance of the edge segment is illustrated in a recently published report from investment analysts at Warburg Dillon Read LLC. The report estimates that the sale of routers to service providers is growing at least 30% year over year and comprises about 10% of Cisco's total sales. However, the core router portion of these sales is still a relatively small market. There are greater revenue opportunities on the edge of the service provider network than in the core.
Cisco is clearly the leader in the overall carrier router market today. The company has made an enormous investment in the core segment with the development of its 12000 series. The strategy was necessary to establish market leadership in an emerging market while locking out start-ups such as Juniper, Avici, Argon, IronBridge, Netcore, Nexabit and Pluris.
At the same time, Cisco has made minimal investment in the edge segment of the market. Today, the router giant finds itself precariously behind the technology curve in edge aggregation with its 7500 series. The product, which has its origins in the AGS+ first introduced in 1992, is a pure software router based on Reduced Instruction Set Computing processors. As such, it lacks the performance and scalability required to meet the edge aggregation needs of new IP optimized carriers.
With the introduction of the 12000 series, Cisco has attempted to reposition the 7500 series out to the edge for customer aggregation. This fits with the conventional wisdom that today's high-performance routers can become tomorrow's edge routers. But, unlike a television, a router in the family room cannot be moved to the bedroom when you buy a new model with a bigger screen. The new public network brings with it requirements at the edge that simply cannot be met with generic technology.
In the edge market, there appears to be less of a competitive glut for next-generation products. Bay Networks (now part of Nortel) has announced its Versalar 15000 IP Access Switch. In addition, start-up Redstone Communications has announced its intent to deliver a product into this segment before year-end.
Ironically, it appears that Cisco has plenty of competition in the core router segment, which is a smaller part of its overall router business. The relatively unclaimed edge segment should provide ample opportunity for start-ups offering innovative new products.
