Core gets more
Caspian lands a whopping $120 million for expected buildout.
 
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Looks like the core router market is about to pick up steam.
Caspian Networks last week announced that it has secured a whopping $120 million in additional funding to develop, test and market its Apeiro IP Superswitch for the Internet core. This windfall comes on the heels of terabit router vendor Pluris' announcement last week of an additional $53 million in funding.
The vendors and their investors are anticipating demand building up soon for their products, which will compete with Internet core routers from Cisco and Juniper Networks, the two vendors that own 98% of the core router market. Pluris believes this demand will start to build in the second half of this year, and Caspian expects trials to evolve into production deployments this year as well.
"Our product is exceeding expectations in lab trials," says Caspian President and CEO Bill Sickler. "This investment is expected to see us through product introduction in customer networks this year."
Despite sharply reduced spending by carriers, they'll be forced to purchase new core routers because their networks are bursting at the seams, analysts say.
"We do not expect the core Internet router market to be as impacted by carrier capex reductions as other sectors," says Stephen Kamman, executive director of Networking & Internet Infrastructure at investment firm CIBC World Markets. "This is one telecom equipment category that should actually experience a significant upswing over the next several years. We believe several major carriers will likely begin major network upgrades in mid-2002."
Caspian expects this new round of funding, its fourth, to be the company's final private round. It was co-led by existing investors U.S. Venture Partners, New Enterprise Associates and Merrill Lynch, and new investors Morgenthaler and Oak Investment Partners.
Total investment in Caspian, which started operations three years ago, now exceeds a quarter of a billion dollars.
Juniper at least, is not taking the potential threat lying down. The company is also developing its next-generation core router, which is expected to debut in the third quarter.
Cisco, meanwhile, says its sights are squarely set on metro IP right now. The company deftly deflected questions regarding its next-generation core strategy.
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