A recent uptick in IP routing activity in the carrier market has brought back questions about Cisco Systems Inc.'s (Nasdaq: CSCO) next-generation router strategy.

Unlike Juniper Networks Inc. (Nasdaq: JNPR), its chief competitor, Cisco hasn't announced its next-gen router strategy. Industry pundits have long assumed the company's pinning its hopes on a project referred to as the Huge Fast Router (HFR), a closely guarded multichassis platform that could be either imagined or real (see Cisco's Got a Terabit Router Too and Source: Cisco's HFR Tips the Scales). In the interim, competitors see a chance here to bypass Cisco and shore up high-end business, as carriers are preparing to revamp core networks.

This was demonstrated recently when Juniper won the routing portion of the large government GIG-BE project -- including the core routing piece, as Light Reading had reported in September. (See DISA Deal Is Done and GIG-BE Winners Named.) Then came Juniper's recent quarterly earnings announcement, which indicated that the carrier routing market could be heating up again (see Juniper Confidently Carries Q4).

Meanwhile, Nortel Networks Corp. (NYSE/Toronto: NT) and Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) are now working on a strategic partnership through which Nortel will resell Avici's routers in the carrier market (see Avici, Nortel Get 'Strategic').

Cisco says it won't comment on future product development or publicly acknowledge the HFR's existence, and officials continue to say they don't see an immediate need to offer a multichassis router. It appears that the company is following the tried-and-true incumbent strategy of moving slowly and carefully on new product upgrades for its large installed base.

"People will wait for Cisco," says Debra Mielke, a principal at consulting firm Treillage Network Strategies Inc. "If I were a carrier, I'd wait rather than spend a gajillion dollars retraining people."

Indeed, the introduction of a new vendor's routers into a network incurs costs for testing and training. With profitability being a top concern, few carriers will accept those costs just for the sake of glitzy technology.

Analyst Erik Suppiger of Pacific Growth Equities Inc. is less convinced, noting that customers are getting antsy to see a next-generation road map out of Cisco. Still, he agrees Cisco can afford to lag competitors. "Cisco is not necessarily the first to deliver on next-generation products, but they do it in a timely enough manner," he says.Others believe it's about time Cisco made its strategy and product roadmap clear.

"There is going to be this upgrade cycle of the core over the next couple of years, so it's important to have something in there," says Kevin Mitchell, analyst with Infonetics Research Inc.

Cisco can expect more pressure. Within months, Juniper is expected to announce its own multichassis platform based on the TX, an optical switch linking up to eight of the company's T640 high-end routers. Meanwhile, Juniper continues bolstering the T640's position, adding wins in KT Corp. and Deutsche Telekom AG (NYSE: DT) networks (see Juniper Goes Terabit With the T640, KT Uses More Juniper, and Siemens, Juniper Upgrade T-Com).

HFR customers were reportedly in the software-evaluation stage last fall, so a new Cisco system might not be ready for launch until 2005, Mitchell says.

That leaves the aging 12000 series of core routers as Cisco's only weapon against the TX or Avici's TSR. Next to the others, the 12000 doesn't provide that "next-generation" kind of feeling. Take interface density, for example. Critics point out that Cisco's highest-end box, the 12816 announced in December, offers only two OC192 ports per slot. The four-port per shelf version isn't available yet. The T640, by contrast, was announced in 2002 with four OC192 ports per slot, and Avici has long said it supports four OC192s per slot.

Here's how the companies' high-end offerings stack up:

Table 1: High-End Routers

(Switching capacities are listed without using Cisco's "doubling up" method. Cisco counts both incoming and outgoing traffic, producing switching-capacity figures that are twice as large as other vendors'. The HFR is reported to have 11.35-Tbit/s switching capacity; it seems likely that figure is doubled, meaning the HFR is closer to Avici's 5.6-Tbit/s level.)

So should Cisco hit the panic button? Mitchell doesn't think so, even if the HFR doesn't surface this year. For starters, the company's market share in core routers remains high, as Cisco took 72 percent of the $351.4 million core router market for the third quarter of 2003, by Infonetics' reckoning. "Until that's slanting down due to competition, [the HFR delay] is nothing to worry about," he says.

— Craig Matsumoto, Senior Editor, Light Reading