Cisco Systems Inc. (Nasdaq: CSCO) expects to recapture market share in the core router market with its CRS-1 product, and the company sees growth in both the core and edge routing markets, said Cisco's routing chief today.

The CRS-1 core router is starting to build revenue, and Cisco expects growth in the edge routing and cable markets to remain between 15 and 20 percent, said Mike Volpi, senior vice president and general manager of Cisco's Routing Technology Group, on a conference call hosted by Lehman Brothers this afternoon (see Mike Volpi, Cisco Systems).

”We have a lot of customers trying it, and we have actually buying customers from MSOs to European PTTs and Japanese operators,” said Volpi of the CRS-1 (see Cisco Scores CRS-1 Customers, Cisco's CRS-1 Passes Our Test, and LR Best Product Finalists Revealed). “The product has gotten flying marks.”

The Cisco executive was questioned by Lehman Brothers analyst Tim Luke, as well as some of Lehman’s clients, about overall growth prospects for IP routing in the enterprise and carrier markets.

Volpi said the CRS-1 is now generating “millions” in revenue and is ahead of plan. He expects it to help Cisco see marketshare gains in the core router market by the fourth quarter of this year. Although Volpi said he could not talk about quarterly results, he left the impression that Cisco is seeing some financial benefit from the CRS-1.

Cisco sees more growth in the services edge routing markets, which it sees growing at 20 percent, than in the core service provider sector, where it expects growth at an annual rate of 15 percent, said Volpi. The biggest opportunities are coming in the cable television and wireless markets, where he thinks those providers that are shifting increasingly to IP video technology should boost IP routing technology.

Volpi took some shots at the competition, pointing to Juniper Networks Inc. (Nasdaq: JNPR) and Alcatel (NYSE: ALA; Paris: CGEP:PA) as the major competitors in the services edge market. Volpi said these vendors are offering products with inferior features and are competing primarily on cost.

"It’s hard to use a low-price strategy in a high-touch market," said Volpi. Of Alcatel’s products, he said: "They’re not very feature rich. They have had problems with some customers because promises haven’t been met.”

A spokesman for Alcatel denied that Alcatel had any problems with customer installations. “Our products are selling based on their own merit,” he said.

In the services edge routing market, Volpi said Juniper “hasn’t demonstrated a coherent strategy” with its J-series line of products and that they are an “inferior” product that cannot compete with Cisco's feature set.

"There might be a service provider that wants to stick to a single vendor, in which case they might buy an inferior product."

The mud-slinging is somewhat uncharacteristic of both Cisco and Volpi, as Cisco rarely makes comments about the competition. But the company has been getting a little more feisty lately (see Cisco Heckles Infranet Initiative).

A Juniper spokeswoman, when reached for comment, said Juniper was having success in the edge router market:

"What matters to Juniper is what our customers -- not Cisco -- think of our edge routers, such as the proven stability and reliability of the Junos software. Customers’ satisfaction is evidenced by worldwide market share in edge routers growing every quarter.”

Volpi did concede that there were competitive pressures in the market, and that Cisco might lose some market share. He said what’s important for the edge router market is for it to grow as a whole. He sees the biggest opportunity to be video in the MSO market, which is driving cable providers to move to IP architectures.</.p>”If you move video over IP, there’s a massive shift and a huge opportunity. The opportunity... is immense.”

— R. Scott Raynovich, US Editor, Light Reading