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Alcatel Redraws Router Strategy

Light Reading
News Analysis
Light Reading
9/29/2003

Alcatel SA (NYSE: ALA; Paris: CGEP:PA) officials confirmed today that the company has ceased development of its 7770 Optical Broadband Exchange (OBX) core IP router. It will now focus its research and development efforts on a new set of routers it acquired from startup TiMetra.

"We will not continue to develop any further extensions for the 7770," says Tim Krause, vice president of marketing for the fixed communication group, which includes solutions in data, optical transport, broadband access, and next-generation switching to carriers. "We aren't cancelling the product line, but the roadmap for further development has been stopped." No formal announcement has been issued from Alcatel on the change in strategy, but last week an executive from the company let it slip during a briefing with analysts and investors in New York. Stephen Kamman, an analyst with CIBC World Markets, published a research note on the news.

On Friday, a spokesperson denied the shift in strategy. But today, in an interview with Light Reading, Krause confirmed the changes.

He says that after the acquisition of TiMetra this summer, Alcatel decided to scrap further development of the 7770, concentrating future efforts on the existing TiMetra product line (see Alcatel & TiMetra Seal the Deal). The TiMetra platform, which has been re-branded the 7750 Service Router (SR), is specifically engineered to deliver IP services like Layer 2 and Layer 3 virtual private networks (VPNs) over an IP/MPLS backbone (see TiMetra Shoots for Service Edge).

“When you bring in a new technology stream, the existing road map has to be adapted and changed,” Krause says. “From the beginning, we said we would be taking advantage of the new technology and expertise that came from TiMetra.”

While the 7750 is clearly targeted for the edge of a service provider network, Krause claims that the change in strategy does not mean the company is abandoning the core IP router market. He says that the company plans to enhance the 7750 with features from the 7770, including nonstop routing, which improves IP reliability, and IPv6 (see IP Routing Gets a Restart).

Krause says the company will continue to support the installed base of 7770 OBX core routers, which includes deployments at China Netcom Corp. Ltd., and a number of research networks in Europe including ATRIUM, a pan-European network, BELNET, the Belgian national research network, and CERN, the European Organization for Nuclear Research. He also denies that the company is actively looking to acquire a core IP routing company to fill any sort of product hole.

Adapting the 7750 into a core router may not be too difficult. The largest box in the series, previously known as the SR-12, offers 10 usable slots with 200 Gbit/s worth of capacity in one third of a telecom rack. The platform is also designed to be programmable, so Krause says that Alcatel will be able to add the necessary features to the box.

It’s difficult to say whether this strategy will actually work. The company has already spent a lot of time and money developing and promoting the 7770 OBX (see Alcatel Bids for IP Core). To a certain degree, it has been successful. According to a recent report from Heavy Reading, Light Reading’s market research arm, the company scored high in terms of market recognition in a recent carrier survey (see Core Blimey! ).

But actual market share figures tell a different story. According to Infonetics Research Inc., the 7770 has consistently accounted for only about 1 percent of the total core router market for the past several quarters. In the second quarter of 2003, it improved its ranking by 1 percent point, bringing it up to 2 percent of the total market. Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) still dominate, with a combined market share over 94 percent, says Infonetics.

Krause explains that the IP services market is first developing at the edge, which explains the company’s focus there. Kevin Mitchell, an analyst with Infonetics, agrees that the company has a better chance of cracking the edge router market. The company has already started winning some business with the products. Masergy Communications Inc. announced back in June that it was using the TiMetra gear to roll out its Layer 2 Ehternet-based VPLS service (see Masergy Launches VPLS Service).

“The addressable market at the edge is bigger than the core right now,” Mitchell says. “And it’s also where a lot of the innovation is happening. Other companies are finding success here and it’s crowded, but it might be a better opportunity right now.”

— Marguerite Reardon, Senior Editor, Light Reading

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fw23
fw23
12/4/2012 | 11:22:45 PM
re: Alcatel Redraws Router Strategy
This is great news for Procket! One more
pretender gone down for the count!

Alcatel finally gave up on the 7770 because
nearly every potential customer turned it down.
They think that Timetra will save them, but
they are entering the edge late and not having
a core router will hurt them in many deals.

Timera has a great system, but a core router
(or even an IP edge router) isn't a great fit.
But the services stuff could be huge $$$$ in
a new piece of that market pie.

The 7770 project was doomed from the start by
european politics and a dont-care attitude on
the part of the people in charge of the project.

I wish any survivors of it well. I'm sure
(unlike americans) your jobs are safe at alcatel
and there will be another new project soon.

R.I.P Xantium, you could have been a winner if
they had only been willing to listen.

I guess that shows why there is Tony Li

and why there are wannabees who can't make it
in the core.

Juniper is finished. They are losing money
and nobody even knows who they are!!!!!
All Procket has to do now is put their marketing
muscle to work and the big win will be all theirs.
And with that a**hole CEO out of the way,
Procket is headed for big things.
alcabash
alcabash
12/4/2012 | 11:22:45 PM
re: Alcatel Redraws Router Strategy
What a joke ! Tim is well known within Alcatel to give your product the kiss of death. He has been promoting the following products: Crosslight OOO/oeo/OOO XC , 1640 LH DWDM, OGX OE0 XC 10G, 10G Sonet ADM, Astral Point. All of them are recognized market leaders ;-)

No credibility , no credentials, cannot spell data, no clue about IP, He got the job because he was the only english speaking management type below 65 in Alcatel-Plano.

One last thing, he was pushing HQ to buy PROCKET , yes PROCKET ....

Good luck TIMETRA !!!
optical_man
optical_man
12/4/2012 | 11:22:45 PM
re: Alcatel Redraws Router Strategy
Author: fw23 Number: 2
"and why there are wannabees who can't make it
in the core.
Juniper is finished. They are losing money
and nobody even knows who they are!!!!!
All Procket has to do now is put their marketing
muscle to work and the big win will be all theirs.
And with that a**hole CEO out of the way,
Procket is headed for big things."

Wow, not only has Procket made a core router, they've also gained market lead in crystalized kool-aid.
Seems that smoking it is 10x more powerful than drinking it!
Maybe it's embedded in aerosal form in the 14 Procket shirts that fw23 has been given by his boss, thereby giving off a beautiful aromatic Procket sensory indulgent odor all day.
fw23 just needs to breathe deeply to get that kool-aid into his bloodstream, then it's off to bash "anyone who's not Procket!!!"

sniff, i'm reminiscent of the mid 90's, sniff sniff
reoptic
reoptic
12/4/2012 | 11:22:44 PM
re: Alcatel Redraws Router Strategy
This thing has been a Belgian make-work program for a long time and deserved to be shot. It is nice that the Timetra box, an unfinished edge router with no deployments will now also cover the core routing market too. Since they are just starting up on this should only be a few years till they have a product...seems more like this is a graceful retreat and attempt to save money. This also shows what a joke the LR analysis of this market has been -- LR claiming Alcatel had all kinds of momentum with this product which is just bogus and evidenced by them shooting yet. Get real!
beltway_light
beltway_light
12/4/2012 | 11:22:44 PM
re: Alcatel Redraws Router Strategy
I bet that if the not-stop routing "feature" is
really ported into Timetra, it will be killed too.
signmeup
signmeup
12/4/2012 | 11:22:43 PM
re: Alcatel Redraws Router Strategy
>>I bet that if the not-stop routing "feature" is
really ported into Timetra, it will be killed too.

What will be killed, the feature or the Timetra box???

I have to agree, asking Timetra to be a core router is somewhat of a stretch, considering what their asics were designed to do. On the other hand, it can't be worse than the 7770.

signmeup
metroman
metroman
12/4/2012 | 11:22:40 PM
re: Alcatel Redraws Router Strategy
As an outsider it seems to me like Alcatel have never actually taken an IP product from concept to end-of-life (or even aquisition to EOL) without pulling out in favour of another strategy. How long will it be until Timetra are no longer flavour of the month?

For the sake of the Timetra employees I hope that the wind keeps blowing in your direction. Otherwise aquisition could be EOL.

Packet Engines 2?
Kevin Mitchell
Kevin Mitchell
12/4/2012 | 11:22:39 PM
re: Alcatel Redraws Router Strategy
Non-stop routing is a feature that needs to be in all IP devices, not just core. TiMetra's platform as is, cannot be a core router. You cannot take a box designed for one area of the network, wave a wand of R&D and rebranding and successfully sell it in another.

And what is up with the crazy guy saying this is good news for Procket. It really doesn't effect any vendor since they have so little market share. And Juniper is unknown? It helps if you're clued into the market before you start posting.

alcabash
alcabash
12/4/2012 | 11:22:38 PM
re: Alcatel Redraws Router Strategy
I can see from this message board that procket busdev gurus have revived their only hope of survival: fool the clueless texans into buying them.
Their hopes were crushed when Alcatel passed on Procket's unfinished router.
The Aussies in Plano are the dumbest of all, sell them the powerpoint charts, if that does not work try the French ;-)
fw23
fw23
12/4/2012 | 11:22:38 PM
re: Alcatel Redraws Router Strategy
>And what is up with the crazy guy saying this is >good news for Procket. It really doesn't effect >any vendor since they have so little market >share. And Juniper is unknown? It helps if >you're clued into the market before you start >posting.

Well, all I can tell you mister is that you
should get to Heavy Reading and check-out
the report. Its brilliant and shows the TRUTH
about the market and whose winning rather than
using half-truths put out by the propoganda
departments of companies.

The truth is that a large part of the industry
doesn't even know who juniper is. They were
an overhyped bubble company that made its name
selling to CLECs. And GUESS WHAT!!!! The
CLECs are done. Thats why Juniper is in debt!
Thats why if you say Juniper at Qwest or Bell
South, people think your talking about a tree.
And thats why juniper will be finished soon.

Cisco IS IP routing. Nobody else even comes
close except young up-and-comers from Asia
like Huawei and Hitachi. And of course the
company that gives cisco nightmares -- Procket.

I'm telling you. All Procket has to do is follow
the obvious strategy laid out by the light
reading market report. They need to beef up
their marketing, buy TV ads and get their name
out in the public. If they do that, they can
be bigger than Juniper in a year. I mean are
you people not reading the research reports on
this website! HOT-HOT-HOT info and STRATEGY.

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