Optical/IP Networks

...But Announces Dull Edge Upgrades

Juniper Networks Inc. (Nasdaq: JNPR) is likely to throw Wall Street for a non-loop today with its latest product announcement. Instead of announcing a new wireless router, or its much-anticipated new core router, the company announced upgrades to its existing edge routing family of products.

In the announcement, Juniper touted security and density upgrades to its edge routers. It also announced a new platform, the M40e -- essentially a fully redundant version of the M40 platform (see Juniper Upgrades Router).

“These are nice to have, but everyone is waiting for Gibson,” says Stephen Kamman, an equities analyst with CIBC World Markets.

Last week word had quickly spread around the Street that Juniper was preparing for a big announcement on Tuesday February 5th. Analysts following the company hoped it would be the announcement of Juniper’s core router -- code named "Gibson" -- or a new wireless router using technology from Juniper’s joint venture with Ericsson AB (Nasdaq: ERICY).

Juniper’s stock had not gotten a boost from the rumors. In fact Monday, it closed down $1.02 (6.82%) to $13.94. But analysts attribute this to news that enterprise switch maker Enterasys Networks Inc. (NYSE: ETS) was being investigated by the Securities and Exchange Commission, as well as word that Williams Communications Group (NYSE: WCG) had filed for Chapter 11 bankruptcy protection (see Williams Winding Down? and Telecom: The Fear Factor).

“There was a lot of speculation floating around last week that they would announce the wireless router,” says Kamman. “What happened to their stock yesterday was a factor of what was happening in the market in general.”

In classic Juniper fashion, the company has been tight-lipped about both its wireless project and plans for a new core router. Wall Streeters had hoped for some mention of the new routers on the company’s quarterly conference in January, but were disappointed (see Juniper Meets Lowered Expectations).

So what exactly did Juniper announce today?

Denser low-speed interface cards -- Juniper announced several new physical interface cards (PICs) for customer connectivity, which offer higher density DS3 and T1 interfaces.

Layer 2 virtual private networks (VPN) support -- Using the pre-standard Martini draft implementation, Juniper is offering Layer 2 VPNs through enhancements to its Junos Internet software. Kevin Dillon, director of product marketing, says this will allow providers to extend private IP services to the enterprise and will also help them consolidate Ethernet, ATM, and frame relay onto a unified IP/MPLS backbone.

Hardware-based Triple Data Encryption Standard (3DES) encryption -- This capability is made possible by new silicon from Broadcom Corp. (Nasdaq: BRCM). Each encryption service physical interface card (ES PIC) supports 1,000 concurrent 3DES "trusted tunnels" with a total of 800-Mbit/s throughput, according to Dillon.

High-availability edge routing -- This 40-Gbit/s platform, called the M40e, is modeled after the M160 with hot swappable interface cards, a redundant routing engine, and redundant switch fabrics. Like the original M40, it is an eight-slot chassis that fits into half a standard seven-foot telco rack. It runs all the same software and uses the same Internet Processor II ASICS as the rest of the M-series of routers.

The new announcements did little to excite non-financial types, either. The new interface densities and Layer 2 VPN support were somewhat expected, given that competitors like Riverstone Networks Inc. (Nasdaq: RSTN) already have announced support for the Martini draft.

“The jury is still out on Martini anyway,” says David Newman, president of Network Test Inc., an independent network testing house. “It’s not even a standard yet, for crying out loud.” But Newman views the addition of encryption and the new high-availability platform as important additions to the portfolio.

“Reliability and redundancy are arguably the most important criteria for a service provider,” he says. “Layer 2 VPNs don’t buy anything in the way of encryption or authentication, so support for triple DES encryption is important.”

— Marguerite Reardon, Senior Editor, Light Reading

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