Optical/IP Networks

Caspian Scores in Korea

With a contract win in Korea, Caspian Networks Inc. is hoping to rekindle its cachet as a core-router player.

The company tells Light Reading it beat Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) to deploy part of a new network for South Korea's eGovernment initiative, a bid awarded by Korea's Ministry of Information and Communications. "We won the first stage of that rollout," says Brad Wurtz, Caspian's CEO.

Juniper officials declined comment; Cisco did not return a call for comment.

The win was presaged when Korea's Electronics and Telecommunications Research Institute (ETRI) picked Caspian to help devise router strategies for the next wave of Korea's network buildouts (see Caspian Lands Korean Gig). Having wired most of the country with broadband, Korea is now looking at ways to enhance the network to deliver advanced services, Wurtz says.

The eGovernment network is one such project. Caspian isn't disclosing the contract size, but Wurtz says it's a "one- to two-year project" worth "certainly in the millions of dollars." A larger contract is yet to be awarded -- the Broadband Communications Network (BcN), a metro and core network to augment Korea's broadband buildout, Wurtz says.

Caspian's win hinges on its flow-based routing, which keeps track of all the packets in a particular traffic flow rather than treating each packet separately. Korea's next wave of network buildouts will focus on real-time applications -- videoconferencing and distance learning, in the case of the eGovernment network -- and Caspian claims its technology provides unmatched levels of quality of service (QOS) in those cases.

For a company that Wurtz admits has experienced its "ups and downs," the Korean business is a nice "up." Caspian aimed for the core router space initially but had to back down in the face of insurmountable competition from Cisco and Juniper. The company hasn't changed its product offerings, but it's put more emphasis on flow-based routing lately.

The hope for Caspian is that other service providers see Korea as a model. "They're dealing with problems no one else is facing," including high-bandwidth, real-time applications, Wurtz says. "They have the broadband connection to the house, but behind that, they don't have the network connections to support quality of service."

Caspian's chances at the core router market outside Asia might be questionable, though.

"I don't think they're going to play in the core, and the functionality they're going after is more an edge functionality," says Mark Seery, an analyst with RHK Inc. To that end, Caspian this week released the A50, a pint-sized version of its A120 flagship router (see Caspian Unveils A50 Router).

Caspian's handicap in core routing is that the company initially didn't focus on Multiprotocol Label Switching (MPLS), Seery says. MPLS has become paramount to many next-generation buildouts, as large carriers intend to use the technology to carry all types of traffic across an Internet Protocol (IP) network core. BT Group plc's (NYSE: BT; London: BTA) 21CN project is one example of this principle.

But MPLS isn't as big a deal in Asia, where many networks are being built from scratch, without the legacy networks and disparate traffic types being juggled by North American and European carriers. In this venue, a lack of MPLS doesn't hurt as much, Seery says.

Caspian has since added MPLS to its offerings, but that's probably not enough to put a serious dent in the market dominance enjoyed by Cisco and Juniper. Even if it was, Caspian would face competition from several fronts. Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) and Chiaro Networks Inc. continue to market large core routers. Alcatel's (NYSE: ALA; Paris: CGEP:PA) 7750 SR-12, frequently pitched as a multiservice edge router, is suitable for some core deployments. And Foundry Networks Inc. (Nasdaq: FDRY) and Huawei Technologies Co. Ltd. recently joined the game (see Huawei Goes Hard Core and Foundry Strikes at the Core).

Caspian, meanwhile, has used the flow-based routing concept to get into other corners of the market. At the behest of one large European carrier, for example, Caspian honed its router's ability to identify peer-to-peer traffic (see Caspian Adds P2P Punch). In the U.S., this could help Caspian get into the cable market, where the asymmetric networks are "inherently more vulnerable to the symmetric nature of P2P traffic," Wurtz says.

— Craig Matsumoto, Senior Editor, Light Reading

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