Cisco and Juniper: It's War
Cisco unveiled its new 10-Gbit/s OC192 routers yesterday. It also announced some key customer wins -- including Sprint Corp. (NYSE: FON) and 360networks Inc. (Nasdaq: TSIX; Toronto: TSX.TO) (see Cisco Ships OC192). AT&T Corp. (NYSE: T) is a trial customer.
On the same day, Qwest Communications International Corp. (NYSE:Q) announced that it has completed the rollout of its nationwide OC192c network, which is based on Juniper's M160 routers (see Qwest Delivers Nationwide OC192).
Some analysts say the timing is no coincidence: "In an attempt to dampen the attention Cisco could garner from its product launch, Juniper announced that Qwest was using its M160 core router as part of its nationwide OC192 network," wrote Epoch Partners analyst Seth Spalding, in a research note.
Juniper denies getting up to PR mischief. "It was really Qwest's release, and it was in the works for some time. You'll have to ask them about it," said a Juniper spokeswoman. Juniper also says it has no equity relationship with Qwest that might encourage a plan for joint announcement.
"We were going to do this announcement at the end of last year," says Mike Perusse, senior vice president for engineering at Qwest. Apparently, all the "OKs" didn't come through until just yesterday.
But while insisting that the timing of the announcements was "purely coincidental," Perusse did have this to say: "We waited to announce something we did, not something we plan to do. I think that's a big difference from the other announcements this week."
Cisco could not be reached for comment at press time.
The PR collision shows just how fast the heat's turning up on the race among high-speed router vendors. It also demonstrates increased tensions between the market leaders, and it proves that the battleground where dominance will be won or lost lies on the big carrier networks.
"The carriers I've had conversations with tell me they're intent on getting more than one supplier for routing," says Chris Nicoll, director at Current Analysis. He says the carriers also will try to encourage competition among leading suppliers in the hopes of getting price discounts. "Pricing on this class of hardware system has been very high."
Competition between Cisco and Juniper has been heating up for some time. For the past year, it's been clear that Cisco, the unchallenged king of enterprise routing, can't count on automatically ruling the emerging telecom space. Being late to market with OC192 was a big drawback for Cisco, and Juniper has shown every sign of taking full advantage of the situation (see Juniper Eats Into Cisco's Lunch).
The plot has thickened with the arrival of a third player, Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7), which also recently announced OC192 support (see AT&T Deal Boosts Avici).
Avici also has deals with AT&T and Qwest, and it's coming on strong in terms of its IP capabilities. "We view these announcements as a sign that Cisco and Juniper are on even ground for the current generation network, but continue to believe that Avici has the upper hand for next-generation Internet protocol (IP) networking," writes Spalding.
Avici also increased its market share this past quarter, according to figures from The Dell'Oro Group, which also shows a narrowing of the gap between Cisco and Juniper. C'est la guerre!
Things haven't been going quite so well for some other players. Terabit router startup IronBridge Networks Inc. laid off more than 165 employees this week and is desperately looking for a last-minute savior (see IronBridge Has Fallen Down). And last week Foundry Networks Inc. (Nasdaq: FDRY) basically gave up on trying to compete for a piece of the market for core Internet routers (see Foundry Retreats from the Core). This afternoon, shares of Avici stock were trading at 36.13, up 0.63 (1.76%); Cisco shares were trading at 37.81, up 0.38 (1%); Juniper shares were trading at 107.44, up 1.50 (1.42%).
-- Mary Jander, senior editor, Light Reading http://www.lightreading.com