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Optical/IP

Cisco and Juniper: It's War

In a startling coincidence, archrival terabit router vendors Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) simultaneously announced big OC192 breakthroughs this week.

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

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jtmrvc 12/4/2012 | 8:57:41 PM
re: Cisco and Juniper: It's War CharlotteGÇÖs Networks has a better product than anyone on the market. They have proven themselves in Beta and are ready to take their share of the market. Why does Lightreading repeatedly disregard any thing that Mrv Communications has to do with? I think they should report more indiscriminately because it certainly seems that they have a hidden agenda.
twistedcopper 12/4/2012 | 8:57:40 PM
re: Cisco and Juniper: It's War jtmrvc-
How did I know you were going to bring up Charlotte's Networks before I even opened your message? Face it, your pro-MRV messages aren't going to help the stock price.
Steve Saunders 12/4/2012 | 8:57:40 PM
re: Cisco and Juniper: It's War Re: Charlotte's Web. We can't get past the name.

--Steve

Steve Saunders 12/4/2012 | 8:57:39 PM
re: Cisco and Juniper: It's War "I can prove that they definatley have a better product than Avici and Cisco."

We have hired an independent test lab to evaluate the router products from Charlotte's Web, Juniper, Cisco, and others.

In mid-March we will release the results. At that point we will all know, for sure, who has the best product.

Steve
jtmrvc 12/4/2012 | 8:57:39 PM
re: Cisco and Juniper: It's War Read this http://globes.co.il/serveen/

I can prove that they definatley have a better product than Avici and Cisco.

jtmrvc 12/4/2012 | 8:57:38 PM
re: Cisco and Juniper: It's War I have no problem waiting for the results if thats what it will take to prove they are an all around better product. If possible can you tell me if you are just testing on speed and capacity or are they going to be other areas of testing?
twistedcopper 12/4/2012 | 8:57:38 PM
re: Cisco and Juniper: It's War jtmrvc-
oh, my mistake... you must be right. if "globes" says they're better, they've got to be better.

steve-
i think you should start checking out this the "globes" website on a regular basis to get tips on the next hot mrv company.

-twisted
Steve Saunders 12/4/2012 | 8:57:36 PM
re: Cisco and Juniper: It's War can't comment, sorry

Steve
bond 12/4/2012 | 8:57:35 PM
re: Cisco and Juniper: It's War What about Pluris?
jtmrvc 12/4/2012 | 8:57:35 PM
re: Cisco and Juniper: It's War
Are you waiting for the results than deciding what you want to compare. HOw do we know that you are a none-bias party?
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