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Optical/IP Networks

Cisco, Juniper, Lock Down Internet Router Market

Still, for now, Cisco is anything but unhappy. The market for high-speed routers is exploding; Dell'Oro Group predicts that it will triple from $700 million in 1999 to $2 billion this year.

If Cisco maintains market share it could, theoretically, rake in $1.7 billion this year, even after Juniper has helped itself to a modest slice of the pie.

Juniper, similarly, is more than happy with its position. "The market is growing so fast that the real challenge for us is to scale up to meet demand, not to compete with Cisco," says Scott Kriens, CEO of Juniper. It's worth noting, however, that he questions whether the market will actually triple. "I couldn't say that I'm sure about that," he says

Regardless, there are three reasons for the growth in router sales: First, more Internet traffic. Second, service providers are starting to migrate from hub and spoke topologies (which require few routers), to mesh topologies (which require many). Third, use of DWDM equipment in core networks, which requires a router port to be installed to terminate each DWDM channel supported.

Those factors played a big role in driving Q3 revenues - which themselves were up 47 percent over Q2 1999. According to Dell'Oro Group, high-speed WAN routers generated $199 million in sales in the third quarter. Sales of Cisco's 12000 GSR Series accounted for $155 million. Juniper was responsible for $30 million.

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