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Optical/IP

Cisco Puts Service Creation on Edge

Yesterday, Cisco Systems Inc. (Nasdaq: CSCO) put the pressure on an entire group of companies pursuing the IP services market by announcing new security capabilities for its Cisco 10000 edge router (see Cisco Intros Edge Router).

It's a simple, yet classic marketing move. By adding IP services capabilities such as virtual private networks (VPNs) to its market-leading edge routers, Cisco intends to eliminate the need for separate IP services boxes being developed by a large number of companies.

“It seems to be a preemptive move by Cisco,” says Roz Roseboro, an analyst with RHK Inc.. “They know all these service creation boxes are coming out, and it’s their way of locking out the competition.”

Companies marketing IP service creation equipment include CoSine Communications Inc. (Nasdaq: COSN), Nortel Networks Corp. (NYSE/Toronto: NT), and Lucent Technologies Inc. (NYSE: LU), along with startups like Quarry Technologies Inc., Ellacoya Networks Inc., net.com (NYSE: NWK), and Celox Networks. Their boxes, however do not offer full routing (see Quarry Mines Another Product).

“It’s like buying an IP service aggregator and getting a full functioning router for free,” crows Alan Cohen, senior director of marketing for Cisco’s service provider line of business. “What we’ve found is that customers want fewer boxes in their networks. Some of our competitors that are already seeing some success in this area are using a Cisco router behind their box.”

Cisco has hedged its bets on which VPN technology to use. Unlike other competitors that either offer VPNs through MPLS (multiprotocol label switching) traffic engineering or through IPSec (IP security) encryption tunneling, Cisco will offer both. Essentially, the company has taken technology from its VPN5000 platform that uses IPSec and put it into a module form factor that can be slotted into the 10000 routing platform. The MPLS VPN functionality is part of Cisco’s IOS software.

But Cisco's isn’t the only edge router that aims to take on the new service creation platforms. Unisphere Networks Inc. (Nasdaq: UNSP) already offers MPLS VPN functionality in its edge router and it has customers like Portugal Telecom that are already using it to provide new services. Like Cisco, Unisphere believes that customers want full routing and IP services in one device.

“We’ve been doing this for a while, and its nice to see Cisco using the same language,” says Judy Benningson, director of product management for the IP routing business unit at Unisphere. "It validates the market for us."

So, what's the catch?

Competitors like Quarry Technologies say Cisco’s VPN solution doesn’t stack up. And they might have a point. For one, because it’s inserted as an additional card into a Cisco router, valuable input/output slots are taken up to add VPN functionality. Analysts like Roseboro point out that this can be a plus by adding flexibility, but it doesn’t exactly make for an elegant integration of technology and may result in a performance hit. In such an architecture, incoming traffic comes in on a card, connects with the routing table, and is then sent through an encryption module before being sent back to the router's forwarding engine.

“It’s not very efficient,” says Cam Cullen, director of product management for Quarry. “It’s difficult to get scalable, fast VPN services when it’s just a service bolted on. Our product is built from the ground up to handle VPNs.” Cisco claims that it performs encryption and packet forwarding at wire rates. This is an improvement over the 7500, Cisco’s enterprise router, which makes up the majority of the company’s edge routers installed in service provider networks, says analyst Roseboro. Currently, Cisco accounts for better than 90 percent of the edge router market, according to RHK.

Roseboro says it's still too early to tell whether integrated routing and IP service systems will win out over separate service creation devices that offer other services like managed firewalls. Still, competitors are nervous about Cisco’s foray into their space.

“Everything Cisco does could be viewed as a threat, because of who they are,” says Quarry's Cullen. “It doesn’t matter if you don’t do the thing you claim to do particularly well, as long as service providers see it checked off on the RFP [request for proposal]. Cisco’s big advantage is that people already feel comfortable with their routing, and now they can check off another box.”

-- Marguerite Reardon, senior editor, Light Reading http://www.lightreading.com

hiddentiger 12/4/2012 | 8:29:06 PM
re: Cisco Puts Service Creation on Edge This announcement does more harm to pure VPN plays like CoSine. It doesn't address the bigger issue of layering other potential revenue generating applications which require IP service-aware intelligence combined with application flow level QoS.
watchtower 12/4/2012 | 8:28:55 PM
re: Cisco Puts Service Creation on Edge Portugal Telecom deployed Unisphere's edge router?

You mean Siemens couldn't twist a larger PTT like it's own Deutche Telecom to deploy their late-to-market, got-booted-from UUNET, can't-be-manufactured-in-volume, edge router?

Cisco is in great shape against this list of competitors.

kcufde 12/4/2012 | 8:28:25 PM
re: Cisco Puts Service Creation on Edge cisco employees are making disco now
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