Cisco is saying it has shipped two CRS-1 boxes for revenue, according to reports issued yesterday by analysts Tal Liani of Merrill Lynch & Co. Inc. (the "fully deployed" analyst) and Mark Sue of RBC Capital Markets. Cisco also told the analysts that seven customers have completed CRS-1 testing and seven more have tests underway.
Sprint Corp. (NYSE: FON) and Deutsche Telekom AG (NYSE: DT) have publicly said they're testing the CRS-1. Sprint even announced it was using the box, although some analysts believe it's not carrying any customer traffic (see Sprint Throttles Up Cisco's CRS-1).
But that's different from the question of who the two paying customers are. Sue pegs Sprint and America Online as the buyers. Another source requesting anonymity spins a different tale, saying Comcast Corp. (Nasdaq: CMCSA, CMCSK) is definitely one of the two buyers, but is not putting the box into a live network yet.
The source has also heard AT&T Corp. (NYSE: T) is a possibility, but adds that that seems unlikely due to AT&T's recent contract award to Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) for core routing (see Avici Expands AT&T's IP Backbone).
Cisco, by the way, declines comment on all of this; Officials wouldn't even confirm the details published by the analysts, nor would they comment on the status of the Sprint installation.
The CRS-1, formerly known as the HFR, is Cisco's multichassis core router, theoretically capable of linking 18 chassis into one logical router with 46 Tbit/s of capacity. The product was launched to great fanfare in May, with a $450,000 price tag (for one bare-bones chassis) and promises of shipments by July (see Cisco Unveils the HFR).
The product gave Cisco a new core offering, supplanting the ageing Gigabit Switch Router 12000 series. It also gave Cisco an answer to high-end competitors such as Avici's Terabit Switch Router (TSR). Perhaps most importantly, the CRS-1 debuted Cisco's new modular operating system, called IOS XR.
Analysts and competitors have since sniped at the CRS-1, saying the product wasn't ready to ship by deadline (Cisco insists it was, and that the first shipment came in August). The talk is likely to continue -- sources still say Cisco's pending acquisition of Procket Networks Inc. is aimed at gathering the talent to patch up flaws in the CRS-1 technology (see Valley Wonk: The Procket Puzzle and Procket Reaches 'End of Life').
If the CRS-1 is truly making its way into live networks, it could put some pressure on Juniper Networks Inc. (Nasdaq: JNPR). Juniper's got a multichassis product in the wings, the TX Matrix intended to combine the company's T640 core routers in a multichassis configuration. The TX wasn't expected to be released until this year, and there's still no sign of it -- possibly because demand is so low for such large routers (see Juniper Goes Terabit With the T640 and Juniper's TX Waits Its Turn).
So do the CRS-1 shipments give Cisco a killer edge against Juniper? Hardly. Liani notes that a technological lead by either company "will close over time," creating a neck-and-neck race for quite a while. "In the core routing [market], we believe that the comparison between Cisco and Juniper is almost irrelevant. We believe both players now have good offerings and we think that the carriers will continue to dual-source these vendors, in line with their traditional behavior," Liani writes.
It's also still believed that no customer is linking the CRS-1 in a multichassis configuration. In fact, much of the buzz around the system is around a half-sized version that would appeal to a larger percentage of network owners. RBC analyst Sue has taken to calling this box the "CRS-2," and his report yesterday noted that the product probably won't be announced until the end of 2004 or early 2005 (see Cisco Sprints Ahead With HFR).
— Craig Matsumoto, Senior Editor, Light Reading
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