Optical/IP Networks

Core Blimey!

A market perception survey published this week by Heavy Reading, Light Reading's market research division, shows that Cisco doesn't have a lot to worry about when it comes to core router competition.

Juniper Networks Inc. (Nasdaq: JNPR), the number two player in this market, lags Cisco in terms of name recognition among service providers. And Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7), the number three player, is a long, long way behind.

Heavy Reading's survey asked respondents within carriers and service providers around the world to rank telecom equipment providers based on their perception of the companies in a number of categories, including:

  • Name Recognition
  • Price Leadership
  • Performance Leadership
  • Market Leadership in Product Quality and Reliability
  • Market Leadership in Services and Support
The entire survey, which covered 22 different product categories, drew 770 responses from 300 service providers. About 212 of those individuals answered questions regarding core routers.

For the most part, the survey results in the IP core router category were as you'd expect, as the sentiments of service providers mirror general market trends. Namely, Cisco Systems Inc. (Nasdaq: CSCO) got top scores in three main categories: name recognition, quality and reliability, and service and support. This makes perfect sense, given the company's dominance of the core router market. In the second quarter of 2003, it had about 74 percent market share, according to Synergy Research Group Inc. (see Reports: Router Sales Grew in Q2).

Juniper, which had 22 percent market share in Q2, beat out Cisco in two other categories: price and performance. But the company clearly has some work ahead of it, especially when it comes to marketing. Juniper’s overall recognition rating (81.1 percent) suggests that nearly one in five service providers don't even know the company sells core routers.

“It’s tough to believe that a service provider wouldn’t know one of the two main suppliers of core routing gear,” says Stephen Kamman, an analyst with CIBC World Markets.

Juniper is especially challenged when it comes to targeting regional Bell operating companies (RBOCS). Only about 76 percent of respondents from this group recognized Juniper as a core IP router vendor. This is puzzling, considering that the company has won some business for its core routers at BellSouth Corp. (NYSE: BLS) (see BellSouth Unveils MPLS Backbone). It had also been in contention for business at Verizon Communications Inc. (NYSE: VZ) (see Juniper Loses Ground to Cisco at Verizon). The company seems do much better among competitive local exchange carriers (CLECs), according to the survey. About 93 percent of those respondents recognized Juniper as a core router player.

The news is even worse for Avici, which has been shipping its flagship core router for the past four years. The company places fifth behind Huawei Technologies Co. Ltd. and Alcatel SA (NYSE: ALA; Paris: CGEP:PA). This is especially interesting, as Huawei is actually reselling Avici's core router in China (see Avici Joins Huawei for China Push).

Avici has struggled every quarter to make gains against its two main competitors, Cisco and Juniper. In the second quarter of 2003, the company had about 2.8 percent of the market, according to Synergy Research. According to the Heavy Reading report, three out of four respondents did not even identify Avici as a core router maker.

By contrast, Alcatel appears to be gaining recognition in this market segment despite its late entry into the field. Overall, more than twice as many respondents identified Alcatel as a core router vendor than Avici. Alcatel also received higher scores than Avici for performance, quality and reliability, and service and support. Service providers’ perceptions seem to make sense, given the company has increased its market share to 2.9 percent in the second quarter of 2003, up from 1.6 percent in the first quarter, according to Synergy.

Huawei, which has traditionally been weak in IP switching and routing, is recognized as the price leader. Although only 24.5 percent of all respondents recognized Huawei as a core router vendor, 23.4 percent of those who rated suppliers on price named Huawei as the leader in that category. Not surprisingly, Huawei pulled in its strongest ratings in Asia/Pacific, where it edged out Alcatel for third place overall.

Detailed information on the IP router market along with 21 other product categories including metro Ethernet equipment, multiservice edge switches, edge routers, and broadband remote access servers, are also included in the report, entitled Heavy Reading 2003 Telecom Equipment Market Perception Study.

— Marguerite Reardon, Senior Editor, Light Reading

To learn more about the report, including selected excerpts, please go here. The Heavy Reading 2003 Telecom Equipment Market Perception Study is priced at $4,950, and includes access to an online database allowing further analysis of all survey results according to search criteria such as geography, customer type, and respondent job title.

The product categories covered in the survey are:
Sonet and SDH Multiservice Provisioning Platforms, Metro Ethernet Equipment (including a separate study of Packet Ring Technology), Ethernet Access Equipment, 10-Gbit/s Ethernet Switches, Core Routers, Multiservice Switches, Edge Routers, Broadband Remote Access Servers, DSL Access Multiplexers, Equipment for Cable/MSO Networks, Third-Generation Digital Loop Carriers, Access/Metro DWDM Systems, Long-Haul DWDM Systems (including separate studies for terrestrial and submarine systems), Optical Switches, Softswitching/VOIP Equipment, IP Service Controllers (including separate studies for content switches/load balancers, traffic management devices, session controllers, and route optimization devices), Test Equipment, Fiber Access Equipment, Free-Space Optics, Broadband Home Gateways, Integrated Access Devices, and Video-Over-IP Equipment.

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palaeozoic 12/4/2012 | 11:23:07 PM
re: Core Blimey! By my math, 40 human beings out of 770 polled failed to indicate familiarity with Juniper despite being familiar (evidently) with core routers. And the LR conclusion is "One in five carriers don't know Juniper makes core routers"??? First, the data does not substantiate that claim. Second, if I were Juniper I'd be happy that almost 82% of my target market knew me. Third, this article actually looks more like an ad for the five thousand dollar report that the hapless marketeers at Juniper will surely buy now.
optical_man 12/4/2012 | 11:23:07 PM
re: Core Blimey! My view of the world, as told to me by my friends in certain core areas of the world's largest networks:
Avici has a rather mentally limited VP of Sales. No vision, blames everyone else, living inside a bubble, etc, etc.
They say that's the bottom line, or so they tell me.
My two cents are concerning Juniper;
They have sharp folks and are a great irritant to Cisco.
Full Disclosure: I am not with any of these companies, nor at a competitor. I just have many tentacles of information.
turing 12/4/2012 | 11:23:07 PM
re: Core Blimey! If 20% of the respondants haven't heard of Juniper, then those 20% are not in the business of using core routers, or don't know what "core router" means. I'm not saying Juniper's marketing is great (nor their products), but really their name is unavoidable if you work in this market segment. Heck, even just reading LR every few months would tell you who they are.

Avici being so low I believe - they don't seem to know how to market (too focused on engineering... haven't learned the cisco lesson). And Alcatel has a core router? Shipping? You're not calling the 7670 a core router are you? The word on the street is the 7770 isn't working. But where is Procket, Caspian, Hyperchip, Chiaro, etc. on the list?

mu-law 12/4/2012 | 11:23:06 PM
re: Core Blimey! Well, of course... If you conduct a random sample of employees at a large carrier, the results will inevitably be as follows:

RCMAC operator: Hello?
LR: blah blah "Core Router" blah
RCMAC operator: I'm sorry, there's no USOC for that, etc.

Technician 1: What!!?
LR: blah blah "Core Router" blah
Technician 1: I think you should talk to my shop steward...

Lineman: Ug?
LR: "Core Router!"
Lineman: Black and Decker?

VP of Network: Howdy! How the heck are ya!
LR: blah blah "Core Router" blah
VP of Network: We're currently using a Nortel Passport optical network, etc.
fhe 12/4/2012 | 11:23:06 PM
re: Core Blimey! First of all, you need to tell us how you conducted the survey, and how the questions were asked.

IF the question was something like, "Rank the top 5 core router companies based on name recognition..." And the response was "Cisco, Juniper, Alcatel, Huawei, Avici".

That means people recognise all 5 of these companies. But if you stretch this to mean only 4 out of 5 people know Juniper, or only 1 of 5 know Avici, then you have some serious issue.

Now, if the response was, "What the hell??? I don't freaking know company X is in this space!" Then, you can say people don't know the company.

This smells like one of those surveys that can be easily manipulated depending on the questions.
BobbyMax 12/4/2012 | 11:23:05 PM
re: Core Blimey! It used to be that all telecom equipment from very traditional and large size companies. A partial list of suppliers include: Lucent/Bell Labs,Nortel, Stemens, Alcatel, Ericson, Fijitsu, NEC, Tellabs, and few others. These were very well known companies with the most reliable products and technology.

Starting 1990, there has been huge influx of money from the US and foregn investors. The other companies in the report still do not have carrier grade products. These newcomers had very dishonest VCs and CEOs whose words could not be trusted at any time. Based on deception and lies, these companies targeted carriers and sold them a lot of things that did not work. It is very time consuming to test products from start-ups. In fact Qwest went out of business by testing products from the third rate start-ups mostly operating from california. For example, Ascend Communications cheated big time Lucent. Most of the telecom companies were victimized by start-ups primarily located in California. The RBOCS were led to believe by start-ups that they had products which was well tested and complied with standards. Forexample, Avici supplied core routers to AT&T, but the product did not work for long time. The same deception continued in the area of DWDMs, Mettro Ethernet, edge routers and MSPPs. Many start=ups also fractured the OSS market by not being able to produce which worked.

Almost a decade of deception have destroyed the telecommarket. which is not likely to recover even after 25 years.
Indy_lite 12/4/2012 | 11:23:05 PM
re: Core Blimey! If somebody works in a farm in North Dakota feeding cows, and he never heard of Juniper, it is understandable.

But somebody working at service providers does not know Juniper makes core routers ?! BobbyMax, should the Americans who are out of work deserve to get this guy's job at the service provider ? Or, we should increase the H1B counts to replace these people.
optical_man 12/4/2012 | 11:23:05 PM
re: Core Blimey! There are 3 types of lies:

"Lies, Damn Lies, and Statistics"

quote from either Mark Twain or Benjamin Disraeli (depending on your view of history).

I'm starting to think, from the messages I'm reading, and without seeing this $5000 report, that numbers can be twisted even in Telecom.
listen2this 12/4/2012 | 11:23:04 PM
re: Core Blimey! there is an old saying..
"a fish rots from the head"
thats all I need to say
ironccie 12/4/2012 | 11:23:04 PM
re: Core Blimey! Ignorance is bliss.

Maybe it's good they don't know Juniper. Juniper has not retained 1 penny of earnings and won't be in anybody's core in 10 years. As a CEO/CTO/CIO I read Juniper as risk. They have been around since the mid-90's and not made any money at all! Even through the Internet boom! They have no bright future. How can you expect to make profits by using equipment from a company that doesn't know how to make profits? They are in debt and expect the carriers to save them. Doesn't make sense. Beta was a great technology too, but VHS won. Hey, let's talk about Procket! Why weren't they mentioned by anyone? Oh, they're losers with a poor plan too. Cisco, Foundry, Fujitsu, Hitachi, NEC, and other complet companies will be around long after the deaths of Juniper and Procket. Business is business and Juniper sucks in this aspect. Totally.

Hitachi GR kicks Juniper's butt in IPv6 Internet Core, and they weren't mentioned either. Doesn't mean the folks polled are stupid. It means they are not going to use Hitachi or Juniper in the core for the near future and this is Juniper's entire business plan. At least Hitachi has the loyalty of the Japanese carriers. Why did the president of Juniper Japan and their best SE's take off to Force10 (another sad story)? Juniper has a poor plan and in the end cannot execute (and has not executed). You can still like them though. I know folks that still have their Beta players. Just can't buy a new one.

But wait, maybe we'll have another Internet boom and everybody will be happy? Keep making your snide comments about how only Juniper can do core routing. We call that a paradigm and when you're caught in one, you'll be suprised at what will happen that you don't understand.

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