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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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skeptic 12/4/2012 | 11:23:04 PM
re: Core Blimey! As a CEO/CTO/CIO I read Juniper as risk.
------------
You rate them as a risk, but your full of
praise for NEC, Fujitsu and Hitachi who can't
even deliver decent products in the space.

--------
Hitachi GR kicks Juniper's butt in IPv6 Internet Core
--------
Except that anyone who has seriously evaluated
that "thing" knows that its a science project
by a big company and that nobody with any sense
considers it a serious core router.

At the time of the test you probably refer to,
Hitachi had an "awesome" capacity of 25,000
routes and had problems with throughput of
small packets. (Light Reading test 2/2003)



ironccie 12/4/2012 | 11:23:02 PM
re: Core Blimey! You rate them as a risk, but your full of
praise for NEC, Fujitsu and Hitachi who can't
even deliver decent products in the space.
----------------------------

Ah, the Japanese can't make good products while our 6' tall double wide refrigerators are superior! Sounds like a paradigm I've heard before from many years ago. And when you compare the size of a T-640 and the power requirements to feed it, actually quite similiar. I may agree with Fujitsu being risky at this point, but NEC/Hitachi make good products and more importantly, good business (the point). Those companies also OEM Cisco/Foundry and others to fill the gaps while they develop their science. It may take Fujitsu some OEM's (Foundry NI40G sounds like a good fit) to get them right to begin with. Fujitsu already makes Foundry's ASIC's:

(biz.yahoo.com/prnews/030909/sf...

that this may be a possibility if they can't succeed with their own science project. In the end, the accountants make all decisions and Fujitsu is counting incoming beans while Juniper is spilling the beans.

-----------------------------

Except that anyone who has seriously evaluated
that "thing" knows that its a science project
by a big company and that nobody with any sense
considers it a serious core router.

-----------------------------

Hitachi and NEC make money with their core router products. Japanese carrier market was closed to foreign vendors until the late '90s to help their science projects out. Since Juniper does not make any profits, they sound more like the science project.

-----------------------------

At the time of the test you probably refer to,
Hitachi had an "awesome" capacity of 25,000
routes and had problems with throughput of
small packets. (Light Reading test 2/2003)

-----------------------------

I believe that the IPv6 Internet didn't have over 25,000 routes in 2/2003 and I'm sure aggregation will keep it well below that for years. The wire-speed performance is what the carriers are after. I think they know how to aggregate routes. And as for small packets, testing IPv6 with 64 byte packets is like testing baseball players for scoring goals in football. You'll see the same odds that 64 byte packets will be on the IPv6 Internet as you will David Beckham playing in the World Series. I believe 82 byte packets would be the starting point if you have any upper layer protocol information.

And Cisco still churns with inflated prices for low quality product that never could forward 64 byte packets at wire-speed with the new Sup720 not even being able to do that daunting task in the lab. Labs are for science projects.

IronCCIE
Iipoed 12/4/2012 | 11:23:02 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"

SO YOUR POINT IS?
edgesansonet 12/4/2012 | 11:23:02 PM
re: Core Blimey! BobbyMax:
All your base are belong to us.
st0 12/4/2012 | 11:23:01 PM
re: Core Blimey! Bobby said:
"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. "
========
Oh, well, the big guys were no angel either at the time. Some of them not even hide the intention to "drag it out" until the start up "dried up", so they can get the IP for free (even some test piece... anyone care to list the stuff tested for more than 10 month and kept going on change the performance spec?.... any one care to list the support =detail IP question you have to educate big guys...of course covered by NDA, so you should tell them EVERYTHING). It is like the survivor show on TV. Dirty tricks were played by both sides. Who suffer the most were the investors and hard work R&D engineers. (should we mention all the Gov money went down to the hole as well?).... The waste of financial and human resources is only the richest countries can afford....

A lesson to learn indeed.

-st
skeptic 12/4/2012 | 11:23:00 PM
re: Core Blimey! Ah, the Japanese can't make good products while our 6' tall double wide refrigerators are superior! Sounds like a paradigm I've heard before from many years ago. And when you compare the size of a T-640 and the power requirements to feed it, actually quite similiar. I may agree with Fujitsu being risky at this point, but NEC/Hitachi make good products and more importantly, good business (the point).
--------------
Well, whatever your vast experience with
refrigerators, you don't seem to have evaluated
routers to the same depth. I know of few
(if any) people who take NEC/Hitachi seriously
in the router market. Including people within
those companies. When they have real products
that work, they might be taken seriously but
for those of us who look beyond the power number
on the data sheet, they are not serious products.
---------
Those companies also OEM Cisco/Foundry and others to fill the gaps while they develop their science. It may take Fujitsu some OEM's (Foundry NI40G sounds like a good fit) to get them right to begin with. Fujitsu already makes Foundry's ASIC's:
---------------
OEM'ing a second-tier product from foundry and
owning an ASIC fab means nothing as far as
actual product development goes.
-------------
that this may be a possibility if they can't succeed with their own science project. In the end, the accountants make all decisions and Fujitsu is counting incoming beans while Juniper is spilling the beans.
-------------
It depends on how you define "Fujitsu". The
specific products we are talking about are not
making money for Fujitsu and are being subsidized
internally by other parts of the business. The
losses are essentially covered over. It would
as if Juniper were part of IBM or Microsoft or
general electric.
--------------
Hitachi and NEC make money with their core router products. Japanese carrier market was closed to foreign vendors until the late '90s to help their science projects out. Since Juniper does not make any profits, they sound more like the science project.
--------------
Juniper at least has lots of *real* customers
gained in *competitive* situations. Contrasted
with NEC and Hitachi which have nothing. And
the japanese market has been open for a long
while now. And I can tell you that most of
the major carriers in Japan don't take NEC and
Hitachi seriously. They might buy some if
told to, but they don't go to them for serious
networks.
---------
I believe that the IPv6 Internet didn't have over 25,000 routes in 2/2003 and I'm sure aggregation will keep it well below that for years. The wire-speed performance is what the carriers are after. I think they know how to aggregate routes. And as for small packets, testing IPv6 with 64 byte packets is like testing baseball players for scoring goals in football. You'll see the same odds that 64 byte packets will be on the IPv6 Internet as you will David Beckham playing in the World Series. I believe 82 byte packets would be the starting point if you have any upper layer protocol information.
-----------------

The truth is that your Hitachi router fell on
its face when compared to Juniper. And now,
for all the talk of how great they are, you
just excuse away their failures and mis-design
as irrelivant.

I can tell that more carriers would find your
arguments as just trying to rationalize an
inferior product created by people who didn't
quite know what they were doing. Those kind
of arguements get people shown the door more
often than not.

And for all your initial talk of Hitachi's
superiority over Juniper, you have yet to point
out examples of benchmarks where they did better
than Juniper.





reoptic 12/4/2012 | 11:22:59 PM
re: Core Blimey! LR is almost unprofessional here quoting randomly from a survey to build a case, but not providing that information for free to all readers. Basically they can create any kind of story they want from the data and no one can argue with their interpretation unless they pay $5000 for the report. Hard to find examples of this kind of thing -- if you see press on Gartner or Delloro reports it is always based on publicly available material. And it is not clear that the reporter has much experience interpreting market research as she leaps to wild conclusions that may or may not be valid for the reasons other posters cite. Is this audience really a good scientific sample for the market...were the questions framed in unbiased way...we can't tell so LR gets to be judge and jury here. Shameless attempt to sell research vs. good journalism. Why not release the report to other news agencies who might interpret it fairly vs. LR interpreting it only to generate controversy and sell copies...
ironccie 12/4/2012 | 11:22:58 PM
re: Core Blimey! Skeptic:

It is obvious that you have strong connections to Juniper. Perhaps an employee. I must admit that I have strong attachments to two vendors myself (stock holder). Additionally, I have been investing in mutual funds that support a lot of good Asian technology vendors. Anyone thinking the Japanese are going to let too many vendors into the Japan market is a bit skeptic.

The Japanese accepted Extreme Networks whole wheartedly at first, and then were burned by poor quality and hard to maintain systems they got burnt. Extreme was handing out marketing material at the YWCA charity run in Yoyogi park this last Saturday. You can tell that they have reduced to an edge player. Seems Cisco and Foundry are destined to become the accepted vendors here. RiverSTONE is still stuck in a poor business model as is Juniper. Poor business models are usually the Japanese way to show you the door. Extreme Networks has a great business model for Japan and that allowed them to make a HUGE percent of their revenues Worldwide in their glory days of 113Million per quarter. You can trust that w/o the Japan number they would have looked more like RiverSTONE (Number one router in Metro!) here last quarter.

No, the Japanese have spoken. They use Force10 at AIST and they are seriously competing with Foundry, but the BigIon MG8 (as everyone expected) is tearing them up now, and the funny thing is that Foundry released L3 code only for the L2 evaluations. Force10 was backwards, but you have to think, who is more advanced.

I don't want to talk about Foundry running IronCore and how some providers were not able to fix their Internet Core routing problems in the past. We call that a paradigm and anybody who thinks that all of Foundry's Internet Core router problems won't be solved needs to await the report. I'm sure it should include power requirements in the cost per port per year section.

Now when you look at Juniper's position in that light, and know that Cisco is still kicking Juniper and Foundry's butt in the service provider market space (especially in the enterprises who think they are service provider) that is a huge chunk that both companies are making a play at Cisco (well calculated if I might add).

Now we bring in the Japanese companies. NEC rules Docomo, the Japanese Government, the entertainment sector. Relations Foundry has with Mitsui (one of the former Zaibatsu) seem to be a brilliant move calculated by both Mitsui and Foundry. We're not gonna speak about the stinkers from both of these companies (Foundry/Mitsui), but together, they look like perl.

Now Juniper's only way in is through one of the companies that really control the Japanese market, and you can imagine how receptive they are to a company like Juniper that is in debt, in debt, in debt, in debt.

I have always said that I liked Juniper. I just don't own stock. Nobody in the world can convince me that Juniper is not the right solution for Internet Core routing in September 2003 and I agree with you.

Now let's talk about those Japanese vendors again?

Ignorance is bliss.

IronCCIE
skeptic 12/4/2012 | 11:22:57 PM
re: Core Blimey! Skeptic:

It is obvious that you have strong connections to Juniper. Perhaps an employee.
---------
1) Answer the question as put. You were running
off your mouth about Hitachi and IPv6. Now
you have retreated to throwing out "big words"
like Paradigm and business model while gone
on-and-on about how great foundry is. Either
respond to me on the subject of the last message
or don't bother at all.

2) You don't seem to know much about the core
router market. You go on-and-on about the
bottom-feeder stuff from Foundry and Extreme
at the low end of the market. Pardon me, but
I'm not impressed that foundry has been able
to surpass a junk-merchant in the form of
extreme. I dont consider them a serious
core or high-end edge platform. They have their
niche, but they have never been taken seriously
outside of it.

3) You seem to believing in playing favorites
and ignoring (or wishing away) reality. As in:

"I don't want to talk about Foundry running IronCore and how some providers were not able to fix their Internet Core routing problems in the past. We call that a paradigm and anybody who thinks that all of Foundry's Internet Core router problems won't be solved needs to await the report. "

You don't want to talk about it because you KNOW
the problems. But apparently you want the rest
of us to "wish" them away or wait for Foundry
to deliver on promises they have been breaking
for quite a long while now. Nobody takes them
seriously in the core. Even they know better.

4) The japanese market isn't as simple as you
think it is. Its very possible to get a good
relationship in terms of name-dropping, but
unless the partner in japan is serious about
it, its meaningless. And you only know how
meaningful a partnership is by the deals that
come out of it.

5) I've been accused of working for almost every
company in the space. I dont play those games.
I suggest you either go back to talking about
REAL issues in core routers or take your act
back to the stock boards on yahoo or wherever
you came from.



andropat 12/4/2012 | 11:22:56 PM
re: Core Blimey! Ironccie,

Isn't your large-enterprise based ccie up for renewal anytime soon? As skeptic said not only are you so far out of tune with core routing you simply are an idiot and are running your mouth about things you not only don't know but saying stuff that is just so far out of truth!

Go read financial reports. Juniper in "debt, debt, debt" as you put it? Please let me be that in debt! They have at last announcements like almost 2B cash. They have the best routing product "core" routing product on the market and that will never change in the foreseeable future.

You talked about people jumping ship to force10. Haha... all I have to say is that Juniper has done one hell of a job keeping eng talent. Who cares about non-producers who blame their companies and then jump ship. It's actually great for Juniper because now force10 has the idiots!

I just hate seeing guys like you posting meaningless, non-sensical stuff. Go read the financials before you run your mouth. I am a stockholder and all I can say is "THANK YOU JUNIPER"!!!!!!!
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