Juniper Antes Up on Ethernet (Finally)

After a year of getting beaten up about it, Juniper Networks Inc. (NYSE: JNPR) is finally releasing its first-ever Ethernet box, submitting a direct challenge against the hot hand of Alcatel (NYSE: ALA; Paris: CGEP:PA) and the industry-topping market share of Cisco Systems Inc. (Nasdaq: CSCO).

The MX series, kicking off with the MX960 launch today, is a line of Ethernet aggregation boxes with Layer 3 routing capabilities -- the kind of system that some critics believe is vital for Juniper to compete for a spot in IPTV networks.

Obviously, the MX series would also play in carrier Ethernet buildouts, which have become a hot topic lately. (See Carrier Ethernet Takes Flight.)

"The objective is to participate in a more direct manner in the carrier Ethernet marketplace," says Shailesh Shukla, Juniper's vice president of service provider marketing.

The MX960 is slated for general availability in the first quarter of 2007.

"It's definitely what Juniper needs," says Mark Seery, an analyst with Ovum RHK Inc. "Nothing's ever exactly a home run, but it's pretty good. It gets them competitive with [Alcatel's 7750 Service Router] for the first time."

Ethernet has become a hot market for telecom gear vendors, as advances in reliability and manageability have carriers preparing ambitious plans for Ethernet services. Moreover, many IPTV deployments carry video on Gigabit Ethernet lines, making Ethernet density an attractive feature.

These factors led Alcatel to become an IPTV poster child during the past year, with a slew of announced wins for the 7750 and the 7450 Ethernet Services Switch. Cisco remains the leader in carrier Ethernet market share, of course, with routers like the Cisco 7600 series; in February the company also launched the ME series of switches for metro Ethernet. (See Alcatel Router Revenues Surge and Cisco Arms for IPTV Battle.)

Juniper seemed lost by comparison. Founded as an IP routing foil to Cisco, the company had Ethernet interfaces on its boxes but had never developed an Ethernet switch. As the roar of IPTV publicity increased, investors began browbeating Juniper about when it would answer the Alcatel challenge. Rumors sprouted about Juniper developing high-density Ethernet cards for its routers, or even an entirely new Ethernet system. (See Juniper Readies Ethernet Launch.)

Both turned out to be true. Juniper announced new Ethernet cards at Globalcomm in June, followed by upgraded Ethernet density for its E320 subscriber management platform. (See Juniper Tunes Its Ethernet, IPTV Stories and Juniper Gives Static to IPTV Critics.) And today, the company is launching the long-awaited Ethernet box, in the form of the MX series.

Timing isn't everything
Juniper's Shukla rejects the notion that Juniper is arriving late. Instead, he describes the situation as Ethernet rising up to meet a waiting Juniper.

"The carriers are increasingly asking to bring into the Ethernet segment all the attributes Juniper has been good at," such as scaleability and carrier-grade reliability, Shukla says. He notes that the carrier Ethernet market is far from settled, contending that the industry is just beginning the shift from "trial-oriented networks to large-scale production networks."

Shukla also claims the MX series is part of a "well thought-out plan" originating "some time ago," and not a rush job spurred by investor complaints. Regarding CEO Scott Kriens's past comments that Ethernet is just an interface and not an architecture, Shukla says that's in line with the MX-series plan. "What Scott has always said is that it's really not about Ethernet for the sake of Ethernet," Shukla says, noting Juniper wanted features such as IP routing that aren't found on plain Layer 2 switches. (See Juniper Looks Beyond IPTV.)

Neither Alcatel nor Cisco seems particularly threatened by the prospect of Juniper entering this market.

Alcatel officials, in discussing their release of new routers last week, said they hadn't seen signs of Juniper vying to become an Ethernet aggregation contender. "We haven't seen a new competitive carrier Ethernet switch in customer labs yet -- and service providers haven't been waiting to make decisions," said Lindsay Newell, vice president of marketing for Alcatel's IP division.

Cisco likewise feels secure with its strategy, which leans on the video capabilities garnered in last year's purchase of Scientific Atlanta . Going beyond Ethernet aggregation, Cisco's IPTV and video plans focus on lacing most network tiers with application awareness, allowing video streams to be monitored throughout the IP network, for example. "It will be very difficult for any company to replicate that end-to-end intelligence," says Brendan Gibbs, Cisco director of product management. (See Sci-Atlanta: Cisco's IPTV Lifeline?)

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