Redback Targets AlcaLu – Again!

As each month passes, so Redback Networks Inc. looks more and more like an Alcatel-Lucent (NYSE: ALU) IP wannabe.

Redback, now part of the growing Ericsson AB (Nasdaq: ERIC) empire, has already pitched its SmartEdge edge router as an alternative to AlcaLu's widely deployed 7750 Service Router. (See Redback Beats AlcaLu to French Deal.)

Now it's launching a family of carrier Ethernet products, starting with the SM 480 Smart Ethernet Switch, which, says senior strategy director Alexis Berthillier, "is going after Alcatel-Lucent" -- in particular, the giant vendor's 7450 Ethernet Service Switch. (See Redback Unveils SM 480, AlcaLu Beefs Up Its Routers, AlcaLu Tops $1B in IP Gear Sales, KPN Picks Alcatel Ethernet Gear, AlcaLu Wins Shanghai Deal, and Chunghwa Picks AlcaLu Ethernet.)

The move is all part of Redback's efforts to pack a bigger punch in the Internet Protocol (IP) and Ethernet markets, where both fixed and mobile carriers are spending increasing amounts of their capex dollars: According to Heavy Reading forecasts, the market for metro Ethernet equipment will more than double in the next four years, from $2.3 billion in 2008 to $4.7 billion in 2012. (See Redback Targets 30% Market Share, Redback Goes on the Offensive, and Ethernet Expo Europe: Switch/Router Update.)

Redback says its SmartEdge is already being used for Ethernet traffic aggregation, but the edge router isn't optimized, either technically or in terms of price, for the Ethernet market. "Ethernet transport has been a hole in the Ericsson portfolio that needed to be filled," says Berthillier.

And while the market for Ethernet aggregation switches is already very competitive, with Cisco Systems Inc. (Nasdaq: CSCO), Huawei Technologies Co. Ltd. , and Juniper Networks Inc. (NYSE: JNPR) just some of the other active players in addition to Alcatel-Lucent, the Redback team believes it can use Ericsson's large installed carrier customer base to quickly build market share.

The SM 480 Smart Ethernet Switch
To develop its switch, Redback has taken a leaf out of its main rival's book. In the same way that Alcatel-Lucent simplified its 7750 Service Router to create the Ethernet-oriented 7450, so Redback is subtracting from its SmartEdge line to create the SM family, leaving out Layer 3 VPNs, broadband remote access server (B-RAS) capability, and features such as Deep Packet Inspection (DPI) and Session Initiation Protocol (SIP) support.

But having such a box seems sensible, given the publicity surrounding carrier Ethernet. "It would be a mistake not having a carrier Ethernet product," says Michael Howard, principal analyst with Infonetics Research Inc.

That kind of reasoning even got Juniper Networks Inc. (NYSE: JNPR), a long-time Ethernet holdout, into the game with its EX series. (See Juniper Storms Into Ethernet Switching.)

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