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God is Dead

Column
Column
Column
3/26/2001

I’ve said this before, but the optical networking industry is a funny old nobodaddy that moves in mysterious ways. Sometimes it just plain defies logic.

Take the “God box” — the name given to a networking device that supports multiple functions. (The opposite of a God box is a point product: a specialized box that does one thing only. A can-opener is a point product. A Swiss army knife is not, which is undoubtedly why they guard the Vatican.)

The God squad currently includes companies like Alidian Networks Inc., Astral Point Communications Inc., Geyser Networks Inc., and Mayan Networks Inc.. They’re all out there trying to hawk busy little boxes supporting DWDM, Sonet, voice, IP, service provisioning, net management and — puff, puff, gasp! — a bunch of other stuff (see Astral Point Gets In A Mesh and Geyser Emits First Product).

The idea behind God boxes is certainly a logical one: By building disparate functions that would usually be supported using different devices into one chassis, service providers should save money on capex, and service, and support. Logical? Oh indeed. But in practice things aren’t turning out too well for the God-box vendors. They haven’t been bought. They can’t go public in the current financial climate. And they’re having problems landing customers and further investment (see Mayan Ruins?).

What’s gone wrong for them? One problem is that networking isn’t really a one-size-fits-all science. By dividing their resources in order to target multiple technology goals, ye God-box vendors run the risk of ending up with something neither fish nor fowl: A device that does many things — and none of them especially well — is an abomination unto the market.

Back when the God-box crew was formulating plans, this didn’t matter too much. That’s because the kinds of customers they were targeting — startup CLECs and BLECs — don’t hold to the same high standards of reliability and performance as the established RBOCs, ILECs, and IXCs. The idea was that the nouveau niche providers would happily plunk down the money for these cheap’n’cheerful devices.

Unfortunately, as went the Nasdaq, so went these customer prospects. Turns out their arms were too short to box with God. Service providers like Digital Broadband, Fiber Street, GST Telecommunications Inc., and ICG Communications Inc. (Nasdaq/Neuer Markt: ICGX) have all filed for bankruptcy. Others are looking decidedly peaky.

Some vendors have managed to escape the backlash. Cyras Systems Inc. is an interesting case in point. When it was shopping itself around for attention last year, its marketing department put it about that it was developing a multifunction Sonet ADM with built-in IP capabilities. It wasn’t (not even a little bit). The product is actually a straightforward Sonet device — albeit one that packed Schwarzenegger levels of performance into a teeny-weeny frame.

The reason Cyras put out that it had “IP inside” was to position itself against Siara — its nearest competitor — which really was developing an IP/Sonet hybrid. (Incidentally, Redback Networks Inc.’s (Nasdaq: RBAK) fortunes have stumbled since it acquired the Siara device. The curse of the God box, perhaps?) Cyras won the marketing battle, at the same time as its founders were giving the real (pure Sonet) pitch to Ciena Corp. (Nasdaq: CIEN) — which bought the startup for $2.3 billion. Ciena, being a public company, promptly had to clean up Cyras’s marketing materials and admit that the Cyras device did not support IP in any way, shape, or form.

The irony, of course, is that if Cyras had really been working on a God box, it wouldn’t have been bought and would now be sharing the waiting room with the casualties listed above.

Cisco Systems Inc. (Nasdaq: CSCO) is another company that’s flirted with — and sensibly ditched — the God-box conceit. At the recent launch of its tiny Sonet ADM product — the ONS 15327 — on January 31, Sanjay Pol, the director of product marketing for the device, surprised Light Reading by announcing (et voila!) that the device supported IP as well as Sonet and Ethernet via an “onboard protocol stack.” (See Cisco Hatches Cerent 'Mini Me'.)

Apparently, Cisco was as surprised by this revelation as we were — IP isn’t listed on the device’s spec sheets — and the IP capabilities subsequently disappeared (poof!) from the product pitch as quickly as they had arrived.

That’s perhaps to be expected, given that Carl Russo, Cisco’s group vice president of optical networking, and the mastermind behind the company’s push into optical networking, is a card-carrying atheist when it comes to God boxes. His argument (one I happen to agree with) is history has shown that vendors who take the “do one thing and do it well” approach usually win out in the end. Their products are better equipped to meet the high standards of the RBOCs, ILECs, and IXCs — the ones with the big money. These carriers don’t want their networking devices to juggle five balls — they just want them to catch one.

It’s this attitude that furnishes the rationale behind Cisco’s recently launched ONS 15200 series of bog-simple metro DWDM boxes, based on technology Cisco acquired last year from Qeyton Systems (see Cisco Marches Deeper Into the Metro). Indeed, it’s the same attitude that led to the astonishing success of the ONS 15454, the small, straight-ahead, Sonet-based metro networking switch acquired from Cerent Corp. (Cisco has shipped more than 25,000 15454 chassis.)

In other words, Cisco’s overall strategy for deploying optical networks is on the money. Some of its execution isn’t perfect, of course. It’s obvious to everyone — except, perhaps, Cisco employees and some of the really stoopid CSCO shareholders — that the optical switch it acquired when it bought Monterey will never (never!) see the light of day. But if it continues with its current approach of building or buying top-quality point products it could do well.

In fact, long-term, Cisco has a real shot at doing better than its current archrival in the optical world, Nortel Networks Corp. (NYSE/Toronto: NT). That’s because it has expertise in IP — a technology it can use to cobble together all of these disparate devices into a single service-provisioning/creation/management/billing scheme. Nortel, on the other hand, has little to no expertise in IP.

As for the God boxes: When it comes to optical networking, God is dead.

— Stephen Saunders, Founding Editor, Light Reading http://www.lightreading.com

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little_fish_little_pond
little_fish_little_pond
12/4/2012 | 8:40:43 PM
re: God is Dead
Steve,

I would agree with your assessment. I also think these products/companies end up as "jacks of all trades, masters of none". It's a case of compromising on everything (features, port density, reliability, etc.) to get it all in, on time. The God-box is a noble idea with generally flawed execution as well as business cases. Makes for a good story if you're trying to secure VC capital, but in the end, all the customer wants is something that simply does what they want and can be managed.
allidia
allidia
12/4/2012 | 8:40:42 PM
re: God is Dead
Why don't you wait until the Tier 1's ...RBOC's etc.. purchase product in lieu of these products before declaring them dead. As I understand it this won't be known till Q2-02 onward when they start deployment. Also by trumpeting CSCO..(We make it and give it away for free thru financing and 20% margins) you lose credibility as understanding this market. The goal of the carriers is to save money in their networks. God Boxes do this and companies like Allidian and Astral Point have landed the healthy CLEC's to prove it. The Tier 1's are coming and CSCO will have to pay a boatload to buy one of these guys instead of admitting they missed the boat. Kinda like them denying that Juniper is kicking their butts..The truth will set you free...IMO
x1797
x1797
12/4/2012 | 8:40:41 PM
re: God is Dead
I agree with you 100%. well said. I believe that not only Steve, but Light Reading in general loses its credibility by often missing the point. Light Reading appears to be biased towards the big boys and the stealth startups that are in 1st or 2nd round of financing ... other than that, they just look to twist the truth and dig for dirt because the dirt sells.

I agree with you that Steve should have waited to see what the RBOCs do later this year before declaring "God is Dead". By the way, what a terrible name for an article =(

I have to go to Church now =)
melao
melao
12/4/2012 | 8:40:40 PM
re: God is Dead
What i really think will dominate the market in the future is some technology that could bind the functionalities of IP with the reliability of SDH/Sonet.
To be more specific, MPLS is appering to do this.

So what is the point to have several types of protocols on a box when the future will be a protocol that unifies everything ?

and as as i know, Nortel has a lot of IP knowledge. They bought the second largest IP company in 98 and they are the second router vendor in the world. Juniper doesn't come close to Nortel on overall router sales.

I guess what Nortel lacks is a bigger IP switch matrix.

And i really think in the long term future things will be crazy.

Like, we have vendors that have geniouses in their companies developing the weirdest and most fantastic technologies like Lucent's Bell Labs.

Companies that cannot do research like Cisco, but they keep being faster than the others, and buying the best companies that could enhance their porfolios.

And companies like Nortel, Alcatel etc. That are a sort of a mixture. They buy and reaseach a lot.

What i think is, despite on how the market goes, you have to be fast enough to react.
Steve Saunders
Steve Saunders
12/4/2012 | 8:40:39 PM
re: God is Dead
"and as as i know, Nortel has a lot of IP knowledge. They bought the second largest IP company in 98 and they are the second router vendor in the world."

Actually, Nortel has basically given up trying to sell the routers it acquired when it bought Bay. And it resells Juniper routers.

adithyan
adithyan
12/4/2012 | 8:40:38 PM
re: God is Dead
That was just a rumor or more of a sales
pitch. Never was there a reseller agreement.
And for your information, Nortel still
makes revenue out of the BAY enterprise
routers
damned_lu
damned_lu
12/4/2012 | 8:40:37 PM
re: God is Dead
Hey Steve,
Nice orbituary about urself in the front page,
Pal. That photograph of yours very much
resembles God.
glassman
glassman
12/4/2012 | 8:40:37 PM
re: God is Dead
LFLP- Exactly. These boxes, as I like to call "the all-in-one box" really are jacks of all trades and masters of none. I think these start-up optical vendors have gone out and found sweet spots in some vendors' optical portfolios and decided to attack them in those areas---with hopes of being purchased by one of the large companies! Not happening in today's market.
Steve Saunders
Steve Saunders
12/4/2012 | 8:40:36 PM
re: God is Dead

"That was just a rumor or more of a sales
pitch. Never was there a reseller agreement."

Go to Nortel's site, and search on "Juniper." Read the release for yourself.
samTheFish
samTheFish
12/4/2012 | 8:40:35 PM
re: God is Dead
First the typo : Billion instead of Million for Cyras

Comment:
It seems like no one is arguing against all in one boxes in principle (in fact find them logical), its just this nagging underlying assumption that multi function boxes can't be as reliable or perform as well as single function boxes.

What do you base that assumption on? Have you heard (or even better - seen) good or bad things about the startups boxes from the lab? Or do you just assume that the extra complexity of a multi-function box innately makes them less reliable? Or do you think that architecture constraints make it hopeless to try to fit so much functionality in a small package?

You pan the startups because:
-They haven't been bought
-They've had troubles getting customers
-They've had trouble getting financing

I would say all three of those problems aren't (necessarily) a problem with the startups or their business plan but an unlucky consequence of the macro-economic picture. As markets were irrationally exuberent last year, now they are irrationally gloomy. Caution is the word in the economy now, for both customers and potential suitors. In this market, even well thought out and robust products may wither on the vine. (With LR cheering them into the grave with "god is dead" articles)

Time will tell. I'm much more interested in how well (or not) these startups products perform rather than the "cluck-cluck they haven't been bought yet so they're no good" sentiment from your article.

What would really be interesting is if you could test these "new age" products in the lab like your monster router test. I'm sure you have no friends left at these startups so I guess that's out.

-Sam the Fish




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