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Optical/IP

Multiservice Edge Market Disappoints

What was supposed to be a hot router market has turned tepid, vendors say, as the multiservice edge isn't banking the kinds of sales vendors had hoped for.

Last year saw a rash of specialized multiservice edge routers being launched in response to carrier requests. But now it appears the market for these routers won't hit high volumes until next year.

"It hasn't evolved like we all thought it would," says Scott Stevens, vice president of system engineering at Juniper Networks Inc. (Nasdaq: JNPR). "It's what [carriers] said they wanted, but they haven't been proving it with their wallets."

Stevens was talking mostly about the legacy Layer 2 market -- where multiple networks of Asynchronous Transfer Mode (ATM) or Frame Relay traffic would join into a single Internet Protocol (IP) core to be carried by Multiprotocol Label Switching (MPLS). But some in the business are saying the multiservice edge in general is off to a slow start.

"It hasn't really panned out like people had hoped, partly because some of the capability can be done by using [previously released products from] router vendors like Cisco [Systems Inc.] (Nasdaq: CSCO) and Juniper," says Mark Seery, an analyst with RHK Inc.. "But the bigger issue is that the migration, moving people onto common edge platforms for Layer 2 and Layer 3 services, has not happened at the big incumbent vendors yet."

So many carriers preached the multiservice edge that the concept got its own abbreviation: MSE. Vendors, besides Juniper, pointing products at the MSE have included Alcatel (NYSE: ALA; Paris: CGEP:PA), Ciena Corp. (Nasdaq: CIEN), Hammerhead Systems Inc., Laurel Networks Inc., Lucent Technologies Inc. (NYSE: LU), Nortel Networks Ltd. (NYSE/Toronto: NT), Riverstone Networks Inc. (OTC: RSTN.PK), and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA).

Some of those vendors' systems, such as Juniper's M320, were crafted specifically for the MSE. Nortel built its MPE 9000 router, internally called Neptune, to handle the edge-router requirements the company was hearing from carriers. Lucent likewise put its CBX 3500 out with an eye toward this market (see Neptune Arrives and Lucent Joins the Edge Crowd).

One notable company that didn't build an MSE box was Cisco. Officials there have insisted the 7600 and GRS 12000 routers, already targeted at the edge, are good enough for the MSE market.

Carriers are definitely interested in the unified IP core, and they're anxious to move traffic off their old networks (see Executives Converge on Convergence). So why wouldn't they jump at buying MSE routers?

For starters, some believe edge-router spending has taken a back seat to glamorous access projects such as SBC Communications Inc.'s (NYSE: SBC) Project Lightspeed or BellSouth Corp.'s (NYSE: BLS) IPTV buildout (see SBC Sheds Light on 'Lightspeed' and Alcatel, Redback Score at BellSouth).

"Broadband represents a way to generate new revenue," says one equipment-vendor executive, requesting anonymity. "The MSE, at the end of the day, is more a cost-reduction strategy and is more about selling to businesses." With most businesses "fully served," it's easier for carriers to focus on consumers, who can be tantalized with promises of video and real-time gaming, the source says.

That doesn't mean the MSE market is dead. It's just not likely to accelerate until 2006, says RHK's Seery.

Part of the problem has been money. "Certainly in North America, the IXCs couldn't spend as much as they would like because they were having financial problems, and the consolidation is going to clear up those issues," Seery says -- referring to the announced mergers of AT&T Corp. (NYSE: T) into SBC Communications Inc. (NYSE: SBC), and of MCI Inc. (Nasdaq: MCIP) into Verizon Communications Inc. (NYSE: VZ) or possibly Qwest Communications International Inc. (NYSE: Q). (See SBC to Buy AT&T for $16B, Verizon Wins Tussle for MCI, and Qwest to MCI: 'Pretty Please?'.)

Carriers may also face the problem that some customers don't care about migrating to this newfangled network -- particularly if their telecom services are working just fine.

"Moving customers onto the new service networks is ultimately up to the customer and not the carrier, unless you can do it in a transparent way," Seery says.

For some MSE router vendors, the wait is apparently too much. Network Equipment Technologies Inc. (net.com) (NYSE: NWK) is shifting its emphasis to enterprises rather than carriers, and Laurel seems to be putting more focus on its broadband remote access server (B-RAS) capabilities (see Net.com: Back to the Enterprise and Laurel Looks to Europe).

— Craig Matsumoto, Senior Editor, Light Reading




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jepovic 12/5/2012 | 3:25:15 AM
re: Multiservice Edge Market Disappoints There are two types of MSE. Either you get an advanced router (as Juniper), with very little extra functionality above the normal router platform. Or you get the BRAS, like the ERX, with lots of per-user stuff, but with limited throughput. Either way, you have to pay lots extra.

Basically, the problem with the MSEs is that you can 95% of the interesting functionality in regular routers, at 50% of the price.
paolo.franzoi 12/5/2012 | 3:25:14 AM
re: Multiservice Edge Market Disappoints
I think the old cap and grow model is gone.

The new cap and grow is going to be done by the new network replacing the old. This new network does not require an MSE. I think this results from carriers calculating the cost of replacing the old network and determining that this is too much money.

The other thing I love is that gaming is brought up as an application all the time. Do any of these people game on-line? Apparently not. They should try Everquest or Counterstrike online before they make commentary that gamers will pay for QoS.

seven
arch_1 12/5/2012 | 3:25:12 AM
re: Multiservice Edge Market Disappoints This was completely predictable, and predicted.

Legacy networks (i.e., anything except the Internet) and legacy protocols (i.e., anything except IP) are a shrinking market. The only reason customers continue to use them is inertia. The instant you make a change to an operational network that requires any action whatsoever by the customer, the custoemr will re-evaluate the protocol and/or network, and will most likely switch to Internet/IP.

So, The MSE solves a non-problem.

The one current exception to all-IP is cellular telephony, but even this traffic will begin to shift to IP as WIFI-enabled cell phones become available.

NOTE: shrinking legacy revenues do not necessarily imply shrinking legacy networks, at least initially. But it will happen. The last host was removed from the SPRINT X.25 network in January 2005.
DZED 12/5/2012 | 3:25:10 AM
re: Multiservice Edge Market Disappoints It seems everything is migrating to IP, voice, TV, data, anything else?

Has anyone considered the disadvantages? Are there any? I would have thought a server targeted virus attack could have some nasty consequences.

Non-IP systems are at least overload tolerant, and fairly robust, if the system is overloaded it continues to function but not everyone can get through at once.

I assume an IP based system would simply grind to a halt so everyones data gets delayed/garbled ie no-one can use it.
OldPOTS 12/5/2012 | 3:25:10 AM
re: Multiservice Edge Market Disappoints I think we have a definition question!?

OldPOTS
rjmcmahon 12/5/2012 | 3:25:10 AM
re: Multiservice Edge Market Disappoints Legacy networks (i.e., anything except the Internet) and legacy protocols (i.e., anything except IP) are a shrinking market. The only reason customers continue to use them is inertia. The instant you make a change to an operational network that requires any action whatsoever by the customer, the custoemr will re-evaluate the protocol and/or network, and will most likely switch to Internet/IP.

So, The MSE solves a non-problem.


I'm confused. My understanding from the article is that the MSE would be used to transition legacy networks over to a modern core network. Does the disappointment in the MSE market imply that people aren't transitioning but are living with the legacy cores? Or is this a misinterpretation?
bobcat 12/5/2012 | 3:25:09 AM
re: Multiservice Edge Market Disappoints MSE devices were a patch fix to fill some gaps in the Service Provider market offerings while they tried to figure out what they needed to make earnings and, how their current networks could morph into future services. To build a new network with multiservice edge devices or not? Obviously NOT. Basically it is a wait and see if wireless would take off or not.

In other words even if you need MSE devices, to what degree? and geographically positioned where? and what will be the pay off to the expense? Will they really be needed in the next five to ten years?

Do you really need them (MSE)if you build a new network, assuming you already know the short commings of your existing networks.? What will be the future services that will return a profit as you grow with the least amount of expenditure and build out?

Where do the wi-fi access networks fit in? and, Cable company services competition do you really want to go head to head with cable services and offerings and how? It better be cheaper than the cable offerings. I think wireless backhaul upgrades is probably a better integration of MSEs given profit is still the word of the day. That too will be short lived. So why not forgetaboutit.

jepovic 12/5/2012 | 3:25:09 AM
re: Multiservice Edge Market Disappoints Legacy networks (i.e., anything except the Internet) and legacy protocols (i.e., anything except IP) are a shrinking market. The only reason customers continue to use them is inertia. The instant you make a change to an operational network that requires any action whatsoever by the customer, the custoemr will re-evaluate the protocol and/or network, and will most likely switch to Internet/IP.

So, The MSE solves a non-problem.

I'm confused. My understanding from the article is that the MSE would be used to transition legacy networks over to a modern core network. Does the disappointment in the MSE market imply that people aren't transitioning but are living with the legacy cores? Or is this a misinterpretation?

************************************

That was the idea, but operators prefer to let their legacy networks slowly shrink and die, rather than making a messy migration to an MSE-based network. A migration to MSE will affect product specs, if only slightly, it will definitely affect IT systems, and it will affect customers. It's just not worth it, even if it's technically possible.
paolo.franzoi 12/5/2012 | 3:25:08 AM
re: Multiservice Edge Market Disappoints
I think service delivery over IP is mixed up with service delivery over the Public Internet.

The public Internet will remain a best effort environment. Attempts to change it will deal with such complexity it will be impossible. In many ways, a victim of its own success.

The move will be to private IP networks that connect subscribers to premium services. These services will be delivered and charged for. Will people pay for video because it is over IP? No. Will they pay for video delivery to their TV? Yes, there is clear evidence of that.

This is a rather dramatic technological shift that is occuring and will not be bumpless. There are lots of issues to be resolved, but the tectonic plates of network architecture are moving. I think what has caused this shift is two things:

1 - Dramatic increases in the bandwidth per subscriber and;
2 - Aggresive competition for bread and butter services.

10 years from now (to pick a long time away) does anybody believe that the revenue and cost structures that we have today in a service provider are even a choice? Typical large carrier migrations are a thing of the past. They simply cost too much and take too long.

seven
bobcat 12/5/2012 | 3:25:08 AM
re: Multiservice Edge Market Disappoints >>It seems everything is migrating to IP, voice, TV, data, anything else?

That remains to be seen. After all, what are you willing to pay for?

>>Has anyone considered the disadvantages? Are there any? I would have thought a server targeted virus attack could have some nasty consequences.

Hmmmm. Cost is always a disadvantage not just purchase of equipment, but also billing application issues and man power associated with maintence and marketing/sales and tech support.
Virus attacks and hackers are a cost expense and constant irritation also.
Virus attacks are a part of doing IP buisness now. Already factored in.

>>Non-IP systems are at least overload tolerant, and fairly robust, if the system is overloaded it continues to function but not everyone can get through at once.

Over simplified but I get the point and, agree to an extent but IP QOS and Diff-Serv etc., not to mention routing protocols like OSPF and others provide the same reliability. No?

>>I assume an IP based system would simply grind to a halt so everyones data gets delayed/garbled ie no-one can use it.

Wrong assumption. There are QOS guarentees in IP and transport for IP can still be offered over a variety of transport services such as ATM, PPP over sonet, or RPR all of which support APS (automatic protection switching) in various flavors.
Vo-IP is starting to get some real attention by carriers after years of delay. Cable networks are interested in offering IP services over copper and, fiber.
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