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Procket's Got a Two-Pronged Plan

Light Reading
News Analysis
Light Reading
7/2/2002

Procket Networks Inc., the secretive and ever-changing startup most famous for the presence of routing expert and founder Tony Li, is aiming to give Cisco Systems Inc. (Nasdaq: CSCO) a run for its money in both the service provider and enterprise markets, according to a source familiar with the company's plans.

Later this year, the company will announce a core Internet router that's faster and can handle more data traffic than Cisco's largest Gigabit Switch Router (GSR), the source claims. At the center of Procket's routing technology is a set of advanced, custom ASICs, being fabricated by IBM Corp. (NYSE: IBM), the source says -- and the integration happening at the chip level will eventually allow Procket to make routers that are not only faster but much less expensive than those in networks today.

But Procket will also develop routers for the enterprise market and will eventually build, not just a dense core router, but a family of several boxes, which can be used at different points in the network, even at the network's edge, the source says. Procket had previously been rumored as giving up the core routing marketing for a piece of the edge (see Is Procket Heading Toward the Edge?).

"Procket has the ability to build boxes that are very large, but they can scale that same technology down and build smaller boxes for the enterprise," says our informant.

The company purportedly aims to support its customers by way of outsourcing its network maintenance to IBM Global Services. "Right out of the box, Procket's customers will be given the same support they get when they buy Cisco routers," says a source familiar with the arrangement.

IBM has existing partnerships with both Cisco and Juniper Networks Inc. (Nasdaq: JNPR), but it's significant that Procket has at least convinced IBM to manufacture its chips. IBM's ASIC manufacturing facility in Fishkill, N.Y., which also manufactures some of Juniper's ASICs, is state-of-the-art.

In the services department, analysts say it's good news that Procket has secured a relationship with IBM to help it support large customers. However, the network planning unit of IBM Global Services also has a strategic alliance with Cisco.

Procket and IBM did not respond to calls by press time.

Another advantage Procket may have over Cisco, according to one source, is that its routing software is newer and more reliable than Cisco's Internetworking Operating System code. Cisco's IOS code was originally built as a monolithic code base, meaning all of its computations and processes were interdependent.

Even if Procket has all these things going for it -- faster chips, support by IBM, and newer, stronger software -- the company still faces a plethora of challenges.

Juniper, Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7), and others all claim software superiority to Cisco, but Cisco remains the dominant router vendor by means of its ability to make up for in marketing and business savvy what it might lack in technology. Also, despite the fact that Cisco can't seem to completely rewrite IOS, Light Reading recently reported that it is working on a major upgrade to its software to increase its resiliency (see Cisco Prepping Monster IOS Upgrade).

Then there are the mega-forces: With the core router sector undergoing its biggest downturn in years, and public companies such as Cisco and Juniper scrapping over a declining market, is it even the right time for a new core router startup?

There always seems to be room for improvement on how efficiently a router can perform all its tasks, says Frank Dzubeck, president of Communications Network Architects: "What we're boiling ourselves down to is esoteric. It's speeds and feeds. We're looking at an industry that is going to commoditize. The router of the future will probably be made by Intel Corp. [Nasdaq: INTC], as all the routing functions commoditize to the point of being able to fit on a network processor."

For it to be a success, Procket also must face some extensive testing of its software and hardware by a major service provider to validate what our sources have claimed regarding its technology. Little is known about Procket's trial activities now; it may well be in trials already, but it is not yet known with whom.

Indeed, Procket has several key ingredients of a successful startup: a strong technical team, an experienced board of directors, and investors that have pumped $272 million into the company as of June 2001 (see Li Named to Procket's Board). But it still has a long way to go in order to be a commercial success.

As Dzubeck puts it: "Even if you've got the best software engineers in the world, working in a laboratory environment with a potential customer is where the shakeout really begins."

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com Want to know more? The big cheeses of the optical networking industry will be discussing this very topic at Opticon 2002, Light Reading’s annual conference, being held in San Jose, California, August 19-22. Check it out at Opticon 2002.

Register now and save $500 off the registration fee. Just use the VIP Code C2PT1LHT on your registration form, and deduct $500 from the published conference fee. It's that simple!

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net_exprt
net_exprt
12/4/2012 | 10:10:16 PM
re: Procket's Got a Two-Pronged Plan
ASICs developed by IBM? sounds similar to the PXF used on the 7600, 7200, ESR, UBR, etc...
Neophone
Neophone
12/4/2012 | 10:10:15 PM
re: Procket's Got a Two-Pronged Plan
i heard they have won 2M case in japan...
are they really shipping box now?..
asmo
asmo
12/4/2012 | 10:10:10 PM
re: Procket's Got a Two-Pronged Plan
Lots of companies use IBM to do the Fab on their packet forwarding engines, Cisco is just one of them.

Asmo
toohideous
toohideous
12/4/2012 | 10:10:06 PM
re: Procket's Got a Two-Pronged Plan
Well, I should say it's the same as everyone else's plan. With service providers not spending any cash, enterprise is likely to be on every company's wish list these days...

Good luck!

-th
HWxPERT
HWxPERT
12/4/2012 | 10:10:03 PM
re: Procket's Got a Two-Pronged Plan
I'm fed up with all this Procket a**-kissing by LR!

This is a company that has consumed a hoard of cash, generated a mountain of hype, and not delivered one working product. They are fast becoming an "old" startup.

How can they be compared to anyone with real, paying customers?
pulpystump
pulpystump
12/4/2012 | 10:10:02 PM
re: Procket's Got a Two-Pronged Plan
HWxPERT writes:

> I'm fed up with all this Procket a**-kissing by > LR!

> This is a company that has consumed a hoard of > cash, generated a mountain of hype, and not
> delivered one working product.

Hear, hear.

Why the "anonymous source" Procket lovefest all of a sudden, when LR itself has published evidence of turmoil and strategic probs at the co.?

http://www.lightreading.com/do... - bigwigs out of Procket
http://www.lightreading.com/do... - change in product strategy

There's a conspicuous absence of critical analysis in this article. There are all kinds of woes at Procket that any analyst in this space could happily detail if a journalist were to ask 'em. ASIC probs, political infighting, egos, engineer turnover and more.

There's something else that doesn't make sense here. Consider: going head to head with Cisco with boxes that are only "faster" and "cheaper"? That can't be the whole story. They wouldn't have raised $270M+ just for this. There's already a faster, cheaper Cisco in the core and edge - Junisphere! Duh.

This article smacks of a desperate PR plant/leak by Procket. How can anyone put any stock in it when the only "source" is unnamed?

Call it the conspiracy theorist in me. This article ain't news. It's someone spinning.
digerato
digerato
12/4/2012 | 10:10:02 PM
re: Procket's Got a Two-Pronged Plan
It is not "significant" that IBM is fabbing the ASICs -- if, indeed, that is the case. IBM is in the fab business -- they will fab anyone's ASICs so long as they can stump up the cash.
tsat
tsat
12/4/2012 | 10:10:01 PM
re: Procket's Got a Two-Pronged Plan
Does anyone really think that routers will all run off the same commodity network processors in the next 5 years?

I find that hard to beleive...

-tsat
digerato
digerato
12/4/2012 | 10:10:00 PM
re: Procket's Got a Two-Pronged Plan
jamesbond wrote:
"There is no way Procket can build crap cheaper
than Cisco. Any company wishing to do this
must use off the shelf hardware parts, not
design ASICS etc. You can never have that
much volume to justify design, fabrication,
manufacturing, testing etc involved with ASICs."

Let's take a reality check here. You can't build a router that switches large numbers of high speed interfaces (OC-192) at wire rate *without* ASICs, as well as very clever memory techniques. A 64-byte packet at OC-192 rate arrives at a router interface in just a few nanoseconds. Show me the Intel processor and memory architecture -- even one on paper -- that can deal with this.

Now, let's talk about volume. You need to have volume into the millions of chips to start getting the price down significantly, and not even Cisco can get that kind of volume because core routers are low volume -- thousands of units. The fixed costs of the chip industry are such that only very high volume can start to impact the per-unit price. And you just don't sell multi-million dollar high end routers in the same kind of volume as $500 PCs.

"We are getting close to a point where all the
necessary ingredients can be bought from Intel
(except maybe for Switch fabric). I wish
somebody would build and sell a general purpose
chasis with a very-high throughput backplane."

This is patently BS (see above). Also, there *is* a company selling a router based on Intel parts -- it's called Bivio. They have an off-the-shelf switch fabric, Intel PC architecture and the OS is Linux. This router can beat a Cisco 3660 -- its main competition -- in forwarding speed, but it doesn't have the 3660's feature set. They're not targetting the high end router space because the idea is laughable, but, even so, Bivio shows no signs of being successful.

Finally, because Cisco is the market share leader, they have the most to lose from a price war. The fact that they have 6 times the market share of Juniper means they lose 6 times as much money if the price drops. There is no volume game to be played.

Digerato
jamesbond
jamesbond
12/4/2012 | 10:10:00 PM
re: Procket's Got a Two-Pronged Plan
There's already a faster, cheaper Cisco in the core and edge - Junisphere! Duh.

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

I am not sure that Junisphere is cheaper. Cisco
can afford to sell their stuff at very low price.

There is no way Procket can build crap cheaper
than Cisco. Any company wishing to do this
must use off the shelf hardware parts, not
design ASICS etc. You can never have that
much volume to justify design, fabrication,
manufacturing, testing etc involved with ASICs.

We are getting close to a point where all the
necessary ingredients can be bought from Intel
(except maybe for Switch fabric). I wish
somebody would build and sell a general purpose
chasis with a very-high throughput backplane.

Hopefully that day isn't far.
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