Redback's Got a Mini-Me, Too
Redback Networks Inc. (Nasdaq: RBAK) has turned up the heat on rival Cisco Systems Inc. (Nasdaq: CSCO) with the announcement of the SmartEdge100.
The product is a smaller version of its Sonet add-drop multiplexer, the SmartEdge 800, which allows carriers to consolidate various optical and electrical bandwidth connections in metropolitan networks. In the future, Redback plans to add IP service capabilities.
Redback’s announcement comes two weeks after Light Reading reported that Cisco also plans to introduce a mini-version of its ONS 15454, the ONS 15327, on January 31, 2001 (see Cisco Hatches Cerent 'Mini Me'). Cisco's 15454 product is widely considered the leading product in its category and represents Cisco's fastest-growing optical product line.
“They’re definitely the two leading contenders in this market,” says Tim Savageaux, an infrastructure analyst with W.R. Hambrecht & Co.. “And it looks like Redback is ready for a fist fight in terms of gaining a larger foot print.”
The two companies have been jockeying for market share in the metro network since Redback first started selling its SmartEdge Sonet add-drop multiplexer back in May 2000 (see Redback Unveils Siara Product). While the SmartEdge 800 and the ONS 15454 are designed to ease congestion between the optical backbone and the copper telephone networks within larger central offices and colocation facilities, the smaller versions are designed to extend that bandwidth to smaller telco facilities and office buildings. They also cost less.
Cisco has capitalized on its first-mover advantage in the market, but Redback has still managed to win several key accounts. Just yesterday Redback announced its biggest deal yet, a two-year $120 million contract with Williams Communications Group (NYSE: WCG) (see Redback Lands Deal With Williams ). Other customers include Cable and Wireless (NYSE: CWP), Genuity Inc. (Nasdaq: GENU), and Qwest Communications International Corp. (NYSE: Q).
The Cisco and Redback versions share some characteristics. For one thing, they are the same size -- three telco rack units high (one rack unit is 1.75 inches), 19 inches wide, and 12 inches deep. And they both aggregate multiple traffic types, including TDM (DS1 and DS3), data (10/100-Mbit/s Ethernet), and optical (OC3, OC12, and OC48).
But Redback says that the SM100 offers three times the density that Cisco’s ONS 15327 offers, with eight OC48 (2.5 Gbit/s), 16 OC12 (622 Mbit/s), and 32 OC3 (155 Mbit/s) interfaces. This is an important issue, especially for smaller colocation facilities and multitenant buildings where space is tight and expensive to lease.
Several other companies, including Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Fujitsu Ltd. (KLS: FUJI.KL), also compete in this area. And the competition could get even more intense as players like Ciena Corp. (Nasdaq: CIEN) and Sycamore Networks Inc. (Nasdaq: SCMR) ramp up efforts for metropolitan edge network gear.
But right now, Redback doesn’t seem too worried about anyone other than Cisco.
“When we’re in with customers all we see is Cisco, Cisco, and Cisco,” says Larry Blair, Redback’s vice president for marketing. “Cyras Systems Inc. is a distant third, for sure, and with the Ciena acquisition they’ll get a broader customer base, but in the end it boils down to Cisco and us.”
Can Redback succeed in eating into more Cisco market share? Some say yes.
“Considering that others have successfully battled Cisco in their true area of expertise, there’s no reason to think that they are invincible in this market that is just now emerging,” says Hambrecht's Savageaux.
-- Marguerite Reardon, senior editor, Light Reading, http://www.lightreading.com