Report: Juniper Rethinks the Core
"We think Juniper is developing a new single chassis core router that will make it a greater competitive threat," writes analyst Simon Leopold of Morgan Keegan & Company Inc. in a note issued this morning.
The product's release isn't imminent, and might not even happen this year, Leopold tells Light Reading. He doesn't think the router has been put in any customer labs yet.
Juniper's biggest product today, the TX Matrix, strings together multiple T640 boxes to create one big router. While the CRS-1 can do the same multichassis trick, it comes in a bulk package. One CRS-1 chassis can support 16 40-Gbit/s connections, twice the volume of one T640.
The TX Matrix has won the hearts of carriers like China Telecom Corp. Ltd. (NYSE: CHA) subsidiary Guangdong Telecom. But others apparently don't like the multichassis idea. "Some people thought customers were unhappy with Juniper's multibox solution," Leopold says.
Keep in mind, the TX Matrix was announced five years ago and got its formal launch in 2004. (See Juniper Unveils the TX.) It's possible that carriers' tastes have changed since then, particularly as they grapple with issues of power consumption and space shortages.
A new core router might give Juniper a needed boost. Cisco says the CRS-1 racked up $250 million in orders during the quarter ending in April, compared with $150 million the previous quarter. Juniper, meanwhile, scored about $187 million in core-router revenues for the quarter ending in March, by Leopold's estimate.
All told, Cisco appears to be pulling away with the lead. Leopold's report quotes Ovum RHK Inc. numbers that say Cisco owns 61 percent of the core market versus Juniper's 35 percent.
Juniper appears to be the only company poised to challenge Cisco's core-router share at all. While companies like Foundry Networks Inc. (Nasdaq: FDRY) are targeting the core-router market, they don't have Juniper's base of carrier deployments. As for startups... fuhgeddaboutit. (See The Core Was Rotten for Startups.)
Juniper, which never comments on this sort of thing, declined to comment.
— Craig Matsumoto, West Coast Editor, Light Reading