Alcatel Router Revenues Surge
Figures from Synergy Research Group Inc. show Alcatel's 7750 and 7450 models collected $88.8 million in revenues during the third quarter, up from roughly $35 million in the second quarter.
Yes, sales more than doubled in three months.
"That shocked a lot of people," says Ray Mota, the Synergy analyst behind the report. Mota queried some major carriers, though, and he says they're backing up the numbers.
"It's not a spike," asserts Basil Alwan, president of Alcatel's IP division. "This was the decisive quarter to the point where we are a head-on challenger" to (Nasdaq: CSCO) and (Nasdaq: JNPR), he says.
What has Alcatel particularly jazzed is that it took second place in Synergy's "IP edge aggregation routing" category, with 23.6 percent market share in the third quarter -- surpassing Juniper's 19.7 percent but still trailing Cisco's 45.9 percent. (See Alcatel Seizes #2 Position.) Alcatel's IP edge routing market share stood at just 3.1 percent after the first quarter of 2005.
But Juniper notes some extenuating circumstances. In the third quarter, Juniper's M7i and M10i routers were taken out of the service provider category and into the high-end enterprise category. So Alcatel's bump in revenues was accompanied by a decline in what Juniper was reporting: "We moved a substantial amount of revenue out of that category," a Juniper spokeswoman says.
She notes that Synergy still ranks Juniper second in all service provider edge routing, a superset of the IP edge category. Service provider edge routing in the third quarter was led by Cisco with a 48 percent share, followed by Juniper's 27 percent and Alcatel at roughly 14 percent, she says.
Note, also, that the numbers can be sliced up any number of ways. Alcatel's 7450 is an Ethernet box lacking full IP routing functionality. So some might argue it's not suitable for any "IP" category, although it's often sold in tandem with the 7750.
Even with such caveats, the numbers suggest Alcatel's IP division, launched after the TiMetra acquisition, has kicked into gear. Alwan claims the 7750 and 7450 have racked up 90 customers, 50 of them announced, with wins including (NYSE: BT; London: BTA), (NYSE: CHA), and (NYSE: SBC). (See Alcatel Picked for BT's 21CN, Alcatel Wins China Telecom Deal, and Scaling IPTV: Progress at SBC .)
Alcatel and Redback Networks Inc. (Nasdaq: RBAK) both appear to be on the rise in the broadband edge, says Heavy Reading analyst Rick Thompson. (See How Redback Won BellSouth.) Alcatel's port density and the integration of policy management have helped it in the video market, in particular, he notes.
Alcatel's recent strength in IPTV wins might have been a factor in Cisco's decision to acquire Scientific-Atlanta Inc. (NYSE: SFA), a move that could boost Cisco's prospects in service-provider video. (See Sci-Atlanta: Cisco's IPTV Lifeline?.) But Alcatel officials note that triple play wins account for only half their router revenues, implying the 7750 has proven attractive in normal routing cases as well.
Alcatel may have to work hard to maintain its presence in the IP edge. "That space is extremely challenging," Mota says. "They have to stay innovative, like Juniper in its earlier days."
Alcatel is trying. The company has been adding software features to the platforms and has increased Layer 2 support on the 7750. (See Alcatel Adds to MSE , Alcatel Enhances IP Tech, and Alcatel Taps Layer 2.)
— Craig Matsumoto, Senior Editor, Light Reading
That's a heckuva long post. I'll try and dissect it.
MS: 1) you are suggesting (intentionally or not) that because the IGP development has been done for MPLS then the hard work of building a IPv4 router is complete.
Yes. In a sense, I question that a box has to run BGP to be a router. Or PIM (as one earlier post suggested, a router must support multicast routing).
Take classical MPLS. After the hard work of digesting an IGP is completed, that forwarding state is captured in a next-hop label forwarding entry for a FEC. That's just geek for a bunch of routes map to a next-hop, and here's my shorthand for that route: it's a label.
MS: 2) that the control plane is tightly coupled with the data plane.
I don't care that a control plane uses the dataplane. That only means protocols run inline with data. That doesn't define routing.
The control plane drives the data plane actions.
I don't quite know what to do with this point. It doesn't refute or relate to anything I said.
MS: 3) that the scenario you describe is analagous to what you wish to contrast it with (i.e. what is good for the goose is good for the gander)
So we come to the nub of the question. MPLS, and in particular, the various applications of MPLS, cause a bit of a problem. They don't look like hop-by-hop forwarding, the way IP does things, with RSVP being semi-connection oriented, and PWs creating these strange edge boxes that use routing protocols to do switching functions.
I think GMPLS LSRs are routers. I think looking at the control plane information of an aggregate network topology, and then determining the forwarding path of traffic based on that information is routing.
Ethernet switches run multi-node control plane protocols, and aggregate that knowledge into a topological structure, a spanning tree. But they forward based on local knowledge of incoming and outgoing ports, VLAN contexts, and MAC address learning. That's very different.
Here's another example: PNNI based SVCs vs. PVC = routing vs. switching.
If you wire up a cross-connect with local information, that's switching. If you wire it up with some aggregation of information derived from distribution of topological information via a control protocol, that's routing.
That's my perspective.
BTW, other defintions of routing exist: in laying down streets, wiring, components; in other protocols, e.g., connection-oriented SNA, XNS, DECnet. I think they fall closer to my generalized definition of a router.
-desi