Redback Targets 30% Market Share

Georges Antoun, the new CEO of router vendor Redback Networks Inc. , has set himself quite a challenge -– to boost his firm's share of the edge router market to an eye-watering 30 percent by the end of 2009. (See DeNuccio Replaced at Redback.)

That's right –- 30 (three zero) percent. That would make Redback the market's number two player, but it's quite a long way from the circa 7 percent market share Redback currently believes it commands.

Talking to Light Reading during the Mobile World Congress show in Barcelona, Antoun said the support of Redback's parent company, Ericsson AB (Nasdaq: ERIC), a new focus on developing products specifically for mobile operators, and increasing demand for Ethernet infrastructure could help Redback become a major player in an edge IP equipment market dominated by Cisco Systems Inc. (Nasdaq: CSCO) (still the clear market leader), Alcatel-Lucent (NYSE: ALU), and Juniper Networks Inc. (NYSE: JNPR). (See ERIC’s IP Ambitions.)

"Ericsson has stepped it up several notches, and we're starting to work closely together," he says, referring to the Swedish giant's decision to create a new Packet Networks division -- or Product Area (PA), as Ericsson is calling it –- with a pumped-up R&D budget of $300 million to develop IP products for fixed and wireless networks. (See Redback Goes on the Offensive and Redback's Role Expands.)

It's not like Redback and its new owner haven't already been collaborating -– Antoun says Redback signed 68 new deals jointly with Ericsson during 2007. (See Redback, Ericsson Tout Deals.)

Now the collaboration will get deeper as the new PA's development team tackles the IP demands of mobile operators, a market worth targeting right now as mobile data volumes start to ramp up as a result of growing 3G service use. "We're seeing the same trends in mobile now as we did in fixed [networks] a few years ago," says Redback's VP of marketing, Arpit Joshipura.

The idea, says Antoun, is to "have special teams working on mobile aspects –- [wireless] backhaul, backbone -– to develop special products," which makes Redback's strategy sound somewhat similar to that of Alcatel-Lucent.

In October 2007, AlcaLu announced a version of its end-to-end IP access/metro infrastructure developed specifically for mobile operators, with a new version of AlcaLu's very successful IP router, the 7750, among the portfolio. (See AlcaLu Targets Wireless Backhaul.)

Antoun has respect for what AlcaLu has achieved, and for the giant vendor's head of IP, Basil Alwan. "Basil's a good guy –- and one of the people I am going to take market share from," laughs Redback's CEO.

But he doesn't just have AlcaLu in his sights. "Cisco is especially susceptible" to competitive attack just now, reckons the Redback man.

And another way to attack those rivals is to pump up Redback's role in the growing carrier Ethernet equipment market. Antoun notes how AlcaLu, with its 7750, and Juniper, with its MX platform, have made significant strides in supporting the Ethernet needs of carriers, and Redback plans to follow suit with developments in the metro Ethernet market. (See Juniper Gains Ethernet Mojo and AlcaLu Tops $1B in IP Gear Sales.)

— Ray Le Maistre, International News Editor, Light Reading

digits 12/5/2012 | 3:47:38 PM
re: Redback Targets 30% Market Share Being shy isn't going to help him reach his target, I don't think.
I expect we will hear a lot from Ericsson and Redback about this space in the coming few years -- I guess phase 1 is to remind folk they're still around and pulling up their shirtsleeves.
Let battle commence.

palaeozoic 12/5/2012 | 3:47:38 PM
re: Redback Targets 30% Market Share If the goal is to grab market share from the incumbents, wouldn't it be best to keep quiet about it? Why tell Light Reading? Why tell your competitors?

Very strange thinking in the part of Mr. Antoun.
digits 12/5/2012 | 3:47:37 PM
re: Redback Targets 30% Market Share In the first draft of this article, published early Monday, I used a market share figure of around 4% for Redback in the edge routing market, as it was the most recent I had. I have since been contacted by Redback who have provided an updated figure of 7 percent, which, when compared with other recent revenue numbers and market share stats, seems reasonable, though I have attributed that number as coming from Redback.

Any market analysts returning from President's Day weekend that can perhaps enlighten us further to the current market positioning of the IP edge players, please get in touch.

The point remains, though -- it's going to be very interesting seeing how Ericsson and Redback can muscle into this already fiercely contested market and build a much stronger presence in a relatively short space of time.

digits 12/5/2012 | 3:47:36 PM
re: Redback Targets 30% Market Share Hi douaibei
Interesting comments - thanks for sharing your views.
You don't mention Cisco -- where do you think they stand in the current mix? Does Cisco need to up its game in terms of carrier functionality?

douaibei 12/5/2012 | 3:47:36 PM
re: Redback Targets 30% Market Share Redback can finally position itself as a service provider IP solutio provider. with the support from Ericsson, Redback can first win more opportunity from Ericsson project which use to be the juniper cheese. second, Redback product was integrated with the formal marconi fix line product line and the ericsson metro ethernet product line, the new IP divison of ericsson can show are end to end solution to the service provider, the big carrier business from ericsson is a huge leap for redback.

the major competitor in service provider will be juniper/alcatel-lu/huawei; juniper E320 is quite interesting product, alcatel 7750 is also very copetitive which is more advanced in the mpls oam, huawei ME60 does provide the bas functionality and SBC or even security feature, but huawei is suffering from they pool solution sale skill set and the weak pre-sales team.

Service provider will have a better to have a serious look at the redback solution which support some good staff like the Virtual router, strong Bas capability.

Fiber Lord 12/5/2012 | 3:47:35 PM
re: Redback Targets 30% Market Share Your estimate of 4% of the Edge Router market seems pretty accurate, both in the most recent quarter and over the whole of 2007. Part of the reason for the belief in 7% is that most router vendors live in denial of the existence of Huawei. Most recently one of the analyst firms reported in Lightreading that Alcatel-Lucent was in second place, which I think is patently wrong. Full disclosure- this analyst is hired by Alcatel-Lucent.

All of 2007 Huawei has closed the gap with both Juniper and Alcatel-Lucent, and in the fourth quarter came in second place in edge router revenue for the quarter. Huawei's router revenue has grown 345% in the past two years, more than either Alcatel-Lucent's or Ericsson/Redback's. Cisco has been strong over this period, but also has lost market share, slightly. Cisco does not seem to be in denial of Huawei's existence, probably because they are so big they run up against them all the time.

By the way, Huawei has been so successful because it has provided complete networks, especially to mobile service providers. These vendors deny Huawei's existence and then follow its lead.
gotojailjoel 12/5/2012 | 3:47:27 PM
re: Redback Targets 30% Market Share YAWN - I remember the mobile partnership with Nokia anyone know how that ended?
miaroper 12/5/2012 | 3:47:16 PM
re: Redback Targets 30% Market Share Well lets look at how a capable box from Timetra became a sizeable force in the edge routing market and took share away from Cisco and Juniper. Alcatel very successfully managed to piece together an industry leading end to end solution for triple play with IPTV leading the charge. With Alcatel selling turnkey solutions and providing services, integration and support they have had a platform and network architecture where they can simply keep repeating business from one provider to the next. This is exactly the case for Huawei too, who have the whole portfolio at hand. If you're Cisco or Juniper you're competing with a single edge box against an end to end solution, if you're a service provider rolling out IPTV do you really want to have the extra hassle of integrating a Juniper or Cisco into the solution for the sake of a few extra features you likely wont use ?

So Ericsson has the opportunity to put together a similar end to end proposition, but it all hinges on the proper integration of the acquired assets, Redback, Entrisphere, Tandberg and Marconi. If they get it right they will be competitve, but it's all about execution now...
Tom-Andrew 12/5/2012 | 3:47:09 PM
re: Redback Targets 30% Market Share George needs to toot his horn, otherwise Redback's product line gets lost in the Ericsson chasm. He needs to secure marketing dollars from Ericsson's pool and its sales teams minds, and a big boggy is the only way to do it.

If he isn't able to meet the targets, which is almost a given, his tenure at this new position may be short lived (probably will be promoted). :)

NPR 12/5/2012 | 3:41:03 PM
re: Redback Targets 30% Market Share With most of the market being in Asia/Pacific, specifically China, I really doubt that Ericsson can get 7% of the Edge Router market. We will see Huawei taking more of the Asia/Pacific market. Further in some markets, I would think lack of VOIP in Redback/Ericsson products would hurt.

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