Too Much Terabit?
OK, I’m exaggerating –- but not much.
Time for a re-cap: Until now, two players have dominated the terabit market: Cisco Systems Inc. http://www.cisco.com which has 80 percent of the market for core Internet routers, and Juniper Networks Inc. http://www.juniper.net, which has pretty much all of the rest.
Then you have the “second tier” terabit players. These include the Johnny Continentals (Alcatel NV http://www.alcatel.com and Ericsson AB http://www.ericsson.com); East Coasters (Avici Systems Inc. http://www.avici.com) New Joyzy-ites (Lucent Technologies Inc. http://www.lucent.com), and folks from North of the border (Nortel Networks Inc. http://www.nortel.com). These companies haven’t shipped more than a handful of products.
So far, so dull. A full house: “first movers” (who won) on “also rans” (who haven't).
But now, all of a sudden, an interesting--it falls short of “fascinating”--thing is happening: a whole slew of new terabit players are getting ready to pile into the market.
They include Charlotte's Web http://www.cwnt.com, Foundry Networks Inc. http://www.foundry.com, IronBridge Networks Inc. http://www.ironbridgenetworks.com, and Unisphere Solutions Inc. http://www.unisphere.cc.
A third tier of terabit? What have they been smoking?
My knee jerk reaction is to put this third column down to too many VCs, with too much money and too little sense -- and to assume that these companies have almost no chance of making a go of it. (The words “snowball’s,” “chance,” “in,” and “hell” all leap to mind).
But a closer look at the market reveals that three factors could play in the latecomers’ favor.
First, the products shipping today from Cisco and Juniper aren’t really terabit at all – they’re multi-gigabit routers. The definition of a terabit product is one whose external port capacity adds up to in excess of one terabit of traffic. Using this definition you can work out that Cisco’s fastest router has 150 Gbit/s of capacity, and Juniper’s has even less. That means a lot of service providers still want a honking great router for Christmas.
Second, a lot of those tier two players have dropped the ball on their router development programs. Alcatel, Ericsson, and Lucent all coughed up the cash to buy high-speed router startups, rather than develop their own. Those products are now residing in the “where are they now?” file. That means there’s a lot less competition for the tier three folk than by rights there ought to be.
Third, the new players all have a USP – or unique selling point – that they say will provide them with an entry point into the market. For instance, as well as routing IP, Charlotte’s Web can also support time division multiplexing (TDM)-like connections -- with fixed, guaranteed levels of latency. That's actually a big deal, because it means that the router can be used to carry voice and video traffic without compromising quality.
Of course, none of this means they’re a shoe-in for success. In any new networking market, the first mover advantage – the one being enjoyed by Cisco and Juniper -- is a bit like gravity: it’s a tough thing to fight.
And tier three players have their own issues to overcome. Some of them are so big and meaty that they can’t meet strict Bellcore standards for power consumption and heat generation. Others are so heavy that they can cause damage to the raised floors in service providers’ central offices (COs) or points of presence (PoPS).
So who will win? I certainly wouldn’t bet against Cisco or Juniper, but these days I’m starting to believe that this will at least be more than a two horse race.
--Stephen Saunders, US editor, Light Reading, http://www.lightreading.com