Unisphere Cutting the Edge
Unisphere Networks Inc. today announced a multiservice edge router that promises to bring it into more direct competition with Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) (see Unisphere Releases Edge Router).
Called the MRX, Unisphere's new product is based on technology leveraged from its cancelled core routing project. It's high capacity (320 Gbit/s); it combines the functions of Internet Protocol (IP) router and Asynchronous Transfer Mode (ATM) switch; and also incorporates Multiprotocol Label Switching (MPLS) smarts.
The MRX has the potential to be Unisphere's biggest product yet, because the market for this type of equipment is enormous. Of course, that also means that the competition to grab a share of that market is particularly tough.
Unisphere, however, has already shown that it's capable of dislodging market leaders. Its existing ERX family of edge routers is now top dog in the DSL (digital subscriber line) aggregation and subscriber management market. Unisphere overtook the previous market leader, Redback Networks Inc. (Nasdaq: RBAK) in the third quarter of 2001, according to Infonetics Research Inc., the market research firm.
Most of this success has come from overseas, where Unisphere has been able to cash in on the explosive DSL rollout in Asia and leverage the sales channels of parent company Siemens AG (NYSE: SI; Frankfurt: SIE).
But up to this point the ERX has only competed against lower-end edge routers, including those from Cisco and Juniper. The new MRX should change all that. With 320 Gbit/s of capacity and full wire-speed routing, it marks a major breakthrough in functionality for Unisphere. What’s more, the ATM switching and IP routing could be just the combination U.S. RBOCs are looking for as they migrate their ATM/frame relay networks to IP.
“Tier-one carriers want flexibility in their transition from ATM to IP,” says Kevin Mitchell, an Infonetics analyst.
In short, this new product should open the door to multiple new markets for the company, including sales to existing customers looking to aggregate ERXs, domestic incumbent carriers migrating from ATM to IP, and service providers offering network-based IP services.
Unisphere isn’t the only company developing this kind of all-in-one router. Laurel Networks Inc. is working on a similar concept (see Laurel Moves to Phase Three). Just like Unisphere, Laurel claims it’s building a product that routes IP traffic along with handling ATM and MPLS. Its pitch, like Unisphere’s, is that it will help carriers migrate their ATM-based infrastructures to IP and MPLS.
But unlike Laurel, Unisphere has an actual product with real customers. The company already has about 150 customers using its ERX edge routing platform, and it’s also already shipping the new MRX to several of those customers for revenue, according to John Burnham, vice president of marketing for Unisphere.
While Laurel may be the closest competitor in terms of features, the MRX will likely be competing head to head with full-blown IP routers from companies like Cisco, Juniper, and Riverstone Networks Inc. (Nasdaq: RSTN). The competition here is stiff, to say the least. According to Infonetics, Cisco led this market in the third quarter of 2001 with roughly 52 percent market share out of a total market of $527 million. Juniper came in second at about 12 percent; Unisphere was third with 10 percent. Riverstone, which Unisphere doesn’t acknowledge as a true IP routing competitor, garnered about 9 percent market share.
In terms of speeds, feeds, and port density, the MRX is on a par with its routing competition. But what makes it different from the other routers is the additional services that can be offered, like ATM switching, network-based IP services, and subscriber management.
While Unisphere battles IP routers on one side, it also will be competing with other multiservice switches. Companies like Équipe Communications Corp., Gotham Networks, and WaveSmith Networks Inc. are also looking to help incumbent service providers migrate their networks from ATM to IP. The idea is that most incumbent carriers make their money from ATM and Frame Relay services. While many are considering the move to IP and MPLS, they want to do it in their own time (see The Great ATM Switch Blitz).
The MRX will face competition, as well, from IP service platforms from companies like Celox Networks, Corona Networks Inc., CoSine Communications Inc. (Nasdaq: COSN), Lucent Technologies Inc. (NYSE: LU), Network Equipment Technologies Inc. (net.com) (NYSE: NWK), Nortel Networks Corp. (NYSE/Toronto: NT), and Quarry Technologies Inc. Some of these products compete very well against the MRX in terms of the services offered. Net.com, for example, also handles ATM and can provide network IP services. But what Net.com and the others lack is full routing capability -- a shortcoming that may prove a problem when carriers start deploying more virtual private networks.
As noted, some of the technology in the MRX comes from Unisphere's cancelled core router project that emanated from Argon, one of the three startups that were brought together to form the company (see Unisphere Trips, Stumbles ). Bagging the Argon project now seems like a smart move, says Mitchell. "They would have been too late for the core. And the edge is hot right now."
— Marguerite Reardon, Senior Editor, Light Reading