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Optical/IP

Volpi Touts Routing Opportunities

Cisco Systems Inc. (Nasdaq: CSCO) expects to recapture market share in the core router market with its CRS-1 product, and the company sees growth in both the core and edge routing markets, said Cisco's routing chief today.

The CRS-1 core router is starting to build revenue, and Cisco expects growth in the edge routing and cable markets to remain between 15 and 20 percent, said Mike Volpi, senior vice president and general manager of Cisco's Routing Technology Group, on a conference call hosted by Lehman Brothers this afternoon (see Mike Volpi, Cisco Systems).

”We have a lot of customers trying it, and we have actually buying customers from MSOs to European PTTs and Japanese operators,” said Volpi of the CRS-1 (see Cisco Scores CRS-1 Customers, Cisco's CRS-1 Passes Our Test, and LR Best Product Finalists Revealed). “The product has gotten flying marks.”

The Cisco executive was questioned by Lehman Brothers analyst Tim Luke, as well as some of Lehman’s clients, about overall growth prospects for IP routing in the enterprise and carrier markets.

Volpi said the CRS-1 is now generating “millions” in revenue and is ahead of plan. He expects it to help Cisco see marketshare gains in the core router market by the fourth quarter of this year. Although Volpi said he could not talk about quarterly results, he left the impression that Cisco is seeing some financial benefit from the CRS-1.

Cisco sees more growth in the services edge routing markets, which it sees growing at 20 percent, than in the core service provider sector, where it expects growth at an annual rate of 15 percent, said Volpi. The biggest opportunities are coming in the cable television and wireless markets, where he thinks those providers that are shifting increasingly to IP video technology should boost IP routing technology.

Volpi took some shots at the competition, pointing to Juniper Networks Inc. (Nasdaq: JNPR) and Alcatel (NYSE: ALA; Paris: CGEP:PA) as the major competitors in the services edge market. Volpi said these vendors are offering products with inferior features and are competing primarily on cost.

"It’s hard to use a low-price strategy in a high-touch market," said Volpi. Of Alcatel’s products, he said: "They’re not very feature rich. They have had problems with some customers because promises haven’t been met.”

A spokesman for Alcatel denied that Alcatel had any problems with customer installations. “Our products are selling based on their own merit,” he said.

In the services edge routing market, Volpi said Juniper “hasn’t demonstrated a coherent strategy” with its J-series line of products and that they are an “inferior” product that cannot compete with Cisco's feature set.

"There might be a service provider that wants to stick to a single vendor, in which case they might buy an inferior product."

The mud-slinging is somewhat uncharacteristic of both Cisco and Volpi, as Cisco rarely makes comments about the competition. But the company has been getting a little more feisty lately (see Cisco Heckles Infranet Initiative).

A Juniper spokeswoman, when reached for comment, said Juniper was having success in the edge router market:

"What matters to Juniper is what our customers -- not Cisco -- think of our edge routers, such as the proven stability and reliability of the Junos software. Customers’ satisfaction is evidenced by worldwide market share in edge routers growing every quarter.”

Volpi did concede that there were competitive pressures in the market, and that Cisco might lose some market share. He said what’s important for the edge router market is for it to grow as a whole. He sees the biggest opportunity to be video in the MSO market, which is driving cable providers to move to IP architectures. ”If you move video over IP, there’s a massive shift and a huge opportunity. The opportunity... is immense.”

— R. Scott Raynovich, US Editor, Light Reading

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Honestly 12/5/2012 | 3:19:09 AM
re: Volpi Touts Routing Opportunities In the same article he says he is taking market share, but concedes there is competition. There was either a LR story and several Wall St reports that quoted Volpi as saying Cisco wqs going to take back core share in Q 2. So which is it Mike.? Millions in revenue for CRS-1. 2.?, and Softbank bought their CRS art 85 off. Lastly, Rumor has it that Juniper will wipe the floor with Cisco as Juniper could wiin big, or much bigger at BT very soon. If not, fine, If so, you are a flat out liar. Research what he said about Q2 folks,because he just changed his story. Sorry Mike, some of us pay attention and don't buy your hype
tmc1 12/5/2012 | 3:19:09 AM
re: Volpi Touts Routing Opportunities Mike Volpi went on to say that Alcatel and Juniper "snored in their sleep, always leave the toilet seat up and they never call you when they promise they will".

"oh yeah, they don't turn their cell phones off in movie theaters either!"

;)
light-headed 12/5/2012 | 3:19:09 AM
re: Volpi Touts Routing Opportunities ...Needs to check his sources. He is throwin' around some FUD like a two-bit sales guy while deals are slipping through his fingers. ISP/ILEC/Carrier customers are not like enterprises - they actually test the boxes so they know when the FUD doesn't stick. This just shows how desparate cisco is getting. They don't like REAL competition - just niche players like FDRY, EXTR and RSTN.
zeudude 12/5/2012 | 3:19:08 AM
re: Volpi Touts Routing Opportunities Clear signs of nervousness at Tasman , and very cheap shots from an executive...with not so credible statements eitherG«™.

Feature richness.... on paper, and as long as you donG«÷t need performance or stability G«Ű hang in there mister customerG«™.until IOS XR makes it to the edge boxes with maybe 30-50% of IOSG«÷s features (but still more stable then IOS after very few pre-production trials).

Question: why wasnG«÷t Cisco part of the selected few in recent 3-play infrastructure rollouts announcementsG«™oh sure, I forgotG«™the G«£largeG«• opportunities are with Cable companiesG«™G«™

All very good themes for the next JNPR cartoons ;)
opticalwatcher 12/5/2012 | 3:19:08 AM
re: Volpi Touts Routing Opportunities I'm not sure how they price these things but doesn't 'millions in revenue' mean that they sold two or three CRS-1's? Wouldn't they need to sell about 1000 to even think of recouping their costs?
addie_list 12/5/2012 | 3:19:06 AM
re: Volpi Touts Routing Opportunities This is coming from the mouth of a man who has copied most of the features in his CRS IOX from Junos.
IOX went from the route-map to junos policy-options

Nobody can beat the features supported by Jnpr.....Cisco realized it and incorporated it in the IOX.

edgecore 12/5/2012 | 3:19:06 AM
re: Volpi Touts Routing Opportunities Granted it took a long time to get IOX out...but it was a huge job to go from a monolithic architecture running mostly on MIPS, to an architecture based on QNX' Neutrino kernel running mostly on PowerPC..and with SMP support in CRS1.

What is to say that today's IOZX architectute cannot catch up and even surpass JunOS, which is FreeBSD (or NetBSD) based?

EC

ozip 12/5/2012 | 3:19:06 AM
re: Volpi Touts Routing Opportunities Face it, most of these "features" are designed to make customers buy new kit. Almost all of their customers building a network could deliver service just as effectively with products from either vendors. Those customers who need a "special" features that only one vendor can provide should revisit their service architecture to avoid the slippery slope. Can you believe this, I actually heard of a service provider who was installing a new, albeit realitively small network and Cisco had talked them into using E-IGRP as in IGP. Now there's real differentation.....;-)
signmeup 12/5/2012 | 3:19:06 AM
re: Volpi Touts Routing Opportunities Wow, the junites are on the defensive that's for sure. 7 negative posts in a row.

Isn't the purest form of flattery imitation? Given that it has taken csco so long to come out with IOX it is logical to assume that they would take some of the good ideas from JunOS and incorporate them. The difference being is that they didn't stop there. Where is the JunOS equilivant for individual process restartability or the ability to run distributed processes across multiple processors? How about completely virtualized routers running within the same chassis?

Volpi has a right to be optimistic - He now has a product that can actually compete.
ozip 12/5/2012 | 3:19:03 AM
re: Volpi Touts Routing Opportunities I think you must have missed the bit where he talked about cable. When the CRS was released they talked heavily about multicast. The big guy in cable, comcast is currently rolling a large multicast video distribution network. Its been going on for a while but they made it public knowledge in a paper given at NCTA last week. I agree that there are few Carriers who need this but the cable guys will be buying big iron for some years to come.

ozip
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