The Core Was Rotten for Startups

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ifish 12/5/2012 | 3:10:04 PM

re: The Core Was Rotten for Startups for the sake of completeness, let's not forget Netcore (acquired by Tellabs) and Argon Networks (acquired by Siemens/Unisphere). And to some degree, Torrent Networks (acquired by Ericsson).

would be wonderful to have an archive of the marketing claims - how big, how bad, how cheap, how fast to develop. Not sure if there was ever another market that so many were going to revolutionize. Or so many companies bought without any product deployed.

great article. good times.

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reoptic 12/5/2012 | 3:10:04 PM

re: The Core Was Rotten for Startups Very good analysis of the carnage in this market. Did leave out of the story the attempts by the existing players to make or buy core routers, including Nortel: Versalar and Optera,
Alcatel: 7770, Lucent: Packetstar and Nexabit and ECI: Chiaro.

Amazing that over a billion dollars in investment in core routers was lost.

In the end you have to give credit to Cisco for killing these competitors. After they were surprised by Juniper's success they stepped up and put a lot of resources and focus into the CRS-1 and were very aggressive about holding their share in the core until it was ready for prime time.

Juniper also deserves a lot of credit for getting to market quickly and taking share while the market was still hot.

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Belzebutt 12/5/2012 | 3:10:03 PM

re: The Core Was Rotten for Startups That's more than $1 billion of funding washed down the drain over the course of just a few years.

Down the drain? Come on, that money sustained the sports car buisiness, the california real-estate business, the consumer-electronics business, etc. It's called "trickle-down economics", or something. ;)

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Pete Baldwin 12/5/2012 | 3:10:03 PM

re: The Core Was Rotten for Startups Agreed that it was a good article (nice job Ryan) and that Cisco deserves some credit for cementing a place in this market.

But how *much* credit? One could argue that the core-router startups were doomed by the collapse of CLECs. That was going to be their main market, as the incumbents weren't about to buy from any startup (AT&T-Avici being the primary exception).

You could contend, then, that once the CLEC boom faded, the end was already written for the core-router startups.

That's oversimplifying, of course. Cisco and Juniper still had to pump out new core routers; they couldn't win the market by just existing. But the weakening of that CLEC market really gutted the competition.

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WangChung1 12/5/2012 | 3:10:02 PM

re: The Core Was Rotten for Startups Anybody remember Monterey Networks and the Wavelength Router? Cisco bought the start-up in 1999 and terminated the business unit in 2001.

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c_headed 12/5/2012 | 3:10:02 PM

re: The Core Was Rotten for Startups This article provides great closure for an exciting, bygone era.

I believe only one core router start-up was missed: Charlotte's Networks, a subsidiary of MRV Communications, based in Israel.

MRV management has never confirmed that Charlotte's has been closed, and, oddly, it is still listed as a significant subsidiary in MRV's most recent 10-K:

http://www.sec.gov/Archives/ed...

Long live Cisco.

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turing 12/5/2012 | 3:10:01 PM

re: The Core Was Rotten for Startups I think people forget the core router market served one startup very well, namely Juniper. Juniper was a start-up like any of the others, with one major exception: they were out first. They were a full year or more ahead of Avici in the market, and timing was critical, as was being the right size product for the time. Juniper gobbled up all the disgruntled cisco shops, starting with UUNet I think. Once they had a large enough base of carriers, they were not considered risky anymore to buy from, and the rest, as they say, is history.

But they were still a core-route start-up, and seemed to prosper just fine.

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myhui 12/5/2012 | 3:10:01 PM

re: The Core Was Rotten for Startups And they tested and refined their routing software in a customer's network well before the hardware was ready.

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chook0 12/5/2012 | 3:10:01 PM

re: The Core Was Rotten for Startups I think one of Juniper's smartest moves (besides being firat in the startup space) is that they launched at NANOG with a working box rather than in a roomful of suits with a powerpoint deck.

--chook

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litereading 12/5/2012 | 3:10:00 PM

re: The Core Was Rotten for Startups Up goes the price. And what's a poor LEC to do.

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