July 14, 2009
1:15 PM -- Yesterday, I'd mentioned Juniper is expanding into the mobile market. (See Juniper: Getting a Move On?) But what about optical?
Put another way: Why didn't Juniper Networks Inc. (NYSE: JNPR) do a packet-optical transport system (P-OTS) instead of its IP-over-DWDM partnership with Nokia Networks ? (See NSN, Juniper Converge IP & Optical.)
The question comes up because of Verizon Communications Inc. (NYSE: VZ), which is looking toward a network model that lowers the emphasis on routers and on Layer 3 MPLS.
(It's also relevant because the Light Reading virtual tradeshow, Packet-Optical Transport Evolution, is going on today. Registration is free, by the way. Just sayin'.)
Back to Verizon. Stuart Elby, the carrier's vice president of network architecture, has been doing the tradeshow circuit -- including a Light Reading event in May -- talking about the next backbone upgrade. (See LR Live: Verizon Plots 100 GigE RFP and Verizon Rethinks Long Haul.)
Verizon's goal "is to reduce a lot of the core router ports, which would put pressure on Cisco Systems Inc. (Nasdaq: CSCO) and Juniper," says Heavy Reading analyst Sterling Perrin. "Not to say they're anti-router, but they do tend to come down on the router guys quite a lot, and it does have to do with the prices they see for the interfaces for the routers."
So, packet-optical is on the rise in Verizon's view. Routers, not so much.
Cisco already has some optical presence, with the ONS 15454 line, and of course Alcatel-Lucent (NYSE: ALU) has optical cred up to its eyebrows. Juniper isn't an optical company, though. Analyst Ed Zabitsky of ACI Research thinks that's trouble, because based on Verizon's stance, he thinks an entire aggregation layer of routers could be taken over by P-OTS.
"I don't think people really see the risk in Juniper's position and what an epic change it is -- and the fact that it's happening at Verizon right now," Zabitsky says. Juniper, he thinks, should be trying to build a P-OTS box, probably with NSN's help.
Juniper, for its part, says it's important to look beyond box types. "What the carriers want is the service provisioning capability. They want high availability. They want high performance. And they want it very cheaply," says Alan Sardella, senior product marketing manager.
One way to do that would be to put the necessary intelligence into the transport gear -- which is what Zabitsky predicts will happen. Juniper is opting for another option: "You can take products like ours that have higher and higher intelligence with each generation, and then work with your customers to bring the costs in line," Sardella says.
NSN won't confirm Zabitsky's world view, but the company acknowledges that a P-OTS system could be the eventual answer. "Verizon is looking at a god box to do all that. In the long term, Verizon's approach is the proper approach. You create a flatter network," says Pathmal Gunawardana, NSN's director of business development. But not all carriers are willing to pay the premium that such a product would command, he adds; hence, the need for something more immediate.
Neither Juniper nor NSN are commenting on whether they might someday build a P-OTS box together.
From here, Zabitsky takes the idea one step further into what-if land. The Juniper/NSN partnership involves having the router and DWDM system interoperate under NSN's management software (because JunOS can't see into Layer 1 of the network, but NSN's OSS can look at Layers 2 and above). That, combined with the supposed rise of P-OTS, gives NSN the dominant role in this partnership, he says. In the long run, he muses, Juniper could end up being an adjunct to NSN in many cases, or even an acquisition candidate.
That's speculation, of course, and it relies on the rest of the industry taking viewpoints similar to Verizon's. The theory is a bit far out for me, but Zabitsky's core point seems like something to watch: As P-OTS becomes an alternative to routers in some cases, Juniper (and Cisco, really) might have to find a way into that market.
— Craig Matsumoto, West Coast Editor, Light Reading
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