Analysts See Both Challenges and Opportunities for Alcatel-Lucent
The company faces a daunting challenge, but some analysts said theres also opportunity. Nomura Research analyst Stuart Jeffrey said in a research note May 16, when word of Alcatel-Lucents core router push began to spread, that he expects Ciscowhich currently owns 54 percent of the core router marketcould see that number drop by as much as 10 percent by 2014, with Junipers share dropping by 4 percent. "Alcatel-Lucent has captured a 24 percent share of the edge router market over the past 10 years, Jeffrey wrote. If the company can launch a compelling solution and leverage its customer relationships, then it may see faster share gains in the core routing market.Theyve been building router technology for a while, Kerravala told eWEEK, adding that companies hes spoken with have said Alcatel-Lucents edge router platform is a good product. Its on par with Cisco and Juniper. Alcatel-Lucent officials also could combine the edge and core router platforms to offer carriers some kind of end-to-end story similar to what Cisco offers, he said. For its part, Juniper doesnt have that same sort of story, Kerravala said. However, Juniper officials are already pushing back. The company May 22 announced a capacity upgrade to its TXP routing system for its T4000 and T1600 core routers. According to Juniper officials, the TXP system upgrade more than doubles the routers capacity and extends the lifespan of the products. "Service providers are dependent on the infrastructure they build to deliver profitable services, but they must also be nimble and flexible to scale these services, Daniel Hua, senior vice president and general manager of Junipers Core Business Unit, said in a statement. Investment protection, operational continuity and future-ready scalability are critical components in infrastructure purchasing decisions. Expanding the capabilities of Juniper's TXP multi-chassis system, which is deployed in numerous networks worldwide, is clearly aligned with this strategy." Cisco officials also have been touting their accomplishments. In a May 18 post on the companys CiscoHome blog, Surya Panditi, senior vice president and general manager of Ciscos Service Provider Routing Group, said the vendors core router business has gained market share for the past seven quarters, and 12 of the last 13 quarters. The continuing explosion in IP traffic and the proliferation of connected devices and applications is dramatically transforming network traffic patterns, making network intelligence more important than ever, he wrote in the blog, nothing that the CRS-3 router has hit $1 billion in total orders and that Cisco has shipped almost 3,000 systems.
Zeus Kerravala, principal analyst at ZK Research, said the companys experience in edge routers will give it some momentum in its core router strategy.