Alcatel-Lucent Preparing to Challenge Cisco, Juniper in Core Routers

By Jeffrey Burt  |  Posted 2012-05-18

Alcatel-Lucent seems poised to challenge Cisco Systems and Juniper Networks in the core router market.

Alcatel-Lucent officials sent out an announcement about a press conference May 22 during the company€™s two-day annual Technology Symposium 2012 in Santa Clara, Calif. During the press conference, they will €œannounce a groundbreaking innovation in core networking.€

€œNow it€™s time to rethink the network,€ the company says in a video promotion for the event.

 Alcatel-Lucent has offered edge routers for more than a decade, but has not challenged Cisco or Juniper in the core router market until now. Those are formidable foes but at least one analyst is giving the company a chance to gain market share.

"Alcatel-Lucent has captured a 24 percent share of the edge router market over the past 10 years,€ Nomura Research analyst Stuart Jeffrey said in a May 16 research note. €œIf the company can launch a compelling solution and leverage its customer relationships, then it may see faster share gains in the core routing market. Our analysis shows that a 10 percent core routing share would drive a 6 percent increase in our operating income forecast for 2014 (all else being equal) and a 20 percent share 14 percent upside to estimates."

Cisco reportedly owns more than half the market, but Jeffrey projected that the networking giant could see as much as a 10 percent drop by 2014, and Juniper€™s share could drop by 4 percent.

Alcatel-Lucent reportedly began laying the groundwork in June 2011, when it rolled out its FP3 processor, a chip that can support 400G-bps transmission speeds and help speed up the performance of its edge routers. The chip is aimed at high-performance public and private networks, with a single FP3 processor being able to handle 70,000 simultaneous high-definition video streams or 8.4 million simultaneous retail cloud sessions, the company said.

Alcatel-Lucent officials at the time said the chip would be available in their service routers this year.

While Alcatel-Lucent officials gear up for their announcement, Cisco executives are touting their strength in routers. In a May 18 post on the networking giant€™s CiscoHome blog, Surya Panditi, senior vice president and general manager of Cisco€™s Service Provider Routing Group, noted that the company has seen its router strength growing.

Quoting numbers from ACG Research€™s first-quarter 2012 report, Cisco€™s leading share of the edge and core router markets grew during the first three months of the year. In core routers, it marked the seventh consecutive quarter of market-share growth, and the 12th time in the last 13 quarters. In edge routers, Cisco€™s share grew for the fourth time in the last five quarters, Panditi said.

€œThe 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.

Panditi, touting the reach of Cisco€™s networking products, said that the company€™s CRS-3 router over the past year and a half has hit $1 billion in total orders, with almost 200 customers and almost 3,000 systems shipped.

He also noted Cisco€™s nV (network virtualization) technology, which brings the network edge, aggregation and access layers into a single ASR 9000 system, which increases network capacity while driving down operation expenses by as much as 70 percent.


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