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

The networking company, which has an edge router portfolio, is expected to announce new core router capabilities, drawing it into tighter competition with Cisco and Juniper.

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.