Even though the market for internet core routers will be worth $US10 million in three to five years, only two players will split that pie, says Juniper Networks CEO Scott Kriens.
Kriens, naturally, is very bullish on Juniper's prospects for being one of those two combatants. Currently, Juniper owns 9 per cent of the $US1 billion combined market for internet core routers, ATM switches and IP/ATM switches, according to market tracker RHK in San Francisco.
Cisco Systems owns 48 per cent of the market and Lucent Technologies is second with 27 per cent. But Lucent's share is mostly in ATM switches, an area where Juniper does not play. So Cisco and Juniper are No. 1 and No. 2 in internet core routing.
Kriens thinks it will stay that way.
"This market is going to attract a lot of interest and announcements," he says. "But an indication of success or failure is market share. There's probably not room for more than two competitors."
The barriers to entry for other contestants are the dependency and investment service providers have in a select few vendors, Kriens says. Service providers don't want to deal with multiple vendors for something as vital as their IP service infrastructures.
Also, new entrants have to propose something that's fundamentally unavailable today in the internet. Simple speeds and feeds, and claims of zero packet loss when all quality-of-service, multi-protocol Label Switching (MPLS) and security features are turned on just won't cut it anymore.
"It's a pretty tall order," Kriens says. "But we take each legitimate product set seriously and watch all announcements."
One company that plans to be taken seriously as a core network equipment provider player is Foundry Networks. The company, which began life four years ago as a Gigabit Ethernet startup focused on the enterprise, entered the internet core routing market earlier this year with the NetIron line.
"During the last year it was a two-horse race, now it's a three-horse race," says Bobby Johnson, Foundry's CEO. "We've been shipping (the Border Gateway Protocol) longer than Juniper's been shipping product."
Foundry has its work cut out for it, though. Foundry's NetIron1500 router delivers impressive performance and scaling characteristics, but the company faces long-term challenges in selling and marketing the product in the internet core market, says market tracker CurrentAnalysis in Virginia.
"Foundry can assert pricing and performance claims that can cause some consternation for internet core routing market leaders Cisco and Juniper, although the firm has yet to prove that it can be a long-term factor" in the market, CurrentAnalysis stated in a recent report.
Johnson remains undaunted. Although he has no intentions of overtaking Cisco or Juniper in the next six months, the next 24 months could be interesting.
"Over time, we certainly plan to level the playing field," Johnson says.
Sixty per cent of Foundry's business is with service providers, and seven of the top 10 ISPs are Foundry customers, Johnson says. America Online has $US30 million of Foundry equipment installed, and Foundry has sold $10 million worth of packet-over-SONET (POS) interfaces, he says.
"We focus mostly on POS," Johnson says. "We're more for the pure IP and SONET play."
Nonetheless, Foundry will soon add ATM WAN interfaces and MPLS capabilities to its products. The company will also ship OC-192 interfaces on its NetIron and BigIron routers and switches in the fourth quarter, Johnson says.
The proof of the pudding though, says Kriens, will be performance in the internet core.
"The internet is an effective vehicle for proving product capability," he says.