Cisco vs Juniper
This is the Bloomberg piece some people are looking for. I would have posted it when it was published but didn't, assuming everyone around here had already seen it.
The real issue on a long-term basis is to decide whether or not Juniper's technology is discontinuous or continuous. If it's the former, this is a serious threat. If not, it will more likely be a bump in the road for Cisco's performance. However, the stock is priced so high right now that it might be more than a bump for the stock.
--Mike Buckley
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Mountain View, California, March 27 (Bloomberg) -- Juniper Networks Inc., a maker of computer-networking equipment, plans today to unveil a data-traffic router four times more powerful than its previous flagship product.
The M160 router, used to run Internet service providers' large networks, can process 160 million packets, or bundles of digital information, a second. It's faster than a rival device from Cisco Systems Inc., the No. 1 maker of Internet equipment, which is also developing a more powerful version of its own product, said Raj Mehta, senior analyst at market researcher RHK.
Juniper, which shipped its first products in September 1998, is trying to keep up its torrid growth pace and continue grabbing market share from Cisco. Last year, Juniper's revenue surged to $102.6 million from $3.8 million as its share of the market for the most-powerful Internet routers climbed to 15 percent, according to Dell'Oro Group, a market researcher. Cisco's share shrank to 79 percent from 86 percent.
``The M160 has really upped the ante at the poker table,' said RHK's Mehta. ``The needs of the core network are really scaling fast.'
A typically configured M160 will probably cost at least twice as much as the M40, which now sells for about $200,000, Mehta said.
Shares of Mountain View, California-based Juniper rose 7 7/16 to 276 7/16 yesterday. They've climbed more than 24-fold since an initial public offering last June, giving the four-year-old company a market value of $42.9 billion.
Juniper has at least one customer for the M160: Cable & Wireless Plc, which is already one of the company's two largest customers.
Cable & Wireless, the U.K.'s second-largest traditional phone company, plans to announce today that it's using the M160 to manage Internet traffic and boost capacity between Washington and New York. The company is installing the M160 along with fiber- optic equipment from Nortel Networks Corp.
Juniper and Cisco are soon to face stepped-up competition from large and small rivals, Mehta said. They include closely held startups like Avici Systems Inc., Pluris Inc. and Ironbridge Networks, and established competitors including Lucent Technologies Inc. and Nortel. |
