Routers, Cisco, and network processors......
Yesterday's issue of the Gilder Technology Report focused on "network processors", the idea being that the BIG BOX router will someday be miniaturized into a processor. The corollary to this, presumably, is that Cisco will be pushed out to the edge, and will be just another Dell type company.
Lots of talk about Broadcom, Intel, and others...
It's an 8 page report, and I would never dream of reproducing it in toto, but a couple snippets might be of interest.....
>>>"The good news for Cisco (CSCO) is that unit demand for routers will continue to expand explosively. The bad news is the hollowing out of the router and its dispersal across the fringes of the network. Routers will make their way into homes, shops, and apartments, into PCs, into settop boxes, into cable and digital subscriber line (DSL) modems, into company hubs, into wireless ports, into voice-over-IP processors, into multimedia gateways, into servers, and into automobiles. A router, however, will no longer be a hare but a turtle, not a box but a chip. The profits will migrate toward the makers of "network processor" chips, who will compete for the role of the Intel of the network edge."
"Combined with the Silicon Spice broadband IP gateways, the NewPort 10 gigabit transceivers, and whatever network processor chip—hard or easy—Broadcom ultimately buys or contrives, the switch fabric pushes the company deep into Cisco territory. As these devices get integrated onto single CMOS chips, Cisco will probably continue to purchase them in ever greater numbers. But in time they will comprise most of the value of router hardware. Cisco will become a box assembler like Dell (DELL). Soon enough the router will go away. It will become a Broadcom or an EZ chip.
A rough rule of the Telecosm ordains that hardware softens on the edge of the network and software hardens at its center. The network processor represents a software intensive router. As John Chambers sometimes seems to recognize, the likely outcome is that Cisco will retreat from its hardware revenue addiction to a role as a networking mutual fund and a software bastion of intellectual property. Already most of the value of Cisco boxes resides in software: its Internet Operating System, Border Gateway Protocol, its Open Shortest Path First algorithms and all the other code structures that underlie most of current Internet architecture. A street map of Cisco City, this is a rich vein indeed. But what happens when the vein turns into glass? " |
