MORE ON MINI-TSR
(from Light Reading)
<<<Today's focus: Avici intros tiny TSR
By Marguerite Reardon
Internet core router maker Avici Systems announced a smaller
version of its flagship Terabit Switch Router last week. Called
the SSR, it is designed for service providers with limited
space and is essentially a TSR cut in half.
Avici's announcement follows on the heels of a big announcement
from Cisco Systems that boosts the routing leader's presence at
the edge of the network. Although Avici is addressing the need
for a smaller footprint, it says that its new product is for
the core of telecom networks and not designed to be an edge
router.
The market positioning is interesting, if only because numerous
telecom equipment players are now moving into the market for
telecom equipment that sits on the edge of networks. For the
most part, telecom equipment spending remains rather robust in
that sector, as spending on core or long-haul equipment for the
backbones of telecom networks has dwindled.
"We are still a core routing company," says Esmeralda Swartz,
director of strategic marketing for Avici. "Avici has no plans
to go after the edge market."
The SSR is the exact same router with all the same capabilities
as the Terabit Switch Router (TSR), but it has been chopped in
half so that two boxes can be stacked on top of one another.
While the TSR has 40 slots that can be populated with a mix of
OC3 (155M bit/sec) to OC192 (10G bit/sec) interfaces, the SSR
has 20 slots. Just like its big brother, the SSR can be
connected through the back to form a single, larger, logical
router.
The company hopes that the smaller footprint will open it up to
new customers. The TSR currently fills an entire seven-foot
telco rack and when fully loaded, weighs over 1,000 pounds,
making it a rather large box to install in smaller points of
presence.
For the last several quarters, Avici has been plagued by a lack
of new customers. In September, it was forced to cut its
revenue estimates by more than half to between $9 million and
$10 million, down from $22.5 million to $23.5 million. It also
laid off about 55 employees. The company blamed lower customer
orders and market conditions for its actions.
Currently, Avici has three main customers, AT&T, Enron and
Qwest Communications, which together made up about 85% of its
revenue in the first quarter of 2001. In the second quarter,
Qwest and AT&T were both 10% customers. But, like the rest of
the service providers, these carriers are cutting back on
spending, and Avici is feeling the effects.
The new chassis size appears to be getting some traction
already. In the announcement, the company noted that Ethernet
service provider IntelliSpace and testing facility Sandia
National Laboratories were already testing the SSR.
Avici's attempt to diversify its product line by offering a
smaller form factor is reminiscent of strategies played out by
its two key competitors: Cisco and Juniper Networks. They also
have taken the hardware and software of their bigger boxes and
tried to shrink them down to smaller form factors. Just two
weeks ago, Cisco announced its new 12404.
Like Cisco's product, Avici's new router is able to share line
cards with other Avici models, which will help carriers protect
their investment.
As Avici distances itself from the edge market, some analysts
say that the company could be missing a huge opportunity. The
edge router market is expected to grow to $17.2 billion by 2003
from $6.3 billion in 2000, according to Infonetics Research. On
the flip side, Infonetics has also reported that the core
router market actually shrank to $581 million from $757
million, a 23% drop, in the first quarter of 2001. And growth
in that area is expected to remain flat into 2002. But Avici is
hopeful that more activity at the edge will boost traffic
demand in the core, forcing service providers to upgrade their
core networks.
Alex Henderson, an analyst with Salomon Smith Barney, follows
the router market closely and says this hypothesis may prove to
be true. But he expects metro equipment sales to recover much
sooner than long-haul equipment, which means that Avici could
have to wait several quarters before business picks up in the
core again.
"I think they are at a disadvantage," says Henderson. "While
they are waiting to sell core boxes, Cisco will be selling at
the edge and the core. I think you need to demonstrate you have
a portfolio of products and not just a point product."
_______________________________________________________________
Marguerite Reardon is a senior editor at Light Reading
(http://www.lightreading.com), an optical networking Web site.
She can be reached at reardon@lightreading.com>>>
Namaste!
Jim |
