1/26/2004 -- At least one market research firm believes that demand has finally caught up with the bandwidth glut that has tied the purse strings of service providers for the past several years, fueling speculation that 2004 could see a resurgence of big ticket capital expenditures for items such as routers and other infrastructure devices.

At the same time, argues Joe McGarvey, a senior analyst in carrier infrastructure with Current Analysis Inc., service providers are confronted with a different situation today than they were four years ago, when they were typically concerned with adding additional bandwidth at any cost.

In this respect, networking giants Cisco Systems Inc. and Juniper Networks -- which have been slow to implement Multiprotocol Label Switching (MPLS) and other next-generation services into their high-end routers, like Cisco’s 12000 Series line -- are under attack from a scrappy band of start-up challengers. These vendors -- Avici Systems Inc., Caspian Network, Chiaro Networks, Hyperchip and Pocket Networks, among others -- claim that they, and not Cisco or Juniper, are providing infrastructure devices that are better equipped to support different types of MPLS traffic, protocols and services.

“The decision before most service providers is whether to use the routers, largely from Juniper and Cisco, which they used for the last build out, or to move to a newer breed of routers, those that have purportedly been designed to accommodate the future need for growth, reliability, and QoS performance,” McGarvey writes. “The argument from Avici and the newcomers is basically that the networks carriers and service providers now need to build look nothing like existing networks -– so why use existing equipment?”

Cisco has not been unmindful of this attack, McGarvey notes, and recently introduced a significant upgrade for its 12000 Series routers that effectively enables customers to double their existing capacity. This, he speculates, seems to be part of a general strategy to forestall customer defections until Cisco can deliver an upgrade – possibly in the form of a new system.

In this regard, McGarvey and Current Analysis believe that timing, more than anything else, is on Cisco’s side. “If it were 1999 instead of 2004, service providers might be more willing to take a risk on a new startup or take on the expense of burning a new box into their infrastructure and OSSs. As it is, though, service providers and carriers must undertake the next cycle of expansion under the careful watch of their CFO, management team, and shareholders. Flights of fancy that resemble 1999 will be hard to find this time around,” he comments.

Also likely to make service providers think twice before hitching their fortunes to a start-up’s (largely unproven) technology is the fact that only Avici has snared a big name customer -- AT&T.

If they upgrade this time around, McGarvey speculates, the vast majority of service providers will opt for gear from Cisco or Juniper. “The largest proportion of service providers will play it safe and trust that Juniper and Cisco will deliver advances in lockstep with their requirements,” he concludes. “So, while there may be some call for the services of the multi-chassis router in the coming build out, the product class, for the most part, will remain in the wings until the next echoes of bandwidth glut have subsided.” -Steven Swoyer