The duopoly is broken in carrier edge routing. Once virtually the exclusive domain of Cisco and Juniper, companies such as Alcatel, Redback and Tellabs are increasing their share in areas such as IP/MPLS services, IP aggregation, Ethernet/broadband aggregation and multiservice interworking.
Alcatel saw the most dramatic gains, with market share in IP edge aggregation climbing from 9.2 percent in the second quarter of 2005 to 25.6 percent in the fourth quarter, displacing Juniper as the number two vendor in this category, according to Synergy Research. Basil Alwan, president of Alcatel's IP activities, recently shared his view of the edge routing landscape with us.
What's fuelling Alcatel's gains in edge routing?
The major transformations going on in IP/MPLS right now - triple play, multiservice backbones for a combination of IP VPNs, VPLS, as opposed to purely IP backbones; and then carrier Ethernet aggregation. Those three are all happening at once at different paces, in different geographies. In '05, we were full on into those transitions. If you haven't been there and are coming in now, with a new entrant platform, [you're] a little behind the times on the latest features... Right now, we're hitting our stride. Cisco and Juniper are responding in many ways to us. We have taken substantial share now, the first vendor since Juniper to make meaningful inroads in IP.
What are you doing right and what are your competitors doing wrong?
Grouping (Tellabs, Redback and Alcatel) together is interesting, but there's a very significant difference between the success we've had in the market. [Alcatel has] the ability to serve the carriers at the level they want to be served from the solution, integration and box points of view. Global reach, complete focus. We have a data background through the Newbridge acquisition. And finally, a product that has really hit the sweet spot more so than our competitors. For that reason, we are really riding all of the transformations that are going on: Carrier Ethernet, triple play and in the multiservice edge.
Some analysts say your gains are not true router gains because they include a switch.
7450 is a routing platform. It's not an Ethernet switch as in the [Cisco Catalyst] 6500. Everything is carried over MPLS. Everything is an MPLS service. So arguably, when we do IP/Ethernet aggregation and there's a stage of 7450s there, we're doing a combination of routing and MPLS. But it is purely a platform for IP/MPLS.
This is the business. This is the IP/MPLS platform business. Part of it is being used for aggregation, as it always has been. There's always been aggregation routers and there's always been core routers. Some people like that distinction now because it's convenient to say, 'Well, that's just...' But this is the business and that's where it's going.
Why are the incumbent router vendors losing traction?
One we certainly see out there, but less than we expected. Another is a long-standing platform, very successful. We think we've eclipsed it in functionality, feature, capabilities. The share we're gaining against [it] in that particular segment - aggregation - we are gaining substantial share and it's against that platform. Why? It's an ageing platform. It doesn't have the same price/performance and capabilities that we do.
What we have established is a modern platform focused on multiservice IP/MPLS. If all you're doing is Internet service and aggregation, you have one job - it's relatively simple. If you now think, 'OK, I want to run Internet service as one service, and I would like to run some voice, some video, some VPNs that require SLAs', you have a whole new set of constraints. All of that functionality to manage on a per-service basis doesn't exist in those old platforms, unless you do some add-ons. This is why we're winning a lot of deals.
What are your competitors developing to take back the market share they've lost to Alcatel?
We always hear and we're never really sure because it's always [piecemeal] information. I don't put much credence in that.
We believe the reason for our success and why our success has been more substantial than our competitors' is because we foresaw the opportunity for multiservice transformation. The reality is we're on a good trend.
We have an amazing set of customers, and our focus has to be on continuing to serve the trend and customer base we've built. If we can stay focused on that, stay focused on the problems that we're trying to solve... Once you establish a bit of a lead, the key is to maintain it. It doesn't take heroics; it takes consistent performance.
Largely, our view is, let's stay focused on the opportunity. Let's not take our eye off the ball. It's a big opportunity, it's a major transition that's going to last four or five years. Let's continue to try to solve problems.