MPLS: A Slow Start but...

Enterprise IT managers are discovering the benefits of managed network
services' improved ability to control equipment costs and network management
costs, enhanced support for business applications, and ease and speed of
deploying to new sites.

Multi-protocol label switching (MPLS)-based managed VPN services can act as a
solid starting point to deploy many value-added services (VAS), while helping an
enterprise to converge existing disparate networks onto a consolidated,
end-to-end infrastructure that can support the combined data, voice, and video
services.

The inherent any-to-any connectivity of MPLS-based VPNs also lowers the total
cost of ownership (TCO) for a service provider. These savings can be passed
along to enterprises, along with other inherent benefits, including simplified
deployments of quality of service (QoS), security, high availability,
multicasting, and other critical abilities.

According to market analysis by Synergy Research Group (SRG), core routers
increased 15 percent sequentially in revenue, driven by strong demand from
carriers looking to upgrade their networks to MPLS and continued demand for IP.

What's more, unit shipments increased 22 percent, due to increased demand
from greenfield implementations. In the core, Juniper increased 42 percent;
Avici increased 11 percent, and Cisco increased seven percent sequentially.
Overall market share leaders were Cisco, Juniper, and Avici with market shares
of 71.1, 25.8, and 2.7 percent respectively.

Alcatel has also entered the market and recently unveiled an addition to the
service edge router line it obtained from last year's acquisition of start-up
TiMetra Networks. The 7750 SR-7 router, which has seven slots and takes up
one-third of a telco rack, is designed for MPLS VPN and Ethernet service
provisioning.

It features a switching capacity of 200 Gbps full duplex, full system
redundancy, and 20G bit/sec of I/O capacity, scalable to 40 Gbps in the future.
The 7750 SR-7 is designed to go up against Cisco's 7513 and 7609 routers,
Juniper's M320 and Laurel Networks' ST200. Nortel Networks has also
announced its MPLS router.

Multi-service edge products are what make digital convergence in the network
happen. These devices aggregate customer traffic, including frame relay, ATM
(asynchronous transfer mode), Ethernet, and leased line; and dump it onto a
multi-

protocol label switching (MPLS) backbone.

MPLS allows carriers to more efficiently use their network resources, while
still offering customers private and secure connections.

The market for multi-service edge devices is expected to be huge, around $3.3
bn (£1.77 bn) by 2006, according to Infonetics Research. By contrast, the core
router market is expected to be worth about $2.7 bn by 2006.

Nupur Chaturvedi

Global Router Market

According to the Dell'Oro Group, the worldwide sales of routers grew 3
percent in 2003 to reach $6.3 billion. Sales of high end routers, grew 22
percent in 2003. The lower-end business-class routers, experienced a 5 percent
annual decline. However, Dell'Oro says that the low-end and midrange routers
experienced strong sales growth of 9 percent in Q1 of 2004 and the high end
routers grew by 7 percent.