The edge router market is one of the few sectors showing signs of life for equipment makers. For San Jose, Calif.-based Redback Networks, picking up mind share is just as important as picking up market share.

by ISP-Planet Staff [October 14, 2002]

Redback Networks, Inc. originally introduced its SmartEdge 800 router during the summer of 2001, venturing into space dominated by Cisco Systems and Juniper Networks. The Redback SmartEdge 800 router goes head-to-head against Cisco's 7500 series and Juniper's M5, M10, and M20 routers.

According to Infonetics Research, Juniper is the second largest equipment-maker in the edge router market when it comes to revenue. Since its acquisition of Unisphere, Juniper has a market share of about 18 percent, but Cisco dominates edge router sales with 59 percent of the market. Redback comes in third, but the company increased market share to 8 percent in the first quarter of 2002, up from 6 percent at the end of 2001.

Much of this growth is credited to Redback's upgrades of its SmartEdge 800 router. The company recently upgraded the unit's Multiprotocol Label Switching (MPLS) capabilities, enhanced its Quality of Service (QoS) features, and flexed its user-to-network connectivity capabilities for Virtual Private Network (VPN) access. Redback also integrated its subscriber management system (SMS) platform into the design of the SmartEdge 800 router. As a result of these upgrades and enhancements, Redback is winning over the hearts and minds of IP service providers—particularly those supplying broadband and leased line access on a massive scale.

Shailesh Shukla, Redback vice president of marketing and business development, said 17 of the top 20 Digital Subscriber Line (DSL) providers in the world use Redback to manage their subscriber systems.

But the Redback SMS is capable of handling far more than DSL access. The SmartEdge 800 is platform agnostic—capable of managing any type of broadband connection including cable modem and wireless broadband, as well as leased line connectivity like frame-relay and T-1.

Shukla said that 60 service providers and field-tested the edge router and 14 clients have contracted to purchase the unit to date—the most recent being Genuity, Inc., a North American provider of IP networking services.

Genuity is deploying the SmartEdge 800 router for over its international network to deliver scalable, robust Gigabit Ethernet (GigE) services to its customers. Steven H. Blumenthal, Genuity senior vice president and chief technology officer, said Redback's SmartEdge router provides the type of carrier-grade hardware and software architecture needed to meet the demands of businesses with mission critical enterprise-class applications.

"The deployment of robust network equipment such as the SmartEdge router will enable us to provide high-availability GigE services to our customers, while at the same time reducing our operating expenditures and helping us to maintain our industry-leading service level agreements," Blumenthal said.

Genuity is not alone in adopting Redback's "user-to-network" fault-tolerant SMS platform. This is the key feature that allows service providers to build a reliable infrastructure for IP service delivery. The software modularity of the platform also enables seamless binding of any user connection to any service resulting in ease of provisioning and speeding time to profitable services.

Shanghai Telecom, one of the primary subsidiaries of China Telecom, is also in the process of deploying the Redback SmartEdge 800 router. Shanghai Telecom needs Redback's high port density capabilities to rapidly expand its subscriber base by adding a large number of VPN customers.

What both carriers demanded is a quick return on their investments. Redback's Shukla explained how the SmartEdge 800 router delivers a high ROI.

"One SmartEdge 800 can simultaneously manage 3,000 T-1s at one time," Shukla said. "In a typical setting, a service provider can add four more chassis to a single rack, which is capable of handling 13,000 T-1s. This drives a lot of revenue, especially for VPN business services."

In order to generate revenue from IP services, data networks need to be as reliable as a Public Switched Telephone Network (PSTN), while at the same time be engineered for easy management user-to-network functionality. The price of offering this advanced level of scalability, reliability and flexibility that is critical to supporting future IP services varies. Service providers can choose from a range of different interface capabilities depending on the applications required. An empty chassis with a few line cards in fully configured mode starts at about $150,000. But some units have gone for as much as $400,000, according to Shukla.

Right now, Asia is a relative hotspot for broadband deployment. Shukla said North American providers are under a capital expenditure freeze, but demand for advanced IP services in other parts of the world remains steady.

"There is a lot happening in Asia," Shukla said. "India, Taiwan, China and other markets are hot for IP capabilities right now. Europe is also exhibiting steady growth with major broadband initiatives underway in Great Britain, France and Germany."

Shukla said European growth, particularly for DSL access, is due in large part to government-backed broadband initiatives. He added that over-capacity and government regulations are hampering new network build outs in the U.S.

"RBOCs are tentative about deploying new systems," Shukla said. "They're looking for regulatory relief in long-distance and data services before they make future investments."

Of course, Redback anticipates that the North American market will improve soon. Shukla said he expects to see capital available in about a year. Until then, the SmartEdge 800 is making inroads overseas and with IP-intense U.S.-based clients like Genuity.

All told, Redback Networks serves a global customer base of more than 350 carriers and service providers, including major local exchange and inter-exchange carriers (IXCs). If Redback Networks' SmartEdge 800 keeps on gaining the mind share of IP service providers, it's bound to pick up a larger chunk of market share over the long haul.

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