Cisco claims ‘to change Internet forever’ with router refresh

Networking equipment vendor Cisco this week revealed what it described as the foundation for the next generation of Internet with its new CRS-3 router, reportedly capable of managing data transfer speeds of up to 322Tbps.

In a live web conference, the company claimed that the carrier-grade router is three times faster than its current model, the CRS-1, and 12 times quicker than any technology from industry rivals such as Juniper Networks and Huawei. The CRS-3 is due to go on sale later this for a price of $90,000. It has so far only been trialled by US carrier AT&T.

Cisco says it has developed the additional bandwidth capability to handle an anticipated surge in rich-media traffic, such as streamed high-definition video and videoconferencing, specifically in the consumer arena over mobile devices such as the iPhone and upcoming tablet device the iPad. The company says it is also designed to accommodate the movement of IT architecture into the cloud. "Video is the killer app," explained John Chambers, Cisco’s chairman and chief executive officer. "It brings things to life."

The CRS-3 is set to go on sale during the summer for a retail price of $90,000, but Cisco concedes that the router is only a core element for the next generation of Internet speeds, and it will be some time before the remaining elements of network infrastructure are capable of handling vastly increased bandwidth. But Cisco insists that steps are already being taken, in some territories at least, to develop infrastructure to the necessary standard.

"Governments like Finland and Luxembourg want to deliver in the next five years fibre-to-the-home to the vast majority of their populations," explained Paolo Campoli, director of solutions and business development at Cisco European and Emerging Markets. "Finland has on the agenda 100Mbps by 2015 and 1Gbps by 2020, and I see other nations doing something similar." He insists the eventual proliferation of 4G standards such as WiMAX and Long Term Evolution (LTE), which have been trialled at locations in the UK and Scandinavia in the past year, will also justify the ballooning bandwidth volume.  

In the run-up to the announcement, the company promised that its latest innovation would "forever change the Internet and its impact on consumers, businesses and governments". Despite these grand claims, market disappointment at the unveiling was evident. "Everybody expected them to refresh their core routers, but the way they hyped it, I thought there was going to be more to it," Troy Jensen, an analyst at investment bank Piper Jaffray, told Reuters. Even Cisco CEO Chambers admitted that it is "not that exciting to the average consumer right now". Cisco’s share price had risen 4% to $26.13 on Tuesday prior to the announcement, but remained static following the unveiling.

Rival networking equipment vendor Juniper Networks responded to the launch by accusing Cisco of being misleading with its claims of the CRS-3’s performance. "The claim of 12 times the traffic capacity of the nearest competing system is based on a theoretical maximum of 72 interconnected CRS-3 chassis in order to achieve the 322Tbps total capacity," commented Michael Marcellin, vice president of product marketing at Juniper. "This will likely never be deployed in practice due to space, power, and manageability realities."

As a company, Cisco tottered somewhat during the global recession, posting four consecutive quarters of sinking revenues. In February, the business returned to growth when it posted an 8% upturn in revenues to $9.8 billion. 

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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