Cisco's big announcement? A new router

Sure, the hype machine was working in overdrive. But the high-capacity Cisco CRS-3 still bears noting, and it all comes down to one word: video.

Cisco is reminding us that the heart and soul of its business is still the humble router. In this case, maybe a not-so-humble router.

On Tuesday the company announced the CRS-3, its next-generation Internet router for the world's largest Internet service providers. Cisco may have overhyped the announcement just a tad. After a two-week countdown to an announcement that it said would "forever change the Internet," the company unveiled what looks like an upgrade to its existing "core" router called the CRS-1.

Cisco's CRS-3 Carrier Routing System Cisco Systems

While the hype machine may have failed to deliver something truly revolutionary, Cisco's announcement is still significant. The new router offers 12 times the traffic capacity than its older-generation routers offer. It's three times faster than the older CRS-1, which was introduced in 2004. And it can handle 322 terabits of traffic per second, or simultaneous video calls for every person in China, the company said.

The new router, which starts at $90,000, will be sold to the world's largest Internet service providers. These aren't your run-of-the-mill ISPs selling 10 Mbps broadband service to consumers. These companies, such as AT&T, Verizon Communications, Level3, and Sprint, are the Internet service providers that aggregate and shuttle the bulk of the nation's Internet traffic across what is known as "the Internet backbone."

When the new Cisco routers are installed, the average broadband consumer likely won't notice anything new. But over time, they will see the benefits of the upgraded infrastructure. The Cisco CRS-3 will allow these Internet backbone service providers to increase capacity so that new applications, especially video-based applications, like high-definition TV, video conferencing, and 3D TV, can be offered to the mass market.

Cisco CEO John Chambers said this new router will serve as the foundation of the next-generation Internet that will see tremendous growth due to video.

"Video is the killer app," he said. "Video brings the Internet to life and most of the devices that will be coming on the network will evolve quickly into video. "

Chambers said just looking at the devices and applications that were at the Consumer Electronics Show in Las Vegas in January and Mobile World Congress in Barcelona in February are a good indication of what is to come in the future. And he said all these products feed into the Internet, which will load the network with more traffic.

"Whether it was gaming or video or tablets or ESPN bringing 3D sports to TV, it's about video," he said. Chambers added that this video traffic, along with other data intensive applications for things such as health care, will require more bandwidth than anyone could have imagined a short time ago.

Indeed, the new router will play a significant role in enabling all kinds of new applications and services to be rolled out. And as the access broadband networks get faster, more capacity will be needed in the backbone of the Internet to accommodate the traffic. Several broadband providers are already offering 50Mbps and 100Mbps broadband service to consumers. Google also recently announced that it plans to build ultra-high speed broadband networks to test new services and applications that use 1Gigabit-per-second speeds. And if history has taught the industry anything, it's that when more bandwidth is made available, applications quickly come online to use it. Once consumers start using high-capacity applications that necessitate these speeds, infrastructure equipment deep in the Internet backbone will have to be in place to support the flood of traffic.

While the scale and speed of the new CRS-3 is impressive and definitely takes the Internet to a new level of capacity, will it really "forever change the Internet?" as Cisco billed the announcement.

The Cisco's announcement is more of an incremental upgrade to the company's existing product, the CRS-1. IP routing is Cisco's bread and butter. It's not surprising that the company has developed yet another big router to keep up with growing Internet traffic demand.

Zeus Kerravala, a senior vice president at the market research firm Yankee Group, agreed. But he said the announcement is still very important to the growth of the Internet and future innovation of new applications.

"There is no way that a routing announcement could live up to the hype that Cisco created," he said. "But if you look down the road, when consumers want to watch multiple channels of high-definition video and 3D programming, and as more mobile apps come onto 4G wireless networks, companies like Cisco and its rival Juniper Networks need to push the envelope in terms of routing engineering."

As for Cisco's consumer strategy, which this announcement was rumored to be about, we're still waiting for a killer set-top box or some other revolutionary product that will truly change the Internet as we know it.

Update, 10:30 a.m. PST: added more background information and comments from analyst.

 

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