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Commentary: An IronBridge too far

The apparent bankruptcy of IronBridge Networks demonstrates the cutthroat nature of the high-end router market dominated by Cisco Systems and Juniper Networks.

    By Bob Hafner, Gartner Analyst

    The apparent bankruptcy of IronBridge Networks demonstrates the cutthroat nature of the high-end router market dominated by Cisco Systems and Juniper Networks.

    See news story:
    IronBridge to file for bankruptcy protection
    The main question facing this market segment is the number of core routers that service providers will need. Although long-term demand for high-speed routers will be significant, the market remains at an early stage. (The economic slowdown suggests that the market will not grow as fast as analysts previously forecast.) Optical wavelength switching has the potential to reduce the amount of routing that needs to be done. Technologies such as MPLS (Multi-Protocol Label Switching) handle traffic at the edges of the network rather than the core--and the network has many more edges than cores.

    With this change in outlook, start-ups such as IronBridge face many significant hurdles. A high-speed core router is difficult to get into a salable form, in part because it requires unusually specialized and expensive R&D efforts. Having products that support high-speed interfaces, such as OC-192 (about 10gbps), is a requirement for market entry that IronBridge had not yet incorporated.

    Finally, IronBridge was also slow to get its product to market--its router was still in beta testing with two clients--and the two vendors that got there first, Juniper and Cisco, established a firm hold on the market.

    For now, few serious challenges will likely occur to Cisco's and Juniper's dominance. Such challenges could only come from two directions. On the one hand, large established players such as Nortel Networks and Alcatel have the resources to back high-end router development but have decided that better opportunities for growth lie elsewhere, likely on the network's edge.

    For this reason, Gartner believes, Alcatel did not step in to continue IronBridge's funding and Nortel has stepped away from Avici Systems. On the other hand, the harsher financial and economic climate means that start-ups such as Avici, IronBridge and Pluris cannot readily get funding from established players or venture capitalists.

    These factors have left Cisco and Juniper in possession of the field. Despite some nibbling at the edges by secondary players in this market, customers have reached a level of comfort with them that other vendors will find hard to match. Cisco and Juniper have adequate, proven products that will likely fill the needs of the moderate number of service providers now looking for high-speed routers.

    (For related commentary and tips for designing a wide-area network, see TechRepublic.com--free registration required.)

    Entire contents, Copyright ? 2001 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.