But perhaps even more ominous for Cisco, CNN reported today that Alcatel-Lucent's new 7950 XRS is five-times faster than Cisco's largest and greatest core router, the CRS-3. Readers may recall the embarrassing hype when Cisco touted that its CRS-3 would forever change the Internet.
Alcatel-Lucent believes that core routing platforms must scale in multiple dimensions to
match evolving capacity demands. And they must do so without compromising performance
In the IP core they must offer scalable IP routing and Internet peering, optimized for 100G, with full resiliency and the ability to switch at the MPLS layer when network design and traffic mix show it is more efficient to do so.
Within rapidly expanding metro cores they must handle modes of operation that span traditional IP core routing and MPLS switching, and offer Layer 2 and 3 VPN infrastructure service capabilities.
Within the cloud infrastructure they must offer high-speed and low-latency datacenter interconnection for efficient content distribution and disaster recovery.
The ideal core routing platform possesses the flexibility to adapt and deliver this new range of capabilities on a single platform, with appropriate economics and consistent operations and management. It can scale to levels that let it thrive in the network for the next decade, while minimizing the space and power costs of operations.
Inefficiencies in the core drain service provider profits. The Alcatel-Lucent 7950 XRS delivers equivalent core capacity in 1/5 the space using 1/3 the power, which translates into substantial operational cost savings relative to the status quo. At network scale, the 7950 XRS system benefits translate into significant savings on Total Cost of Ownership (TCO). Network modeling by Bell Labs shows that a 16-node core network serving 30 million subscribers over a five-year period yields service providers a recurring savings of more than 50 percent on space and power - which amounts to millions of dollars in operational expenses.
Reducing operational expenses in the core:
A key driver of the lower OpEx of the Alcatel-Lucent 7950 XRS is that its design necessitates fewer chassis to meet the same network traffic requirements and uses a single chassis type throughout the network to support both LSR and P-Router requirements. The 7950 XRS is powered by 400G router silicon, the Alcatel-Lucent FP3 chipset launched in June 2011.
Note: The 400 Gbps slot capacity of the 7950 XRS aligns efficiently with 100 GE port requirements. Competing core routers strand slot and system capacity because their slot capacities do not align with 100 GE port requirements. For example, one competitor's 140 Gbps slot capacity strands 29% of the available capacity when used for 100 GE ports.
Vendors' service contract costs are included as part of CapEx rather than OpEx because they are explicitly linked to equipment cost and are included in each vendor's contract negotiation process.
The 7950 XRS-20 fits within a single, standard 19" rack and supports total routing capacity of 16 Tb/s across its twenty slots. The 7950 XRS-20 can be upgraded to 7950 XRS-40, doubling total system capacity to 32 Tb/s in two standard 19" racks and supporting up to 160 100GE ports in a single router, or to multi-chassis configurations to ensure continued scaling as service provider needs warrant. The 7950 XRS-20 and 7950 XRS-40 are designed to support 1 Tb/s per slot of aggregate interface capacity, paving the way for terabit ethernet interfaces as technology evolves. The 7950 XRS-16c is a single chassis system optimized to meet the needs of regional networks and smaller locations, with a total system capacity of 6.4 Tb/s across sixteen interface slots. View the 7950 XRS data sheet.
The FP3 chipset remains the only 400G NPU available today, and is at the heart of the 7950 XRS family of core routers. Leveraging this innovation, the 7950 XRS offers unmatched density for 100GE interfaces, fast becoming the currency of the core, as well as 10GE and 40GE interfaces, which have been the norm to date. The 7950 XRS supports up to 160 100GE or 1600 10GE interfaces in a single 32 Tb/s router, or up to 80 100GE ports in a single standard telco rack, with future options for multi-chassis expansion. The FP3 provides the 7950 XRS with the ideal processing power to support high density 10GE, 40GE, 100GE, and future 400GE interfaces without wasting slot capacity.
The SR OS supports a broad array of capabilities aimed to minimize service disruption, including non-stop routing, stateful failover of protocols, and in-service software upgrades (ISSU), along with service assurance and monitoring tools across IP, MPLS, and Ethernet domains.
The 7950 XRS family is managed by the Alcatel-Lucent 5620 Service Aware Manager (SAM) which is designed to manage transport and infrastructure services and provides service-level visibility into the network as needed across the range of IP core routing, MPLS switching, and infrastructure service deployments. The Alcatel-Lucent management offering includes tools such as the 5650 Control Plane Assurance Manager (CPAM) which work in conjunction with the 5620 SAM to provide control plane visibility and scenario planning and simplify network operations. Further, as service providers move to streamline operations between the IP and optical transport domains of their network, the 5620 SAM provides common management of the Alcatel-Lucent 1830 PSS family of integrated DWDM. This adds a level of cross-layer visibility that will prove highly beneficial to optimizing overall network turn-up, troubleshooting and operations.
Point-to-Point Ethernet VLLs, Multipoint Ethernet VPLS and IP VPNs for use in delivering core infrastructure services.
Extensive OA&M features including Ethernet CFM (802.1ag, Y.1731), EFM (802.3ag), TWAMP and a full suite of MPLS OA&M tools.
RBC Capital Markets Managing Director - Mark Sue, provides his take on the new Alcatel-Lucent 7950 XRS:
"Alcatel, after years of denial, finally announced and showcased its 7950 XRS family of high end routers to target the $4B core router market. The core router market has been a duopoly between Cisco (~61% share) and Juniper (~28% share) with Huawei in third place (~9% share). While entry into the core router market has been difficult for a slew of vendors, Alcatel's success in the $8B edge routing market (#2 global vendor) may mean eventual traction, especially with existing customers."
Sue continued, "Alcatel's announcement came with endorsements from existing large service provider customers: BT, Verizon and NTT all of whom currently purchase gear from Cisco and Juniper. Alcatel has existing customer relationships with 450 global carriers, which may help accelerate market adoption and shorten sales cycles. The new 7950 XRS is built on Alcatel's SROS, which may help carriers transition from the company's edge routers to core routers."
Sue added, "Alcatel's gross margins are currently at a near-term low of 30.3% and incremental core router wins may nudge margins higher. As a new entrant, Alcatel has room to improve margins with core router sales (core router margins are near ~70% for Juniper and Cisco). We note that the move may be marginal due to the IP division's making up 11% of total revenues (~€1.7B annually). Conversely, Juniper with gross margins of 62.6% vs. peak of 70.7% and Cisco gross margins of 63.1% vs. peak of 70.8% may see margins decline over the long term as a new entrant impacts the industry structure. Core routers make up ~20% of revenues for Juniper and ~4-5% for Cisco."
Sue concluded, "Alcatel claims its 7950 XRS router can support 5X more density, consume 66% less power and take up less space than that of leading competitors' products. The 7950 XRS-40 (double stack chassis) can scale up to 32Tbps and handle up to 160 100GE ports. The midrange 7950 XRS-20 (single stack chassis) supports half that of the XRS-40 and the smaller XRS-16C can handle 6.4 Tbps of capacity and 32 100GE ports. The 7950 XRS router is built on Alcatel's internally developed 400G NPU based on the FP3 chipset and runs Alcatel's SROS to have a unified operating system across its IP products."