Nortel Networks today claimed 'the router is no more' as it slashed the costs of its current router products and announced heavyweight industry support for its new embedded routing technology.
Microsoft and Intel are among the 75 licensees of Nortel's Open IP Environment, a routing and IP protocol technology that will Internet-enable devices ranging from servers, chips and PCs to handheld devices and fridges.
Analysts said the new technology would be cheaper and less complicated to manage than 'old world' router hardware.
"We're taking a look at the marketplace and saying 'how are we going to move this fairly stagnant market along, which is dominated by our friends in Santa Clara [Cisco],'" said Steve Jenkins, vice president of business development at Nortel's European enterprise division.
"The old router is being broken up into pieces and put into devices. The router is no more," said Jenkins.
Nortel has started a rebate program on its enterprise access router products. It is offering a 30 per cent rebate to end users and 10 per cent to distributors and resellers. Combined, Nortel says the savings will make its routers up to 50 per cent cheaper than Cisco routers.
"Cisco has had a lock on the marketplace, but has not siezed the opportunity to expand because it will lose its margins," said Pravin Mirchandani, director of external relations at Nortel European enterprise division. Nortel said the price cuts will not negatively impact its margins on routers in the short term.
Nortel's Open IP Environment has been licensed to 75 companies including Microsoft, which will include APIs in Windows 2000 and NT4, and Intel, which will add elements of Open IP to its Internet Exchange Architecture - a framework for designing reprogrammable silicon that includes its IXP1200 network processor.
Open IP is already included in Nortel's own optical routing products. Nortel expects products from third party developers to come to market in three to six months.
"Nortel Networks' new Open IP software approach to routing, and significantly reduced router pricing, aims to relieve pressure on our mounting base of hardware routers, our limited base of network support staff and our precious base of networking budget," said Mark Leary, vice president of analyst company IDC.
"The routing marketplace is no longer, we have a routing marketplace where the future of routing is distributed to purpose-built devices," said Mirchandani. "One of the problems we have, being driven by a monopoly player, is that because [current routers are] software based, they have not kept up with the demands of the Internet."
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