Avici Systems Inc has announced its withdrawal from the router hardware market in order to concentrate entirely on the Soapstone Networks control plane software business it unveiled in February. Final router shipments will take place later this year.
The company, from Billerica, Massachusetts, has long been a minnow in the carrier core routing market, where it is dwarfed to be point of becoming almost invisible by Cisco and Juniper. Its one big customer is and has always been AT&T, so while it will continue to support its existing products, expect to see the US carrier looking for alternatives to replace its technology in the coming months.
Bill Leighton, Avici’s CEO, described the move as part of our continuing strategic plan to drive growth and value for the company by focusing on opportunities in growing markets, though the share price slump Avici suffered after the announcement suggested that the market didn’t see things that way.
Soapstone’s proposition, which it expects to demo by mid-year, involves what it is calling a virtual control plane for carrier networks, deployed on a separate device in the network. Its first product will be a PBT Controller and will be licensed software that could reside on an ATCA-compliant module, or a blade in a blade server from any of the leading vendors.
PBT, which stands for Provider Backbone Transport, is a proto-standard technology which, building on the MAC-in-MAC standard called Provider Backbone Bridging, or PBB, makes a couple of fundamental changes to Ethernet to enable point-to-point, deterministic connections to be set up at Layer 2 for the delivery of Carrier Ethernet services. It is championed by Nortel and BT Group, both of whom contributed to its formulation, but essentially all the other challengers in Carrier Ethernet switch routing (CESRs, i.e. Extreme, Siemens, Huawei and World Wide Packets) are all interested in it as a means of encroaching on the market shares of CESR sector leaders Cisco and Alcatel, who tout MPLS or a variant for the same purpose.
The reason Avici sees opportunities in PBT for the Soapstone control plane, of course, is that it is still a more immature technology that lacks the well-defined control plane that MPLS already has, yet it is attracting carrier attention as a cheaper way to deliver Ethernet services to corporate customers.
While the first iteration of the Soapstone technology will be for PBT, we don’t really care what layer equipment we’re controlling, according to Avici CTO, Larry Dennison. PBT is a Layer 2 technology, while MPLS is Layer 3.
Avici announced the move in tandem with its first quarter figures, which showed a drop in gross revenue to $20.5m (down from $21.4m in Q1 of 2006), while GAAP net income was up slightly at $6.0m from $5.4m the same quarter last year.