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NOVEMBER 29, 2004
By Alex Salkever Does XORP Have Cisco's Number? [Page 2 of 2] CHEAPER ALTERNATIVE. As always, cost is a driving force. In the U.S., 1.5 million business sites route data that work with common Internet protocols, Nolle says. The average data rate these business sites support is less than 200 kilobytes per second, and they control that with gear that commonly costs thousands of dollars. The average consumer-broadband connection, by comparison, is over 800 kilobits. "You can look at those numbers and say a consumer router costs $79," says Nolle. "How long is it before routers for these 1.5 million sites cost $79?" XORP is aimed straight at that possibility. It's an open-source version of software like Cisco's IOS that can run on plain-vanilla PCs for less strenuous tasks in a network. In time, Ghosh hopes XORP will work with networking chips and integrated circuits designed specifically for more powerful data routing and built by big semiconductor companies. While XORP's no-cost price tag is certainly attractive, Ghosh believes what will really win adherents is the added flexibility it affords network engineers. "If you decide you want to add a new piece of software for something like security or e-commerce on a router, you can't. You have to go with what's on the router. If you're running a XORP router you can do whatever you like," Ghosh says. PATIENCE REQUIRED. Cisco appears vulnerable to an open-source threat over the long haul. Chip giant Intel, which already makes silicon packages meant for networking, would love to supply makers of switches and routers with generic chips and circuit boards, thus displacing the customized integrated-circuit designs used by Cisco. Since many companies already use switching and routing technology, XORP could draw skills from a large body of programmers interested in seeing it succeed. "You'll see people using the open-source software because they might want to build their own [technology] for their particular needs," says Stephen Mock, vice-president for marketing at IP Infusion, which builds routing software and also maintains an open-source software routing effort called Project Zebra. "To run something like that on a Cisco router, even if you're a major carrier like France Telecom, you may have to wait two years until Cisco puts it in the code base," If all that sounds familiar, it should -- a similar dynamic has driven the rise of Linux. PRICE WARS? None of this is to say Cisco is about to be mown down by an open-source onslaught. Unlike operating-system makers such as Sun Microsystems (SUNW ) and Microsoft, Cisco has been careful to make its products adhere to strict industry standards that ensure networking products from different companies can easily work together. And thanks to low-cost competition from the likes of the Chinese company Huawei, Cisco has already cut its prices by double-digit percentages over the past three years. What's more, Cisco is already selling open-source products. Its Linksys subsidiary is the leading maker of networking gear for residential and home-office broadband users. Linksys uses a stripped-down version of Linux as its operating system. Still, Dell (DELL ), the king of commodity hardware and a huge beneficiary of the open-source movement in servers, is pushing hard to grab low-end market share from Cisco. Since launching its local area network (LAN) switch line in 2002, Dell has taken 3% of the total market. FUTURE THREAT. Sales of those products grew by 38% year-over-year in 2003, according to Synergy Research. Competition from Linux lovers such as Dell could be a huge impetus for the development of cheap hardware to go with the open-source networking software. None of this will happen overnight. But a one-two punch from low-cost open-source routing hardware and software could eventually become a major drag on Cisco's thriving business.
 Salkever is technology editor at Businessweek Online
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