Yeah, Cisco Changed the Internet -- Again

Cisco Systems (Nasdaq: CSCO  ) promised to "forever change the Internet" this week. So what was the big deal? A new network router that's designed to handle truly torrential traffic loads.

I know, that doesn't sound terribly inspiring after Cisco's pre-announcement buildup in the grand tradition of Apple (Nasdaq: AAPL  ) . But there is a real payoff here, and Cisco isn't lying about the CRS-3 carrier router's potential impact on the future of networking.

The CRS-3 is a drop-in replacement for the older CRS-1 and customers can reuse much of their existing infrastructure around an upgraded router. This is not the kind of machine you'll see in the networking room of a medium-sized business or a community college, but the type that knits the worldwide Internet backbone together. Any improvement in back-end switching capacity will eventually translate into faster and more responsive networking overall.

There are about 5,000 CRS-1 systems installed worldwide today, and Cisco would obviously like to see all of them updated to CRS-3 machines. AT&T (NYSE: T  ) seems enthusiastic about the new hardware, and rivals like Verizon (NYSE: VZ  ) , Sprint Nextel (NYSE: S  ) , and Level 3 Communications (Nasdaq: LVLT  ) should be looking into upgrades as well. And on the other side of the tracks, you have to assume that Juniper Networks (Nasdaq: JNPR  ) is busy working up an answer to Cisco's CRS-3.

The new model can handle three times the traffic of the Cisco system it replaces -- using the same floorspace footprint and less power. As Cisco puts it, this router can transmit a digital copy of every motion picture ever filmed in less than four minutes, or the entire printed contents of the Library of Congress in about a second. Nobody really needs that kind of capacity today, but Cisco envisions and wants to be a part of a future where such hyperactive networks are commonplace.

In the long run, this new generation of networking infrastructure will let the network do tricks we can't even imagine today, like feeding high-definition video to a billion smartphones at once. It's not an immediate difference-maker for Cisco or anybody else, but a long-term positive for any business that cares about high-speed networking.

Who do you think will benefit the most from faster and better networking? Share your thoughts in the comments below.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Sprint Nextel is a Motley Fool Inside Value pick. Apple is a Motley Fool Stock Advisor choice. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (7) | Recommend This Article (17)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 10, 2010, at 6:25 PM, 98analysis wrote:

    http://www.fool.com/investing/general/2010/02/22/its-the-end...

    Ha, turns out it's not the end of Cisco, but the end of the old Internet model.

  • Report this Comment On March 10, 2010, at 8:56 PM, 0penfool wrote:

    Generally, I have been pleasantly surprised by the articles written about Cisco's over-hyped announcement yesterday. Most analyst appear to be more tuned in than in the past. They understand that Cisco has not announced anything new here.

    However, I have to wonder where you were the day that Juniper announced their new Trio Chip and 3D scaling for their EXISTING MX product line. John Chambers' examples of "transmit(ing) a digital copy of every motion picture ever filmed in less than four minutes, or the entire printed contents of the Library of Congress in about a second" was borderline plagiarism. Founder and CTO of Juniper, Pradeep Sindhu used almost the exact same analogies when describing the scalability Juniper has achieved in their next generation silicon. Your suggestion that Juniper is working on an answer, well...I would just respectfully ask that you do a little more homework and stop using Cisco as the barometer. They are a great company, but their days as the industry innovator are over... They are nothing more than a follower with slightly better marketing...

  • Report this Comment On March 10, 2010, at 9:02 PM, 0penfool wrote:

    BTW, Pradeep's comments were in Oct. 2009. Check out the Press Conference here, slide 33. It is worst than borderline plagiarism. It is outright...

    http://www.slideshare.net/junipernetworks/juniper-new-networ...

  • Report this Comment On March 11, 2010, at 12:31 AM, lurkedq wrote:

    Can people just start using petabytes or exabytes (or some real number) instead of these metaphorical comparisons about capacity?

  • Report this Comment On March 11, 2010, at 10:24 AM, nananana9 wrote:

    Here come bandwidth PRICE WARS again!

    I can visualize the original Star Wars scrolling text saying instead saying: Price Wars... Once upon a time there were the companies of ........... fighting to stay alive and .....

  • Report this Comment On March 11, 2010, at 10:25 AM, nananana9 wrote:

    Here come bandwidth PRICE WARS again!

    I can visualize the original Star Wars scrolling text saying instead saying: Price Wars... Once upon a time there were the companies of ........... fighting to stay alive and .....

  • Report this Comment On March 16, 2010, at 11:22 AM, mimi20102010 wrote:

    Stop buying Cisco BS stuff.. This company has

    broken every labor law ever existed... It is just a big marketing machine with Indian managers slaving other Indians.

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