On Aug. 12, websites around the world suffered a slowdown. What went wrong? Routers charged with delivering extraordinary amounts of Internet traffic were no longer able to store new addresses and pathways, stalling everything from e-commerce traffic to your favorite pet videos. Here's a closer look at the problem and the companies best positioned to solve it.

A problem near the core

If you think of the Internet as Mount Everest, then routers are sherpas for data. They carry packets to predetermined destinations along some 512,000 known paths, each one stored in a spreadsheet-like list called the Internet routing table.

And that, Fool, is a problem. Older routers don't have the memory to store more than 512,000 routes. Fortunately, the most critical, or "core," routers seem able to handle the load. Too many others choked as the routing table grew past 512,000 entries on Aug. 12, creating a ripple effect that hit sites far and wide.

Credit: cidr-report.org.

Most of the major Internet service providers were affected, including AT&T, Cogent Communications, Comcast, Level 3 Communications, Time Warner Cable, and Verizon, according to downdetector.com data cited by Data Center Knowledge.

For now, much of the Web is up and working exactly as intended. But we could see more Internet outages soon enough. Core routers tend to favor the much faster and more expensive ternary content addressable memory, or TCAM, over RAM. Replacing a core router isn't cheap, and upgrading TCAM isn't attractive given the expense and hassle required.

Workarounds, or replacements?

What can be done? For the more technically minded, Cisco Systems (NASDAQ:CSCO) published a series of workarounds for its older products here. There's also a hack some operators might be willing to try, as Dyn's Jim Cowie explained in this blog post:

You can change the default configuration to reclaim more TCAM for IPv4 ... but only at the expense of support for IPv6, the "next generation" Internet addressing scheme that continues to struggle for widespread adoption. Sadly, this elderly gear was shipped at a time when the world was full of hope for the emergence of a real, live, flourishing IPv6 routing table.

For those who don't know, IPv4 is a 32-bit addressing system for defining destinations on the Internet. IPv6 -- a purported replacement -- uses a 128-bit addressing system. Think of it like the U.S. zip code. Five digits works because we live in a country with finite borders. Cyberspace isn't bound by the same physical limits; 128-bits is the safer choice because it allows for more destinations.

Hacking the newer memory to allow old routers to store more than 512,000 routes should work for a while. But what happens when the routing table grows to 750,000 pathways? 1 million? That day may come sooner than you think. Cisco says the number of entries doubled over the past six years. 

Four vendors with the power to help fix the Internet

As the Internet balloons, the devices that serve it must grow in response. Cobbling together a fix isn't growth. More likely, Internet Service Providers and major enterprises are going to have to upgrade their routing infrastructure. Industry tracker Dell'Oro Group says investors can expect double-digit growth in 2014. These four companies -- the core router market leaders, in order, according to Dell'Oro Group -- are most likely to profit from the buying:

Core Router Model
Differentiating Claims


Network Convergence System 6000 Series

"The series facilitates the Evolved Programmable Network to support virtualization and programmability at the lowest total cost of ownership ..."

Juniper Networks (NYSE:JNPR)

T Series Core Routers

"Features include MPLS Differentiated Services (DiffServ-TE), point-to-multipoint label-switched paths (P2MP LSPs), nonstop routing, unified in-service software upgrades (unified ISSUs), hierarchical MPLS, and others."

Huawei Technologies

NE20E-S Series Unified Service Router

"... adopting Huawei's self-developed VRP (Versatile Routing Platform), NE20E-S features carrier-level reliability, line-rate forwarding capability, well-designed Quality of Service (QoS) mechanism, strong service-processing capability, and excellent expansibility."

Alcatel-Lucent (NYSE: ALU)

7950 Extensible Routing System

"...revolutionizes the economics of delivering the Internet by offering up to 5 times the density of existing alternatives while consuming only one-third the electricity."

Source: Wikipedia, company data.

Foolish takeaway

Should we expect more Internet outages as its infrastructure gets an overhaul? I'd say so, but probably not on a raid-the-grocery-store-for-dry-goods scale. Rather, watch for news of isolated incidents and keep these stocks on your watchlist. A wave of router upgrades may finally be in the works, and these companies are poised to profit most.

[Editors note: Corrected misspelling of CEO name to Cowie]