Cisco sees the Internet as not just remaining a network of web servers but developing into the "Network of Networks", which will make IP the medium through which all communications, including data, voice, and video will flow. And yes, Cisco does not see much of a future for present circuit-switched communication technologies. As the company think tanks see it, when disruption takes place in the existing telecom world, a new set of winners will emerge and Cisco will certainly be one of them.

This disruption, it believes, is happening in all three elements of the telecommunications network. Cisco sees a major role to play in each one of them. And it is this role, which will bring in the sales that will keep Cisco growing at present rates or even higher, even if there is no big growth in its other lines of business. The service provider line of business already brings in approximately 40 percent of its revenues. This is expected to significantly increase to over 50 percent in a few years.

Transmission Systems

Time Division Multiplexing (TDM) has no role to play in the new scenario—is Cisco’s firm belief. These switches limit the bandwidth capacity of the transport network by processing information slowly. Though Synchronous Optical Network (SONET)/Synchronous Digital Hierarchy (SDH) switches help ease the transition of electric signals into optical pules, they are still based on TDM switching—being able to transmit on just one channel through the fibre. Historically, the core of the network involved ATM switches and SONET/SDH as the two essential elements. With data communications getting involved the router got added as another element. Dense Wave Division Multiplexing (DWDM), which has the capability to practically carry 9.9 Gbps per channel (64 channels of OC-192/STM64 carrying 633 Gbps) came as the fourth element.

Cisco thinks this is too many. It ultimately wants to remove the ATM switches and SONET/SDH equipment that come in between an IP router/switch and the DWDM system, making the system, at least theoretically, much simpler.

Competitors don’t agree to this. SONET/SDH vendors, who are major players in DWDM, see a role for the former which not only provides performance monitoring but also adds a redundancy yet too be matched by the IP-DWDM combo (which is being aggressively tested by Cisco, in association with DWDM startup Ciena). Companies who have been selling circuit-switch based equipment are yet to come to full terms with IP. Many like Lucent, Alcatel, and Ericsson feel their circuit switches can safely co-exist. They concede that more than voice circuits, their equipment today switches data packets but don’t see a direct co-relation of this trend with the business of the carriers. They claim that more than 70 percent of the carrier’s revenue still come from switching voice circuits. This Cisco preaches is not an issue, as voice communications can also be broken into IP packets and sent over the network just like a data packet. IP vendors led by Cisco are working on a feature called tag switching or Multi-Protocol Label Switching (MPLS), which will add the much needed QoS features in IP, or so they claim.

In between the extreme points of views, are a host of other competitors who would prefer sitting on the fence and reaping the rewards. On the router side is Juniper Networks, which has won tech. laurels for its fast routers, with no problems in having strategic partnerships with telecom majors like Ericsson, Alcatel and Nortel, for reselling its products in the global market. Tellabs is deriving good business out of its digital cross-connects, which manage connections between two or more heterogeneous transmission
systems.