At the beginning of March Cisco announced the new ‘giant’ router CSR-3.  The performances of this product are huge compared to the current needs of ISP.  What is the strategic view of Cisco to justify this investment? What is the impact for the channel of this strategy?

Cisco invested $ 1.6 billions (these are not penauts even for Cisco) in this 100 Gigabit router to update the core of Internet. Cisco explains that this update is justified by two main business reasons:
- The increase of the consumer market needs;
- The Needs of Multi-directional Networking for the cloud infrastructure.

The increase of the consumer market needs.
Cisco thinks that in a (near?) future the average user will need 15 TB for month.  

fig 1 - future of internet

fig 1 - future of internet

This would mean that a VDSL connection would be on the limit of its capacity for the download stream and totally incapable to deal with services (like videoconference) that require high speed in upstream (the same upstream limit is present for cable connection) . 

fig 2 - vdsl speed

fig 2 - vdsl speed

So, in order to transform this vision in reality, it is necessary that a FTTH infrastructure is generally available.

fig 3 - TTTH speed

fig 3 - TTTH speed

The Needs of Multi-directional Networking from the cloud infrastructure.
For Cisco,  the Cloud Computing Datacenters  require a new Internet Generation not only in the speed but also in the way Datacenters can be interconnected.

fig 4 - internet next generation connection

fig 4 - internet next generation connection

The feature in CSR-3 that allows this new way to interconnect  Datacenters is called the Network Positioning System (NPS).

What’s for the channel?
With an entry level investment of at least 90K dollars the CSR-3 is not a solution for the average ISP (for sure not for my typical ISP customer). What is interesting for the channel is the consequence of this vision of Cisco.
Fig.1 and Fig 3 illustrated very lucrative services that an ISP could provide. Of course, as already mentioned, this implies that an FTTH infrastructure is established; so the extension of possibilities for the ISP will depend of the FTTH business model each nation will adopt. I will be back on this subject.
The second aspect of Cisco’s vision – how to interconnect  the cloud datacenters – and more in general how to interconnect an user to a cloud datacenter can offer, in a short time, new prospectives to the ISP. Already now there are interesting solutions (for example G.SHDSL.bis with EFM Solution) that ISP can implement without waiting for a FTTH infrastructure. Also in this case I will be back soon on the subject.
In a shorter time, another possibility of business for ISP is to enter in the cloud itself to offer the new multimedia services.  

At the end, do you think that Cisco has  a vision or an hallucination?

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To Know more:
fiber to home: opportunities for the channel ?
Cisco® Visual Networking Index (VNI) Forecast, 2009-2014
IPTV: what are the opportunities for the channel?
Clouds on the channel: transition to thunderstorm  or to blue sky?
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