Cisco sees opportunity in online video demand

Video is the new killer application of the Internet, and Cisco Systems says it has a router that can help phone companies and cable operators deal with the onslaught of traffic.

On Monday, the company announced its latest edge router, called the ASR 9000, which provides six times the capacity of its older generation routers. The router, which can shuttle about 6.4 terabytes per second worth of traffic across the network, can move the equivalent of 250,000 digital songs or 200 feature length movies a second, the company said.

Routers are devices that shuttle packets across the Internet. Four years ago, Cisco introduced its CSR-1 router, which is designed to handle heavy loads of traffic in the backbone or long haul part of the network. And now Cisco has introduced the ASR 9000, which will connect the long-distance data network to local networks servicing cities and towns.

"The backbone of the network is well taken care of today," said Suraj Shetty, vice president of service provider marketing for Cisco. "And cable operators and phone companies have done a lot to improve the access part of their networks. We are providing a solution for the edge which connects them. And with the ASR they can future-proof their networks."

Shetty said that over the next few years, service providers will have to upgrade their networks to keep up with a flood of video traffic. From YouTube to Hulu.com, people are watching more videos from the Internet than ever before. And the trend is expected to continue. Today about 25 percent of the traffic traveling over the Internet is video. But by 2012 it's expected that 50 percent of the Internet traffic will be video, Shetty said.

What does this actually mean for consumers? A faster edge network means faster access to content. So when a subscriber at home orders a video on demand, he won't have to wait the two to three minutes that he waits today for the system to retrieve his video.

"With our solution, you won' t see the buffering you usually see when you order a video on demand or when you click to watch a streaming video," Shetty said.

Cisco's new edge router will also help wireless operators transition from their old cellular networks to one based on IP. Previously, the only data carried on a cellular network were short SMS messages or MMS messages. But today, wireless operators are handling e-mail, Web surfing traffic, and streaming audio and video.

But as the world economy slows down, will phone companies and cable operators around the world be able to afford these upgrades? Shetty said that they have little choice if they want to remain competitive.

"The competitive pressure is so strong today," he said. "And carriers need to ensure that their subscribers get the best experience. It takes $600 to $800 to acquire a new customer. And the network becomes a competitive advantage."