Avici aims at Cisco with new device

High-end equipment-maker Avici Systems is hoping to produce bigger profits by expanding into the hot metropolitan networking market.

Avici, which competes in the heavy-duty network routing equipment market against Cisco Systems and Juniper Networks, is building lower-end networking devices in hopes of drumming up more revenue in a bad climate for communications gear-makers.

The company on Tuesday will announce a new router aimed at metropolitan networks, a market expected to grow from $6.3 billion in revenue in 2000 to $17.2 billion by 2003, according to analyst firm Infonetics Research. With the move, Avici joins Cisco, Riverstone Networks, Foundry Networks, Extreme Networks and others in the emerging market.

Avici ranks a distant third in the market for high-end routers with a 4 percent market share. Cisco leads with 60 percent of the market, followed by Juniper with 35 percent, according to analyst firm the Dell'Oro Group. High-end routers are devices that telecommunications service providers use in the "core" portion of their networks, where most Internet traffic travels.

But with service providers spending less during the economic slowdown, Avici is hoping to generate more revenue by selling into different markets, said Esmeralda Silva, Avici's director of strategic marketing. The company last month cut its third-quarter revenue forecasts by half and announced it would lay off 55 employees, or 14 percent of its work force.

Avici's high-end router feeds Internet traffic into metropolitan networks, while the company's new lower-end router, called the SSR, helps speed the delivery of Net traffic within metropolitan networks.

Avici's new lower-end router, available now, will allow service providers to offer business customers new Net-based services, such as video over the Internet or the ability to order extra bandwidth anytime they want, Silva said.