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FUJITSU, NEXT-GEN START-UPS TARGET SECOND-TIER CARRIERS

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In an effort to fill out its product portfolio, Fujitsu this week will announce partnerships with three next-generation equipment vendors: Atrica, CoSine Communications and Hammerhead Systems.

Atrica, a four-year-old maker of optical Ethernet access gear, will give Fujitsu a foothold in the carrier-class metro Ethernet market. Two-year-old Hammerhead, with its multiservice edge router, will give Fujitsu customers a migration path from ATM to MPLS, a market that is quickly becoming flooded with vendors (see story on page 17). And six-year-old CoSine Communications, the most mature of the three, will add IP service delivery to Fujitsu's transport offerings.

Although Fujitsu and friends plan to target a broad range of customers, from cable providers to wireless carriers, Fujitsu expects second- and third-tier wireline carriers to adopt these next-generation systems first. The most important customers, the RBOCs, will likely come last.

The non-exclusive fellowship, whose product suite has been dubbed FASST (flexible architecture for subscriber service termination) continues a trend of established vendors relying on start-up partners to help them penetrate next-gen markets (e.g., Lucent/Movaz). But whereas other vendors have named partners one after another following changing customer demands, Fujitsu unveils FASST this week as one cohesive set.

“They put all the pieces together at once,” said IDC analyst Sterling Perrin. “We joked when they came in to see us that it was the most different vendors we'd had in one room at one time.”

Another difference between the FASST quartet and other recent vendor partnerships, according to Perrin, is its virtually exclusive focus on the North American market rather than the global one — a decision made, in the words of Fujitsu Senior Vice President of Data and Customer Solutions Rodney Boehm, “so we don't have to be everything to everybody.”

RBOCs, Fujitsu's steadfast transport customers, are squarely in the crosshairs of that focus.

Selling start-up gear to RBOCs is inherently challenging, and Fujitsu may have difficulty with its chosen partners, which are a little more green than some of the other start-ups that have partnered with “big brother” vendors lately, Perrin said. Many of those other start-ups had appreciable traction with large carriers as a precursor to partnership. When Lucent paired with Movaz, for example, the latter already had won a lucrative MCI contract. By contrast, Hammerhead is only in the trial stage with major carriers. “These are relatively unknown companies,” Perrin said.

However, Hammerhead's unique approach to MPLS migration — handling ATM and MPLS traffic simultaneously — fits well with one of the stated directives of Fujitsu's FASST strategy: allowing carriers to migrate slowly to next-generation networks while still making use of existing assets.

“The problems carriers face [migrating to MPLS] are no longer technical; they're operational,” said Houman Modarres, Hammerhead's director of product management. “A good portion of the traffic is Internet, which is really of low value. That can get pushed to routers.”

And Fujitsu, which is handling all the installation and support of FASST gear, should give confidence to RBOC customers. “Fujitsu has its finger on the pulse of the RBOCs very well — probably better than anybody, quite frankly,” Perrin said.

The low-risk partner strategy gives Fujitsu the freedom to change its lineup if things don't work out, but the company is likely to announce more partnerships in the future regardless.

“We'll be adding to this over time,” said Fujitsu's Boehm. “We're going to move from a traditional transport provider into something that provides a lot more.”

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© 2009 Penton Media Inc.

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