Cisco's 'earth-shattering' announcement

    For all you folks who had dreams of flying cars or Cisco (CSCO) announcing the purchase of EMC, what CEO John Chambers revealed Tuesday after weeks of hype promising to “change the Internet forever” (and, it was hinted, take on Google (GOOG) in the process) was … a new router.

    Dubbed the CRS-3 (in a sort of “Spinal Tap” marketing move, Cisco races past predecessor CRS-1 and goes all the way to three), this router is capable of delivering 322 terabits per second of data. To put that in some perspective that’s enough networking muscle to allow everyone in China to make a video call simultaneously, or to stream every motion picture ever created in less than four minutes, according to Cisco. You could also have half the population of China video chatting while watching half the movies ever made – or something like that.

    The question of course, is does this new networking muscle change the Internet forever?

    The short answer is yes, but it was headed in that direction anyway – toward greater use of all forms of digital video, and toward cloud-based computing. Cisco’s new router—priced at $90,000 and in trials now— didn’t create those trends, but it will hasten their growth. If you are Apple with its media strategy or any internet service provider you are loving this. If you are among the legion of emerging cloud service providers this is up your alley too. AT&T (ATT) has already been in trials with the new router.

    Cisco was dinged by the networking world in 2004 when the CS-1 was seen as an expensive piece of hardware that provided capacity that no one really needed. The notion of everyone in China video-conferencing at the same time might seem far-fetched today, but additional capacity always has a way of getting used and often in surprising ways. Chambers knows that, and he is betting on it with this new router. Chambers is projecting that Internet traffic will grow in the range of 200% to 500% per year over the next several years. “Especially with the expansion of video,” Chambers says. “For me, this is an instant replay of 2004, it’s Cisco taking the leadership for the future and where markets are going to go.”

    Is that as sexy as “changing the Internet forever?” No, but it about sums everything up. Cisco, no matter how hard they try, has never been sexy, and today’s news didn’t change that. Routers and switches and all that backbone gear is what Cisco does best, so if you lost a bet with your networking buddies about what the big announcement was going to be (like I did) all I can say is: it’s you’re fault. What did you really expect, flying cars?