Will Open Source Kill Cisco?

Cisco enjoys fat-and-happy profit margins for its routers and other networking gear, but an open source startup may sound the death knell for such high-profit hardware. Vyatta is building routers and other net gear using open source software, and has its sights set squarely on Cisco. So reports Om Malik in this Business 2.0 piece. Malik says that the company's routers, based on open source software, will go into beta this summer, and that prices for them may only be a fifth of what Cisco charges.

The article says that the routers are state of the art, and will handle video on demand and VoIP.

The routers are based on XORP -- extensible open router platform. What makes XORP a potential Cisco killer, Malik note, is that "The versatile open-source application can direct data traffic for a giant corporation as easily as it can manage a home Wi-Fi network."

So it can run not just routers, but any kind of networking gear, to home routers, firewalls and beyond.

The bottom line? Cisco, Juniper, Nortel and other high-margin networking hardware makers may be in for trouble.