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    Cisco Ending ADC Business, Ceding Market to F5, Citrix, Riverbed

    By
    Jeff Burt
    -
    September 20, 2012
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      Cisco Systems, which for more than a year has been undergoing a transformation that includes shedding underperforming businesses, reportedly will no longer develop its ACE load-balancer technology, apparently ceding the market to rivals such as F5 Networks and Citrix Systems.

      JMP Securities analyst Erik Suppiger wrote in a research note late last week that Cisco officials had been telling salespeople to stop promoting the Application Control Engine (ACE) 30 load-balancer module for new deployments, though the networking giant will continue to sell and service the product for existing customers.

      “We believe Cisco’s de-emphasis on selling the ACE for new deployments is a more recent development that reflects more of a shift away from the application delivery controller market,” Suppiger wrote. “Cisco has been losing market share in the ADC market for several years, and we believe this will accelerate the company’s share erosion.”

      Cisco this week confirmed its decision to the media, with spokespeople saying it was part of a larger routine assessment of product lines to see which are viable and which can be shed. Cisco’s ACE application delivery controllers (ADCs) are found in the company’s Catalyst 6500 switches and 7600 routers, and offer a range of capabilities, from load balancing to application acceleration to security. They become increasingly important in virtualized and cloud environments, where the movement of virtualized workloads is much more fluid.

      Over the past few years, Cisco has seen its share of the market drop as companies like F5, Citrix, Riverbed Technology and A10 Networks have taken over. According to a Sept. 12 report from market research firm Dell’Oro Group, the ADC market will grow to more than $2 billion by 2016, with sales of virtual appliances fueling a lot of that growth. Revenue from virtual appliances will jump from less than $50 million last year to almost $500 million by 2016, according to Dell’Oro analysts.

      “We also feel that F5, as the strong market leader, will be well-positioned to capture a large portion of the share,” Suppiger wrote in his research note. “Other players that may benefit include the 2nd largest vendor, Citrix, which controls 16.8%. We also believe privately held A10 Networks, which controls 6.2% of the market, is also well-positioned to gain share from Cisco.”

      Some of these companies already are looking to take advantage of Cisco’s backing away from the market. A10 officials announced Sept. 18 a program that offers Cisco ACE users up to $24,000 plus installation and migration services for trading in their Cisco products for A10’s AX Series ADCs.

      “With our ACE trade-in program, we are making it both easy and cost-effective for customers to migrate to a solution that will increase performance and flexibility for business services while reducing total cost of ownership,”A10 founder and CEO Lee Chen said in a statement.

      F5 executives told news outlets that they were planning to ramp up a migration program they already have in place.

      Cisco has undergone a restructuring over the past year after the company suffered through several quarters of disappointing financial numbers, thanks in part to an aggressive effort to expand Cisco’s reach into new markets. Among the moves Cisco officials have made to streamline the company have been shuttering businesses that were losing money or underperforming, including much of its consumer offerings-such as the popular Flip video camera-and the Android-based Cius business tablet.

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.
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