Cisco: Not a Network Box Seller Anymore?

The company plans a transition to a software-oriented business model.

Cisco Systems may end up being thought of as a software company, five years from now, rather than a networking box supplier, if its network-is-the-platform strategy is successful.

Cisco is working to create what could be described as a network version of a hypervisor, designed to allow customers to more easily plug in the services they want to add to the network without disrupting existing operations, according to Cliff Meltzer, Cisco senior vice president of network management.

The transformation will significantly change how Cisco sells its advanced network services to customers, moving from requiring customers to add another appliance as they add more advanced services such as security or VOIP (voice over IP), to licensing new features implemented in software that can be downloaded over the network, said Meltzer, who spoke at Ciscos C-Scape Conference in San Jose on Dec. 13.

And it will open up information available in the network to third-party developers or other partners to allow them to exploit that information for their own applications.

"The network has a broad view of whats going on with traffic, congestion, service-level agreements or what performance users are getting. If youre making quality-of-service or policy decisions, this is the right place to do it," he said.

/zimages/1/28571.gifClick here to read more about Ciscos move toward becoming a systems provider.

Cisco is working to isolate services using the type of dynamic service provisioning techniques used in the data center. Today those services are intertwined within IOS (Internetwork Operating System), so that a problem with one service can affect others that are running on the same processor. By using multiple partitions running on a given piece of hardware, Cisco can expose its advanced services with wrappers "that allow others to customize for their own business," Meltzer said.

The transformation effort is built on Ciscos SONA (Service-Oriented Network Architecture), which Meltzer described as complementary to SOA (service-oriented architecture)-based applications. "An enterprise using a SOA architecture sees SONA in the same way they see SOA services, so that others can discover and use [SONA services]," he said.

The transformation will not require a significant change to Ciscos hardware for switches and routers, but it will give Cisco greater flexibility in the form factors that advanced services such as security and application acceleration run on, according to Peter Christy, an industry analyst with Internet Research Group.

Cisco at a future date will define for customers the "set of hardware [required] or how you enhance the router or switch you have," Meltzer said.

By more loosely coupling hardware and software, Cisco aims to simplify how customers and partners use its advanced services. In addition, it will eventually give Cisco customers a broader array of purchasing options that work better with customers budgeting processes, the company said.

/zimages/1/28571.gifTo read more about Ciscos SONA, click here.

But Meltzer did not detail what new pricing options Cisco will offer to its customers, although it will be based on usage, rather than by the box. And the five-year time frame he gave for the rollout of a new Cisco software-oriented business model is dependent in part on Cisco implementing the necessary back-office functions in order to support a change to its pricing.

"Customers want to start with less investment and pay as the business grows. We need to make it easy for them to get started. Some customers like predictable funding, some want sitewide licenses. We need more flexibility for customers to purchase software," he said.

And Meltzer said he believes it will take some time for customers to embrace a new way of doing business with Cisco.

For the transformation to be successful, it may require greater interaction between network operations and application owners, who now in most enterprises operate in separate silos. Thats because it will be necessary for users to identify ahead of time which applications require performance guarantees or priority when congestion occurs on the network. Today few network operations organizations have that insight.

Meltzer did not say how soon Cisco will begin exposing programmatic interfaces for third parties to work with. But those interfaces will interact with Ciscos application delivery controller and its AON (Application-Oriented Networking) technology, which in turn will interact with Ciscos advanced services such as security, unified communications, mobility and storage, he said.

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