Cisco is embarking on a new direction as it announced Tuesday details of its first move into the messaging middleware business with its Application-Oriented Network (AON) business unit.

With AON, Cisco is adding more intelligence to the network, enabling the network to better understand business application communications to support more effective and efficient business decisions, according to company officials.

"AON is a new technology direction for Cisco as well as a new product offering," said Stephen Cho, senior director for product management in Cisco's AON business unit.

AON supports Cisco's vision for the Intelligent Information Network and is a network-embedded intelligent message routing system that integrates application message-level communication, visibility, and security into the fabric of the network, said Cho.

"AON enables a network to speak the language of applications with the native understanding of application messaging in the network that allows a deep inspection of the packets," he said.

Cisco will roll out the first products in the AON group later this year. The initial offerings will be a blade that can be used with Cisco switches and a branch office router. Eventually, the company will add a stand-alone AON device and a branch office router that connects to SAP applications, said Cho. The AON products will be about the size of a hardback book, he said. Pricing on the products will be announced later this summer, said Cho.

Cisco is hardly going it alone in providing these services. It is also bringing aboard third-party providers who can build add-ons to Cisco's products. IBM and Tibco Software, for instance, will participate in the middleware space, building products that will allow AON to interpret messages sent by those middleware systems.

While it might look as if Cisco's AON and IBM's WebSphere products would compete, IBM officials said the collaboration between the two would work to the customer's benefit. The goal of the collaboration is to create stronger integration between WebSphere and a number of network infrastructure layers as a way of reducing the complexity and total cost of ownership by simplifying IT infrastructure, according to IBM officials.

Another benefit of establishing tighter integration between the two companies' respective technologies, according to IBM officials, is it can serve as a building block for a service oriented architecture (SOA). This in turn can help corporate users create an on demand business that better integrates data across the enterprise as well as externally with business partners, said officials at IBM.

By embedding the WebSphere MQ client as part of AON, it marks the industry's first network-based messaging support for business applications. One of the major benefits is Cisco/WebSphere combination can handle processes traffic based on priority, making it easier to enforce service-level agreements and to handle traffic skews, officials from both companies said.

"Adding intelligent application message handling to the network enables applications and the network to work together as an integrated system," said Taf Anthias, vice president and general manager of the AON business unit at Cisco. "It makes sense for us to collaborate on this initiative with IBM, given IBM's position in the application integration middleware market," he said.

According to IBM officials, WebSphere MQ now holds an 83 percent market share and it used by 75 percent of commercial banks worldwide.

With SAP, Cisco is working to integrate AON and Enterprise Services Architecture (ESA) with the software giant's SAP Business One software.

"By combining ESA and AON with SAP Business One, SAP's simple yet powerful solution for small and midsize organizations, we will have the ability to deliver even more significant customer benefits for parent companies and their subsidiaries, such as improved application security, easier application deployment, and even better integration, better business visibility, and network-based policy management," said George Paolini, executive vice president for platform ecosystem development at SAP.

In addition, Cisco is working with other services and software firms, including: Actional, ConnecTerra, Contivo, CXO, EDS, Infogain, ManTech, SAIC, Trace Financial, TransAct Tools, and Verisign to build additional add-on products and services to the AON architecture, said Cho. Cisco has established an AON partner support, training, testing, certification, and marketing services program, said Cho. "We expect to have other partners to announce as well," he said.

IT analysts said Cisco's move into more middleware-type products made sense.

"The nature of the enterprise network is evolving from a low-function communication service to a high-function Enterprise Nervous System (ENS)," said Roy Schulte, vice president and research fellow at Gartner. "This is changing application design and IT management practices in fundamental ways. In a conventional architecture, intelligent application systems interact through a low-function, fairly 'dumb' network. In an ENS-based architecture, by contrast, the network is as intelligent as the applications. The ENS offloads logic from the application systems by transforming and redirecting messages and providing other services as appropriate," he said.

Ed Scannell contributed to this story.