Cisco pushes for bigger network role

Cisco Systems on Tuesday staked a wider claim on enterprise IT as it kicked off its Worldwide Analyst Conference, introducing an ambitious plan for services-oriented infrastructure and a new application acceleration initiative.

The Service-Oriented Network Architecture (SONA) calls for a network that links all the resources in an enterprise and has a set of built-in services that work across all those resources, said Charles Giancarlo, Cisco's senior vice president and chief development officer, in a keynote address. This "intelligent network" can help the enterprise better take advantage of storage, clients, servers and other IT resources, he said.

"The network is the one element that touches every one of those things," Giancarlo said.

Whereas service-oriented architectures (SOAs) tend to take diverse IT resources and use complex integration work to link them, Cisco's SONA uses the shared network as the glue between the pieces, he said. With SONA, the network can provide security, storage and server virtualization, and mobility services to make all applications safely and rapidly available to users anywhere, Giancarlo said.

For example, Cisco's AON (Application-Oriented Networking) technology, announced in June, goes beyond carrying packets to providing communication among diverse applications, he said.

"It's a universal translator for applications, and it manages all the ... traffic between these applications in a way that is much less burdensome and much more common between the application environments," Giancarlo said.

A key piece of the SONA is Application Networking Services (ANS), a set of technologies including AON that the company on Tuesday designated as the ninth of its "advanced technologies" where it is staking a claim to take first or second place in the market. The other eight include successful initiatives such as Cisco's moves into voice and home networking.

Cisco is investing in SONA, as well as in video through its recent deal to buy set-top-box maker Scientific-Atlanta Inc., to get ahead of major trends in communications, according to President and chief executive officer John Chambers. As TV and video transmission moves to IP in telecommunications networks around the world, demand for IP network bandwidth will grow at several times the current rate worldwide, he said.

"If you didn't design it into your products five years ago or six years ago ... it's too late," Chambers said. Keeping ahead of the curve is what will keep Cisco growing at 10 percent to 15 percent over the coming years, he told the audience of industry and financial analysts.

Another growth area for the company will be small and medium-sized businesses, or the "commercial" market, Chambers said. On Tuesday, Cisco unveiled Smart Communications Services, a new approach to the market in which Cisco's partners, including carriers, will sell a package of devices and in some cases a set of services to run over them, according to Giancarlo. The approach was kicked off with Linksys One, a program Cisco announced earlier this year with its home and small-business subsidiary.

The intelligence Cisco is building into the network could eliminate much of the tedious integration work that enterprises now have to carry out to make disparate systems work together, said Steve Kamman, an analyst at CIBC World Markets, in New York. About 40 percent of the cost of a new application is integrating it with what's already running in an enterprise, and that cost is going up, he said. Cisco's SONA might eliminate half that cost, Kamman believes.

IT executives need those savings, he said. The main challenge of IT executives over the next several years will be "opening up some room in an IT budget that's not going to grow much faster than revenue," so they can afford to make strategic IT investments, Kamman said.

Cooperation with IBM, Microsoft and other partners will be critical to the strategy, according to Kamman. But expanding its portfolio beyond its traditional networking role is likely to turn some of Cisco's partners into competitors, in the view of Frank Dzubeck, president of consulting company Communications Network Architects, in Washington. For example, IBM is the biggest player today in application acceleration, he said.

Cisco is taking the right approach by adding the new capabilities to its offerings, but at least for now the company should put it into separate appliances instead of switches and routers, said Burton Group analyst David Passmore. Enterprises don't want to swap out their fundamental network gear, and many don't even own their own infrastructure because they outsource the network to service providers, Passmore said.

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