analyst, The Yankee Group

With a multi-product launch last month, Cisco attempted to address two growing areas of concern for network architects: managing the expected explosion of XML and RFID traffic.

Cisco launched a blade for the Catalyst 6500 switch that will parse XML messages quickly, verify XML signatures and ensure the integrity of Web service traffic flows without bogging down the network. A branch-office appliance with similar technology is also on tap.

The company also tackled RFID traffic with new hardware and software that manages and coordinates RFID data and the scanning devices that collect the data at the network edge.This is the answer to the question that [Cisco] has been struggling to answer for customers — why the network matters.Zeus Kerravala>Text The new gear was launched at Cisco’s customer event, Networkers 2005, in Las Vegas. Cisco’s push into XML-technology is led by its newly formed Application Oriented Networking (AON) group, which some analysts say could be the next US$1 billion advanced technology for Cisco.

“AON is one of Cisco’s most significant announcements in a while,” says Zeus Kerravala, an analyst with The Yankee Group. “This is the answer to the question that [Cisco] has been struggling to answer for customers — why the network matters.” The XML-aware gear will take load balancing a step beyond Layer 4-7 application switching, Kerravala says.

“A normal load balancer can look at a packet and understand it’s a SAP packet and send it to a certain server, and that’s it.

This technology, for example, could look further inside” to see the packet as part of a product order — with such detail as what customer the order is from, the size of the order and any other data that can be included in an XML-based message, he says.

In addition to routing XML messages, the technology also verifies XML data integrity and translates between different applications that speak different XML schema.

The AON technology also integrates pieces of middleware code into the hardware. At SAP’s Sapphire Conference in May, an AON appliance was demonstrated running portions of SAP’s NetWeaver middleware software. Cisco announced more than a dozen additional XML and middleware application partners at Networkers.

“For the first time, Cisco can actually be correct to say that SAP” — or any other applications from AON partners — “runs better on their network equipment,” Kerravala says. Sources familiar with the product launch say the Catalyst 6500 AON blade will include technology from Tarari, a maker of chips that accelerate and secure XML message traffic. The technology is used in XML acceleration gear from start-up Reactivity.

Cisco’s dive into the XML and application acceleration market was much anticipated, since Cisco executives talked up the technology at its December 2004 analyst conference.

But Cisco joins a crowded field of former start-ups that now have established products and long lists of customers running XML acceleration gear, such as DataPower, Reactivity and Sarvega.

“Obviously, Cisco is a big company, and that can be an issue for us to compete against them,” says Eugene Kuznetsov, CTO and founder of DataPower, which makes appliances and chips that accelerate and secure XML Web services traffic.

“But this technology is a huge departure for Cisco.”

Kuznetsov says DataPower gear runs along side routing and switching gear from Cisco in the data centres of such firms as J.P Morgan Chase and Wachovia. “Getting the attention of large customers won’t be hard,” for Cisco as it sells its XML gear, Kuznetsov, adds.

“DataPower has been running for two or three years in some of these types of accounts,” he says. “But customers will see that [Cisco] is new to this.”

One analyst agrees that start-ups have an edge for now in the XML market. “What’s going to happen in the short term is that Cisco’s entrance into the market will actually be good for competitors,” says Ron Schmelzer, senior analyst with research firm ZapThink.

“Cisco’s entrance into XML switching will generate buzz for the market in general, bring attention to XML start-ups who will compete against Cisco, but already have established products and customers.”

But in the case of DataPower, the firm is not taking chances. To counter Cisco’s XML push, DataPower and Nortel will team in August with a joint product offering that combines DataPower’s XML acceleration and security gear with Nortel’s Alteon Layer 4-7 switching and application acceleration technology. Plans are also in the works to integrate DataPower technology into switching gear from Nortel.

While Cisco launched its AON initiative with the backing of middleware software vendors, such as IBM and SAP, Cisco could ultimately battle with such vendors and cause confusion for companies, says one analyst.

“You now have a fundamental issue between the domain of IT and the network,” says Frank Dzubeck, president of Communications Network Architects. “XML is an application layer issue. Controlling the performance of the application has always been a function of the systems and servers people” in a large company, “not a function of the network.”

He points out that much of what Cisco is proposing for the Catalyst 6500, IBM can do now on its BladeCenter blade server chassis, with blades running IBM WebSphere software. Additionally, the IBM BladeCenter uses XML acceleration silicon from Tarari, the same provider behind Cisco’s gear.

In addition to the XML-focused Catalyst 6500 blade, appliances for the LAN edge that combine XML processing with WLAN and RFID management capabilities were also introduced as part of Cisco’s AON launch.

On the RFID front, another Cisco edge appliance being launched is targeted at detecting RFID tag reading equipment that is 802.11-compatible.

This product package will include hardware for aggregating and managing traffic generated by wireless LAN-enabled RFID tag readers, and software for managing large-scale deployments of RFID readers across a WLAN-based network.

Cisco’s RFID and middleware push also reflects IBM’s own XML and RFID middleware ambitions, following the recently announced WebSphere RFID infrastructure software platform. IBM has said the size for the market for RFID middleware could grow to around US$20 billion by 2007.

“It will be kind of interesting” how the relationship between Cisco and its AON software partners evolves, ZapThink’s Schmelzer says.

“Do you think Cisco would bring SAP or [WebSphere] into a deal if those were not already the incumbent software platforms?”

“This is part of a bigger trend towards making networks more intelligent,” says David Passmore, research director for Burton Group. The idea behind this is to raise the importance of network gear to enterprise technology buyers, as equipment such as LAN switches and WAN routers become more commoditized.

Research firm Instat/MDR predicts the LAN switch market will grow only around 10 per cent over the next five years, while it expects revenue of enterprise routers to decrease over the same time.

With these two product categories comprising 80 per cent of Cisco’s sales — and Cisco CEO John Chambers’ prediction for around 15 per cent growth over the next five years — the company “has to figure out what the next new things is that will generate more revenue for them,” Passmore says.

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