Cisco Systems is launching a new business unit dedicated to providing hardware-based middleware capabilities traditionally supplied by software, the company announced Tuesday at its annual Networkers Conference in Las Vegas.
The new unit, to be called AON (Application-Oriented Networking), will take the company into an area called intelligent messaging middleware. AON will create products that can route messages securely according to policies set by a network administrator.
The appliance products will include a module that will fit into Cisco data center switches, a router for branch offices, and an appliance aimed at connecting with applications from enterprise resource planning software vendor SAP, as well as with IBM’s web server software WebSphere.
“We’re talking about dial tone for applications,” said Cisco CEO John Chambers during his keynote address. ”A large part of the applications and services should be embedded within the network.”
“The network speaks the language of applications,” he added. “Instead of speaking about packets, it speaks about messages.”
Cisco shares rose $0.15 to $19.75 in recent trading.
Collateral Damage?
Cisco may alienate some software partners who have been providing similar services as add-on technology for the company’s equipment.
“They’re looking for new markets,” said Shawn Willett, principal analyst for application infrastructure at Current Analysis, a research firm in Sterling, Virginia. “They’re trying to get into software, specifically middleware, so of course it is a threat.”
Mr. Willett points out that the messaging and monitoring capabilities Cisco will be building into its hardware will compete with products that IBM, Tibco Software, and Microsoft already offer in their middleware integration suites.
On the other hand, Cisco is announcing that its AON unit will be partnering with IBM and Tibco, in addition to SAP, EDS, SAIC, VeriSign, Actional, ConnecTerra, Contivo, CXO Systems, Infogain, ManTech, Trace Financial, and TransactTools.
Taf Anthias, vice president and general of the new AON business unit, also explained that Cisco wouldn’t force customers to abandon their existing applications. Nevertheless, Cisco will be facing competition.
“It’s a pretty mature market that Cisco wants to get into,” added Mr. Willett. “Their aim is to tie these lower-end processes into the hardware to provide better quality of service and discretely tie a process to certain hardware to make sure things get priority. They do have a value proposition and there is a niche that is going to be attracted to that.”
He believes that financial services firms, for example, will be able to take advantage of the AON unit’s products to process stock trades and financial information more quickly. However, there is a pitfall for customers because the new appliances link them even more closely into Cisco-specific products.
“When you tie into hardware, it gets proprietary,” said Mr. Willett. “That will be the tradeoff.”
