Cisco's Next Rev In SwitchesCisco's Next Rev In Switches

Cisco Systems is counting on success in security, storage, converged voice and data, and wireless for much of its future revenue growth and will integrate those technologies into its dominant routing and switching platforms.

As customers add intelligent functions such as security and advanced traffic handling to their networking infrastructures, Cisco wants to ensure that it can provide those functions in its switches and routers. "Our challenge and our opportunity is to continue to enable customers to use their networking infrastructures as an increasingly useful asset," says Eugene Lee, Cisco's VP of marketing. As Cisco adds more security, storage, and voice features to its top-selling switches and routers, Lee says, "it's yet another turn of the crank on a whole new generation of technology."

Cisco this week will introduce a smaller and more-affordable switch in its best-selling Catalyst 6500 line of Ethernet switches, the 6503. The lower-cost vehicle is for customers that want the enhanced services modules available with larger Catalyst 6500s.

Cisco, the largest vendor of fixed Ethernet switches, has seen revenue for that line increase by 10% a quarter, according to market tracker Dell'Oro Group. Behind Cisco in the $4 billion-a-year fixed Ethernet switch market are 3Com and Nortel Networks, Dell'Oro says.

"Cisco is applications-enabling the infrastructure at the core of the network and working its way out as far as it can, and that's a significant change from the way most customers have built networks," says Joel Conover, principal analyst at Current Analysis Inc. After launching its applications modules for the Catalyst 6500 line, "Cisco didn't have a way to capitalize on the full potential of the modules without a smaller 6500 chassis," he says.

The challenge for Cisco is convincing customers that they need the high performance provided by its integration of functions such as security into high-end LAN switches used almost always in data centers, Conover says. "The initial obstacle to widespread deployment of this approach at this point is that these things cost $40,000 a pop, when customers can get a firewall for about a third of that."