Wednesday, June 22, 2005

Cisco networks to work closer with applications

LAS VEGAS (Reuters) - Cisco Systems Inc. (Nasdaq:CSCO - news) on Tuesday launched technology to make computer networks smarter, faster and more secure by making the equipment that directs data link better with the software applications that use it.
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Called Application Oriented Networking, or AON, the new technology lets networks speak the language of software applications that run on top of them.

"What Cisco is proposing to do is (integrate) functions that today are performed by various middleware (software) products and put those functions directly into the network," said John Rymer, an analyst at Forrester Research.

San Jose, California-based Cisco said International Business Machines Corp. (NYSE:IBM - news), the No. 1 computer maker, and SAP AG (SAPG.DE), the world's biggest enterprise resource planning software maker, would integrate products with AON.

"Applications speak lots of different languages," said Taf Anthias, head of Cisco's application-oriented networking group, in a telephone interview. "If we can really understand the traffic on the network, we can be that much more valuable to businesses."

In recent decades, companies have amassed all sorts of data, from customer lists to financial records and myriad other types of information, and to support all that data, software programs have proliferated that don't necessarily speak the same language.

AON aims to solve that problem by being able to read entire messages as they pass across a network and take action where necessary.

For example, the network could increase security by determining whether a particular purchase order is indeed a valid order from a true customer.

Research firm Gartner estimates the overall advanced application market -- which includes messaging, integration, application acceleration, Web services, security and other fields -- could be worth as much as $7 billion in four years time.

"It's a little bit early to say but our hope is that this is a billion dollar market" in annual revenue, Charlie Giancarlo, Cisco's chief technology officer, told Reuters. "But can we see our way clear to several hundred million dollars in a few years? Yes, we can."

Cisco has identified a number of what it calls "advanced technologies" that it expects will generate $1 billion or more in annual revenue, but Giancarlo said Cisco isn't adding AON to the list just yet. Advanced technologies that have already reached the $1 billion mark are network security and Internet telephony.

Cisco said its slice of that market -- messaging and integration -- will be 10 percent with new products introduced later in 2005, climbing to 20 percent and more as it introduces more products and as AON evolves and is adopted by the industry.

"There is a growing need for this from a technology point of view," said Sandra Rogers, an analyst at market research firm IDC, noting, however, that these so-called service-oriented architectures will take years to develop fully.

The actual AON products are thin devices, known as blades, that stack like books in a shelf, and will be available later in the year, Cisco said. It did not disclose pricing for the devices.

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