June 16, 2004, 9:55 AM — Cisco Systems Inc. is shaking up its content networking organization. The company on Monday disbanded its Content Networking Business Unit and is moving people and technology from that group into its Multiservice Customer Edge Business Unit (MCEBU), according to company sources.
The move may eventually bring more advanced features, such as content caching and load balancing, to the company's switches and routers and underscores lagging fortunes for a long list of technologies Cisco purchased during the Internet boom, according to industry experts.
In a meeting Monday, employees in the Content Networking Business Unit were told that content networking products, including the company's line of Content Services Switches and Content Engines, will now be managed by the MCEBU, which develops so-called "converged networking" products. These products include voice and data applications that can be deployed on standard Cisco hardware platforms such as the Cisco 2600 and 3600 Series multiservice routers, according sources within Cisco.
Employees were told that there will not be any immediate change to product road maps or customer commitments, nor will there be any layoffs in the group, though a number of CNBU managers will leave because of "overlap" between the two groups, sources said.
Although detailed plans for merging the two groups were not provided, CNBU employees were told that there was a need for development expertise in areas such as Linux programming and content management in the MCEBU, which is looking to build more sophisticated features for handling Layer 5 and Layer 6 level transactions into its core routing hardware. Among other things, MCEBU executives mentioned offering high-level features, such Web content acceleration and filtering, using plug-in "blades," as opposed to custom hardware platforms, the source said.
On Tuesday, Cisco confirmed in a statement that it had merged the Content Networking unit with the MCEBU.
"As part of normal operations, Cisco evaluates its business on an ongoing basis to focus resources on growth opportunities, customer satisfaction and productivity gains," the statement said, in part. "Cisco continues to promote integration of key services such as security, content networking and voice for small/medium business and branch offices routers. We believe that by merging the content networking business unit team with the access routing group, we will achieve greater development synergy, while remaining focused on service and application integration into our routing platforms."
An industry analyst said he was not surprised by Cisco's decision to reshuffle its content networking business.
"It's been clear that Cisco's direction is to integrate into the platform instead of building custom boxes. They still say that they'll build whatever the customer wants, but their corporate strategy is very clearly to put services like security, application acceleration, content networking on a common platform," said Mark Fabbi, vice president of enterprise communications at Gartner Inc.
The San Jose, California, company has been sharpening its focus on the edge of service provider networks and on integrating more intelligence into switches and routers through hardware modules, analysts said. Functions that once were carried out by standalone appliances, such as caching, are being consolidated into Cisco's mainstay products, said Frank Dzubeck, president of Communications Network Architects Inc., in Washington, D.C.
"The trend here is to take functions that were standalone at one time ... and integrate those into the existing architecture," Dzubeck said. That makes it simpler and more cost-effective for carriers to deliver added services, while helping Cisco play to its strength in routers and switches, he added.
Though flashy uses such as consumer video have drawn the most attention, the technologies involved in content delivery have played a bigger role in enterprise application performance, Dzubeck said. Now small and medium-sized businesses in addition to large enterprises are seeking those benefits and service providers are looking to deliver them, he added.
But after spending billions in the late 1990s and 2000 to acquire companies such as Arrowpoint Technologies Inc., Cisco has been slower than other companies to capitalize on new applications for its content networking technology following the dot-com bust, Fabbi said.
"They haven't focused on the enterprise need for application delivery. They've done a good job focusing on emerging markets, but they forgot to layer new, innovative features on their existing products," he said.
