Over The Lump

Cisco Chairman and CEO John Chambers said last month that the company has seen a slowdown in the U.S. enterprise market.

"The U.S. enterprise, probably as a surprise to no one, is experiencing some softness ... We expect and continue to expect U.S. enterprise growth to be very lumpy both by U.S. areas and industries moving forward," Chambers said during a conference call to discuss the San Jose, Calif.-based vendor's first quarter fiscal 2008 financial results.

Just ahead of the release of its financial results, Cisco unveiled new technology that will add virtualization, increased capacity and improved performance to its mainstay modular switch platforms.

The vendor is bringing virtualization to enterprise networks with a new module for its flagship Catalyst 6500 switch line. It is also rolling out a series extension that represents the next generation of its Catalyst 4500 platform. Together, the products mark the next phase of Cisco's Campus Communications Fabric framework for enterprise networks and are driven by customers' use of new technologies such as collaboration and Web 2.0, said Tere Bracco, senior manager of Cisco's switch portfolio.

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The product line enhancements were designed to enable customers to build on their existing Cisco investments, she said, noting that the vendor has sold over one million chassis between the Catalyst 6500 and 4500 switch families. "Rip and replace is not an option when you have an installed base of one million switches," Bracco said.

The new Catalyst 6500 Series Virtual Switching System (VSS) 1440 adds virtualization to the portfolio that enables solution providers to combine multiple physical switches to act as one virtual switch, providing increased capacity and redundancy.

The functionality is enabled by the new Catalyst 6500 Series Virtual Switching Supervisor Engine 720 with 10-Gigabit Ethernet, which enables VSS 1440 to scale to support bandwidth capacity of up to 1.44 Tbits per second.

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The virtualization capability means that solution providers no longer have to rely on link management technology such as Spanning Tree Protocol, which requires some switch capacity to be set aside to pair passive links with active links for redundancy, said Walt Blomquist, senior director of marketing for the Catalyst 6500 line. "Customers can take advantage of active/active links and have the flexibility to double the performance of those links," Blomquist added.

It also means partners and customers will be able to simplify the operation of their Cisco networks as multiple switches share a single point of management, a single routing instance and a single IP address, he said.

The technology will help solution providers capitalize on the virtualization trend, bringing high-end redundancy features previously reserved for service providers down to the enterprise, said Mike Chase, director of advanced technology solutions at SIGMAnet, a Cisco Gold partner in Ontario, Calif.

"Virtualization is extremely popular. We're seeing virtualization of storage, servers, pretty much every resource in the data center, so the fact that Cisco is driving it into switches makes them a pioneer," Chase said. Virtualization of switches will help support virtualization of all of the other data center resources that connect to the network, he noted.

Pricing for the new supervisor engine, available now, starts at $31,500 with a base software image and $38,000 with an IP services software image. In addition to the upgrade to the Catalyst 6500 line, Cisco is also launching enhancements to its Catalyst 4500.

The new Catalyst 4500 E-Series with CenterFlex delivers capacity of 320 Gbps, representing more than two-and-a-half times the performance and a four-fold increase in per-slot bandwidth over previous versions. CenterFlex is the name Cisco has given to technology improvements powered by its new Supervisor 6-E custom ASICs.

The platform includes the new Supervisor 6-E with CenterFlex Technology, three new E-series 10-Gigabit and Gigabit with Power over Ethernet line cards and four new E-series chassis.

Cisco provides forward and backward compatibility between its Catalyst 4500 gear, meaning that upgrading to the new Supervisor 6-E adds CenterFlex features, such as in-hardware IPv6 support, to previously deployed line-card ports.

Scheduled for availability later this month, the new Supervisor 6-E is priced at $19,995. The new line cards range from $9,495 to $24,995. The new chassis are available in 3-, 6-, 7- and 10-slot versions ranging from $995 to $12,495.

By The Numbers
For the quarter, ended Oct. 27, Cisco reported earnings of $2.21 billion, or 35 cents per share, up more than 25 percent from $1.61 billion, or 26 cents per share, for the same quarter a year ago.

Revenue for the quarter climbed nearly 17 percent to $9.55 billion, up from $8.18 billion in the year-ago quarter.

Excluding charges, Cisco earned 40 cents per share, beating Wall Street expectations by four cents. Analysts expected the company to report earnings of 36 cents per share on revenue of $9.53 billion, according to Thomson Financial/First Call.

Chambers offered revenue growth guidance for the second quarter of 16 percent year-over-year and 13 percent to 16 percent year-over-year for fiscal 2008. Virtual