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Cisco Sees Billion-Dollar Potential in Application Networking

Cisco Systems Tuesday raised the stakes in application-aware networking by naming it as its next potential billion-dollar business.

Executives at Cisco Worldwide Analyst Conference 2005 in Santa Clara, Calif., Tuesday named Application Networking Services as the company&'s ninth advanced technology (AT), a designation the vendor uses for product groups it expects to grow into billion-dollar annual businesses and maintain a No. 1 or No. 2 market share in over the next five to seven years.

The new AT includes Cisco&'s lineup of WAN optimization and application acceleration products as well as the Application-Oriented Networking portfolio of switch modules and appliances launched earlier this year that read the messages flowing between applications across the network, essentially translating between applications and enabling better collaboration between them.

The creation of the AT, Cisco&'s third in the last three weeks, follows its November launch of a new application delivery business unit along with several new optimization and acceleration products and is the latest step in Cisco&'s ongoing strategy to build more intelligence into network infrastructure.

“[We&'re taking] a lot of the functions that used to exist in the applications or exist in middleware or the operating system and moving them into the network,” said John Chambers, president and CEO of San Jose, Calif.-based Cisco, during a keynote address. “In essence, [the network] has become the platform that will deliver the applications and services to the users,” he said.

Cisco last month launched Hosted Small Business Systems, an AT around its new Linksys One hosted VoIP offering, as well as a digital video AT based on its pending acquisition of set-top box vendor Scientific-Atlanta.

The addition of these new technology focus areas will contribute to the growing size of Cisco&'s overall addressable market, which is estimated to hit $133 billion by 2009, up from $83 billion this year, said Charlie Giancarlo, Cisco&'s senior vice president and chief development officer.

Giancarlo also highlighted Cisco&'s architectural approach to rolling out its Intelligent Information Network (IIN) strategy across its customer segments.

The new Application Networking Services AT is part of its new Service-Oriented Network Architecture (SONA) for enterprises, which Cisco has been using with customers since August, Giancarlo said. The three-layer architecture includes an application layer, interactive services layer and networked infrastructure layer that ties servers, storage and clients together via the network.

SONA is one of four architectures Cisco has devised to deliver IIN across its customer base. It&'s Small Business Communications architecture targets the commercial market, while its Connected Home architecture focuses on consumers. Its IP Next-Generation Networks architecture targets service providers.

Executives at the conference also reiterated Cisco&'s expectations for a 10 percent to 15 percent annual growth rate for the next three to five years.

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