Cisco Puts ACE in the Hole (or Maybe Not)

Although Cisco reportedly confirmed that it will discontinue further development of its Application Control Engine (ACE), a Cisco representative now says that it isn’t the case, and that ACE will be developed further.

Regardless of what Cisco eventually does with ACE, we have not seen the last of the company in the application-delivery controller (ADC) market. In fact, the latest indications, as published in articles at SearchNetworking and The Register, suggest that Cisco, like Arnold Schwarzenegger in The Terminator, will be back.

The salient question is whether Cisco’s next foray into the ADC market, regardless of the form it takes, will produce results any different from its previous efforts, which were catalogued by yours truly about two years ago. Indeed, Cisco has been beaten consistently and repeatedly by F5 Networks in load balancing. Cisco’s losing streak goes back more than a decade, and it is likely to continue if the company stumbles back into the market halfheartedly.

While there is no question that F5 has gotten the better of Cisco continually in load balancing, a more interesting question relates to why Cisco has failed. One line of reasoning suggests that Cisco neither understands nor appreciates Layer 4-7 network services, including load balancing and WAN optimization. Cisco, this argument asserts, is a switching and routing company, proficient at layers 2 and 3, but woefully out of its comfort zone higher up the stack.

Bigger Picture

There’s some legitimacy to that argument, but it doesn’t provide a complete picture. More often than not, Cisco’s load-balancing products and technologies were predicated on the fruits of acquisitions rather than on organic innovation. That is true going all the way back to the long-dead LocalDirector, which was based on technology Cisco obtained through the acquisition of Network Translation Inc. in 1996. Subsequent to that, Cisco acquired former F5 competitor ArrowPoint Communications for $5.7 billion in 2000.  The personnel in these load-balancing companies clearly understood network services, even if the old-guard switching and routing stalwarts at Cisco did not.

So, we’re left with two possibilities. Cisco made bad acquisition choices, effectively acquiring the wrong load-balancing companies, or Cisco failed to execute properly in taking the products and technologies of the acquired companies to market. I’m leaning toward the latter scenario.

Cisco’s primary problem in areas such as load balancing and WAN optimization, as it has been expressed to me by former Cisco executives, is that the company strategically understands that it needs to play in these markets, but that it invariably fails to make the commitment necessary to success. Why is that?

A Matter of Focus and Priority

It comes down to market sizes and business priorities. Switching and routing always ruled the roost, and the resources, at Cisco. That’s still true today, perhaps even to a greater extent now that the company is coming under renewed attack in its core markets after failing to break new ground in many of what CEO John Chambers called the company’s market adjacencies. (Flip, anyone?)

Fundamentally, nothing seems to have changed. Cisco might take another run at ADCs, but there’s no reason to suppose that it would end differently this time unless Cisco makes a sustained and uncompromising commitment to the market and the technologies. Nothing less will do.

Cisco can be sure that is ADC competitors, as in the past, will not give it any breaks.

26 responses to “Cisco Puts ACE in the Hole (or Maybe Not)

  1. Brad, you have some factual inaccuracies in your blog. Cisco is not exiting the ACE product line and will continue to support and deliver new features for our existing ACE and GSS customers. No imminent EOS/EOL notices are planned as a result of this announcement.

    Cisco believes the data center is undergoing a fundamental transformation, with virtualization, cloud, and new service delivery models. Cisco is re-evaluating traditional Load Balancing approaches, including its ACE product line, to ensure that it meets customer needs in this transformative environment. Cisco will continue to support our current product portfolio. Cisco is not exiting the market, but as the market is evolving we are looking at new ways to deliver our load balancing technology. We will share additional details as they become available.

    • Steven, I’ve made a slight change in wording to reflect the current reality. It is my understanding that, while the ACE product line has not been EOLed formally, its development has been discontinued.

      I have not made the case that Cisco has abandoned the ADC market or load balancing. I fully expect Cisco to play a role there. I just know the company will have to do more than it has done with LocalDirector, ArrowPoint, and ACE. I think that’s fair comment given the market history.

  2. The first part of your statement is still incorrect. Cisco has NOT discontinued development of the current ACE product line, nor is EOL imminent. What we are doing is changing the plan for the *next generation* product after the current ACE.

    Development of the current ACE line has NOT been discontinued. We are still delivering on the current ACE roadmap and will continue to do so for the foreseeable future. That includes not not just bug fixes but enhancements for current customers as well. What we’ve changed is our future plans, not our current plans.

    We will share what is beyond the current ACE when details become available.

  3. Steven,

    Then I humbly submit that you have a significant communications problem to address, one that ranges further afield than this humble outpost.

    Let me provide you with URLs to articles that invariably report that Cisco is discontinuing development and/or support of the ACE product line:

    http://channelnomics.com/2012/09/24/cisco-doubling-ace-discontinuation/
    http://www.theregister.co.uk/2012/09/18/cisco_ace_no_more/
    http://searchnetworking.techtarget.com/news/2240163682/Farewell-Cisco-ACE-but-perhaps-not-Cisco-load-balancing
    http://www.eweek.com/c/a/Enterprise-Networking/Cisco-Ending-ADC-Business-Ceding-Market-to-F5-Citrix-Riverbed-198757/
    http://www.crn.com/news/networking/240007425/cisco-ceasing-development-of-load-balancer-products.htm

    Some of these publications report that the news had been confirmed by Cisco. I’m just commenting on news that was reported (and reportedly verified) elsewhere, in multiple publications. None of these sources can be described as tabloid tattlers.

    As I said, Steven, you have a significant communications problem to address.

  4. Yup I understand that there has been a lot of confusion and difficulty regarding ACE in the press and a lot of generally unnamed Cisco sources. That’s our fault, we were not proactive enough about this.

    However, I am telling you, as a representative of Cisco’s Analyst Relations team responsible for ACE, that we have NOT discontinued the current generation of ACE.

    If you’d like I can set up a call for you so you can hear it from me and the product managers responsible for the product at Cisco. We can’t tell you more than what I’ve revealed here, but we can confirm for you, officially, that ACE has NOT been discontinued. Feel free to email me if you’d like to have that call.

  5. Steven,

    I’d be very interested in getting the full story. Feel free to contact me to arrange that briefing.

  6. I’d like to join that briefing – I take the position that Cisco is repositioning the ACE in my blog post. Getting confirmation would be useful.

  7. Pingback: Cisco ACE is not EOL or dead. — EtherealMind

  8. Regardless of Cisco’s eventual decision, this ‘rumor’ is pretty widespread and I have personally dealt with customers who are very nervous about moving forward in replacing older CSSes with ACEs. I would think quashing/confirming these rumors would warrant a very public announcement from Cisco. If Steven knows of one, please link it.

  9. It’s the same problem Cisco is having with ACS vs. ISE. Many organizations (mine included) are confused and annoyed regarding the direction regarding these products. We were planning a rollout to ACS, but then ISE 2.x is supposed to include TACACS support and it has become the authentication “Golden Child.” We’ve been told that ACS isn’t going EOL, but I’m feeling dubious. Why would Cisco maintain two product lines that overlap so obviously?

  10. Great post, thanks a lot. Really glad you got a Cisco rep’s attention and had a brief conversation here in the comments. I’m happy with the ACE as I OWN it by being amoung the first adopters who went through the gambit of 15 or 20 bug TAC cases. I’d hate to give it up now that it is a part of me hahaha.

  11. Brilliant timely piece. As you indicated the TAM of these markets seems to have misled Cisco’s strategic vision and efforts. Layer 2-3 TAM is $25b+ vs Layer 4-7 TAM of 2.5b$. But Layer 4-7 has a 15% CAGR vs 2-3% for Layer 2-3, with much of the innovation also in Layers 4-7. Add the coming SDN wave and what that does to Layer 2-3 vs 4-7. Cisco has to play in Layers 4-7. This is typically when Cisco is forced into an acquisition.

  12. RocyMountain Jack

    I believe the failures are more due field focus than product strategy or capabilities. There are two aspects to that.
    1) If ADC provides more effective use of WAN resources, that pushes the next capacity upgrade for the WAN Routers out into the future (probably the next commission year at least), and a sales team will see a bigger sale & commission from a WAN upgrade than a ADC sale. Guess where they will focus.
    2) ADC is more complicated than selling Switches & Routers (at least to a S&R sales force) and it is easier to sell a Catalyst -> Nexus (or VoIP, or UCS…) upgrade than compete against the experts at F5. Guess where they will focus.

    Juniper faced a similar decision and got out of the DX business several years back. The product was not terrible – but revenues could not justify the extra investment to keep pace with F5.

    I think F5 has a lot more to worry about from SDN companies like Embrane and LineRate than Cisco.

  13. Pingback: Requiem for the ACE « The Data Center Overlords

  14. Cisco has realized (and the rest of the ADC players) that a physical Load Balancer does not fit in a virtual (ESX) data center. They have good technology (for 1999-2005) which is not a good fit for today and future. Great move on Cisco’s end to realize that and work on an alternate approach – like a virtual LB. I just dont understand how people still buy F5. Riverbed Stingray and Netscaler make virtual LB-s that are a good fit with tons of functionality.

  15. I think we have a case of “if you can’t join ‘em, buy ‘em.” My guess is Cisco is going to acquire Citrix. Think about it for a second. VMWare with the Nicira acquisition has positioned themselves as the virtual hosting and virtual network all-in-one. They will have ADC appliances and just run them in an image (or hypervisor if they really wanted to). Throw in all the VXLan stuff and bam you have a complete turnkey overlay virtual and physical network system from one company. Cisco can’t do that — yet.

    If they buy Citrix, they get a virtualization platform (Xen), Virtual ADC (CloudPlatform, etc.), Good physical ADC (Netscaler) with a ton of IP talent. They burn in some of the “gateway” items in their routing/switching platforms, and you now have a single turnkey again… but from Cisco.

    VMWare really thumbed their noses at the “partnership” they have with Cisco through the purchase of Nicira. I think Citrix is the only answer unless Cisco has some massive internal development going on we haven’t heard about. A collection of startup acquisitions isn’t going to cut it this time.

    • J – while your logic for Cisco making an acquisition seems right, Citrix is far too big for Cisco to swallow. After premium would be a $16-17B deal, all “US” cash, not off shore – would be Cisco’s biggest acquisition ever. Very unlikely.

  16. Maybe Cisco would just look at getting the NetScaler business from Citrix, and not the whole ball of wax.

  17. Pingback: The Data Center Journal SDN and ADC: Riverbed Networking Plans

  18. Pingback: Cisco ACE–Oh what a calamity | Nigel’s Networking Nuggets

  19. Pingback: As The Datacenter Turns… « The Data Center Overlords

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