Daily Archives: August 21, 2009

More Cisco Layoffs in September?

Even as confirmation arrives that Cisco slashed 600 to 700 employees from its California payroll in July, rumors are circulating that the network giant might enact further layoffs in September.

Wait a minute. Didn’t John Chambers tell us the worst might be over? Didn’t he say Cisco’s austerity measures were complete?

To wit:

Chambers said the company is finished with a belt-tightening program that has led to layoffs of just above 2,000 employees in the last two quarters, slightly more than the company had advertised. It ended the quarter with 65,545 workers. The company is now fully focused on growth, the CEO said.

Maybe these latest rumors are unfounded. It’s either that or Chambers wasn’t entirely forthcoming.

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Fortinet Scoops Up Assets from Defunct Woven

In what seems an unusual move for a company reportedly on the verge of an IPO, Fortinet announced earlier this week that it has acquired “certain assets and intellectual property of Woven Systems, formerly a provider of Ethernet fabric switching solutions for the high-performance computing market.”

The unified threat management (UTM) vendor says Woven’s high-speed switching and traffic-management technology will be used to enhance the performance of Fortinet’s FortiGate-5000 Series chassis-based boxes.

Said Ken Xie, CEO and co-founder of Fortinet:

“Woven’s ASIC-driven approach to high performance is highly complementary to Fortinet’s own strategy for maximizing performance through customized processors. This acquisition will harness the performance power of our respective technologies to offer tremendous benefits to customers who require the fastest and, often, the most mission-critical network security environments.”

Woven apparently had gone under after failing to find follow-on funding earlier this year. That suggests Fortinet probably paid bargain-basement prices for the technology it’s scooped from Woven, which was known primarily as a vendor of 10-Gibabit Ethernet switches.

Fortinet doesn’t say whether Woven employees were included in the deal, but it does say that it intends to continue selling certain Woven products and to provide support to new and existing customers who purchase support contracts.

ConSentry Latest NAC Vendor to Close Shop

ConSentry Networks, a pioneer in network-access control (NAC) switching, is closing its doors.

Founded in 2003, ConSentry raised lifetime funding of approximately $80.4 million, borrowed in five installments, roughly one per year. Its final funding round, announced in January of this year, was for approximately $9.4 million and came from existing investors.

During the course of its existence, ConSentry was financially backed by some prominent Silicon Valley VCs, including Accel Partners (one of Accel’s partners became ConSentry’s CEO for a brief period) and Sequoia Capital.

Network Access Control, sometimes referred to as Network Admission Control — which fortunately resolves into the same acronym — is a market that has failed to deliver on its hype and promise. For a long time, it was billed as the next major wave in enterprise security.

To date, though, it has fallen well short of becoming a $1-billion market. Gartner reported that the NAC market grew 51 percent in 2008, but was worth just $221 million. That’s not enough to support dozens of players, including many established, brand-name vendors who tend to capture their fair share of NAC from within their broader installed bases of customers.

In that respect, ConSentry is not alone in failing to survive the economic downturn and the natural consolidation of the marketplace. All technology markets consolidate as they mature — with the marketplace eventually selecting winners and losers — and they consolidate faster during economic downturns. Consolidation is heightened further if it occurs in a market segment that isn’t living up to commercial expectations.

A few of ConSentry’s former rivals had closed their doors previously, and others have been acquired by bigger players.

In general, whatever spoils the NAC market has yielded have gone to the leading network-infrastructure players (Cisco, Juniper, HP ProCurve, etc.), who’ve built or bought their own NAC capabilities, and to the vendors who own security real estate on computing end points. Those vendors include Symantec, McAfee, Sophos, and, increasingly, Microsoft.

Each time the market’s music stops, signaling that another vendor must leave the party, fewer chairs are available at the table. Some of those chairs are permanently reserved for
the major players
. Less and less room is available for standalone NAC switch or appliance vendors, even if they’ve attempted to tailor their value proposition toward providing security intelligence to the network infrastructure or endpoints belonging to the big guys.

Some observers still claim the “Year of NAC” will come, but it won’t arrive soon enough for ConSentry and others.