Cisco Systems has stopped development on its Application Control Engine load balancer modules for its high-end switches and routers, and now networking rivals are trying to raid Cisco's installed base. Upstart A10 Networks has struck first with a Cisco ACE trade-in deal.
A10 is offering Cisco ACE shops a credit of $24,000 as well as installation and migration services if they move over to an AX Series application delivery controller (ADC) or to the SoftAX implementation, which runs the AX ADC software inside a virtual machine.
The deal was announced after Cisco confirmed rumours last week that it had halted development of ACE products.
The key thing to remember is what Cisco said at the end of its statement about ACE: "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."
Just because Cisco is stopping development on ACE load balancing modules does not mean that the company is getting out of load balancing entirely. It is easy to see Cisco take its own ACE code, roll it up inside a VMware ESXi virtual machine container, and stick it into its Unified Computing System modular systems.
Of course, it is equally likely that Cisco could partner with market leader F5 Networks and do the same thing, or any of the other suppliers of load balancers and application delivery controllers, for that matter.
The AX 5200 load balancer from A10 Networks
It is hard to imagine that Cisco would partner with F5 Networks, which has the lion's share of the load balancing/ADC market with its BIG-IP appliances. But with $48.7bn in cash and equivalents, Cisco has plenty of options.
One of the more interesting courses of action might be to acquire one of the smaller players and take the fight to F5 Networks. A10 Networks, which is still privately held and has raised $38m in venture capital funding since it was founded in late 2004, is the obvious first choice as a Cisco acquisition target.
F5 Networks has a market capitalization of $8.5bn, and would give Cisco its much-wanted 60 per cent share in this space, but probably at a hefty premium - perhaps as high as $10bn to $11bn. And frankly, if Cisco was going to do such a deal, it should have never let it out of the bag that it was pulling back on the ACE products until after the deal was done because F5 Networks' stock jumped about 10 per cent on the news.
Citrix has a $15.2bn market cap, and would put Cisco into a tough position with partners EMC and VMware, while Riverbed, at a $3.5bn market cap, is a doable deal without denting the Cisco cash pile too much.
Brocade, at a $2.85bn capitalization, is almost as expensive as Riverbed and perhaps not as useful to Cisco. Radware is privately held, and already partners with VMware to make its Alteon VA virtual ADC appliance play nice in vClouds.
Alteon VA also runs on KVM and Xen hypervisors. Radware has a market cap of $761.5m, as El Reg goes to press, and could also be easily snacked upon by Cisco. However, Radware is partners with Juniper Networks to offer software-only ADCs for Juniper MX switches, so this deal might be harder to do.
Whatever Cisco is doing, it had better get on with it fast if it wants to retain a presence in the load balancing and ADC market. ®