Load Balancer

Cisco is apparently stopping development of ACE (Application Control Engine) load balancing products, but it says it is not exiting the market altogether.

There were indications that such a move by Cisco was likely, according to Network World. It lost over half its share of the market in the past four years, the report said. F5 and Citrix continue to be strong rivals. And ACE was simply not a growing product line for Cisco, Network World (News - Alert) said.

In Q2, Cisco saw an 11.2 percent share of the $389.6 million ADC market, according to Dell'Oro Group. That is a reduction from 14 percent in Q1, Network World said. On the other hand, F5 has a 48 percent share of the market, and Citrix has a 20 percent market share.

In addition, Dell'Oro projects the market will total $1.6 billion in 2012, with the quickest growing portion of the ADC market to be in virtual appliances, Dell'Oro said.

Cisco’s announcement will help its rivals.

"Given Cisco's announcement, F5 has received many inbound inquiries from Cisco ACE customers asking about incentives or promotions to swap out their ACE products for F5's application delivery solutions," John Oh, F5 vice president of marketing, told Network World. "Our partner ecosystem is very well-versed on replacing ACE with F5's market leading ADC, BIG-IP."

Brocade is seen as another competitor. "Brocade is in the process of launching a compelling worldwide program for current ACE customers and Brocade's partner/channel organizations,” Keith Stewart, senior director of product management with Brocade, said in a statement. "Brocade will offer a high availability ADX bundle program with full service and support to trade-in existing Cisco ACE or (content switching) products.  Customers can take advantage of Brocade's Network Subscription, which provides a profitable option to acquire ADC equipment via a monthly subscription, aligning costs with their revenue."

In addition, Citrix has a product trade-in program with a 10 percent reduction on a Citrix NetScaler ADC platform, plus consulting services on a per user basis.

Also, Riverbed will offer financial incentives so customers reduce operating costs. Radware (News - Alert) said it has trade-in programs. Incentives are both financial and complimentary professional services.  In addition, Radware has an incentive for Cisco customers to replace technology via a trade-in to switch to the Alteon ADC.  

In a recent statement to Network World, Cisco said it “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."

In another statement e-mailed to CRN, Cisco said, "Cisco routinely reviews its business to determine where it needs to align investment based on growth opportunities. In assessing the data center market, which is undergoing a fundamental transformation within virtualization, cloud, and new service delivery models, Cisco has decided it will not develop further generations of its ACE load-balancing products."

CRN reported that JMP Securities (News - Alert) analyst Erik Suppiger said Cisco was telling salespeople to stop selling ACE.

"We recently learned that Cisco is advising its sales people to refrain from selling the company's application delivery controller product, the ACE 30 module, for new deployments. We understand this reflects the company's reduced development efforts for the product, which will result in limited feature advancements," he said.  

Suppiger claims Cisco has moved some ACE development employees to other positions in data centers.

In addition, The Register speculated that, “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,” The Register said.

“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.”

In other recent news, Cisco said its profit for the most recent quarter (which ended on July 28 and represents the fourth quarter) was 47 cents per share, TMCnet reported. The predicted average for profit was 46 cents a share, according to Bloomberg (News - Alert) News.

Revenue increased 4.4 percent to $11.7 billion, while analysts on average predicted revenue of $11.6 billion for the quarter, Bloomberg added.

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