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As part of the Access Router Group, we manage the 800, the 1800 and 2800 families of integrated services routers (ISRs), and we work with the rest of the Access Router Group team to create Cisco's overall access router portfolio. For those who aren't familiar with the ISR concept, can you explain what an integrated services router is and how it might be different from what a 1700, 2600 or 3600 device can do?
The new ISRs [800 and 1800 lines] are intended for customers in the enterprise branch office, commercial and SMB apps, and managed services from service providers. The value proposition that the ISRs have is that they're focused on providing connectivity and concurrent services at wire-speed. And those services include many difference security services and IP communications, while simultaneously allowing the customer to fill the full bandwidth of a pipe. Is there really a significant advantage there?
Our view -- and what our customers are certainly saying with their pocketbooks -- is that in these branch offices, customers have the same network requirements as they have in their large campuses. Customers want full enterprise-class security, seamless IP communications and access to all the apps that they would have at headquarters. So with the ISRs, you're enabling true enterprise extension, and that makes a big difference to customers. One aspect users may not understand is how VoIP plays into the ISR. Can you explain what exactly the ISR does as part of an enterprise IP telephony system?
We have a couple different ways in which VoIP is supported in the ISRs that give a customer a lot of flexibility in a VoIP deployment. First, we have advanced [quality of service] features. We support the IP communications enterprise extension -- this is for your smaller sites with no connections to voice networks -- so you have a central Call Manager with seamless IP communications.
Of course, a customer may want voice gateway capability as well, which allows you to have local connections to the PSTN, and in that case they have two choices. They can have a central core manager and run SRST, which is Survivable Remote Site Telephony, so if there's a problem with the WAN pipe to the headquarters, they have the backup to directly dial up to the PSTN. Or they have the core controlled locally, with CallManager Express. If they want voice gateway capabilities, they can use either the 2800 or 3800, or if they just want voice extension, they can use any of the ISRs, so we give them a lot of flexibility in their deployments. Does it allow smaller offices and organizations to forego the purchase of additional VoIP appliances?
That's correct. In a branch office, some customers want a gateway with SRST. It's only in the smallest sites that they run central core manager with no connection to the PSTN, but there are a lot of choices for customers to tailor their deployments to specific sites. You mentioned that the ISR family is already one of Cisco's most successful product lines ever. Can you tell me a little bit about the types of customers buying it?
Specifically, in about two quarters, the ISR family ramped to a billion dollar run rate -- meaning we've booked $250 million or more in sales per quarter -- and shipped 100,000 units. But those sales have been across the board -- enterprise branch offices, commercial customers, midmarket firms and SMBs. Some might argue that with an ISR, a company is putting all its eggs in one basket by relying on one device for routing and security. How would you respond to that?
We have very good customer experience with doing that. Increasingly, customers are focusing on the easy of deployment, and then rely on the product to be reliable and remain up, and we have strong customer feedback that the ISR is meeting their needs. They're able to deploy advanced security features, plus they have the manageability and the reliability they need. In what kinds of businesses have you personally seen the benefits of the ISR?
The ISRs are used in many large branch banking deployments, and that's a case where security is a big deal. Depending on the specific application, customers deploy more or fewer of the security features, but they want to really lock down the router. On the other end, we have commercial SMB customers who, for instance, want to deploy a new site very rapidly with full security and wireless features, and they're able to do so conveniently and effectively, so it spans the spectrum.
What you will see is more central management capabilities coming in for wireless. You'll also see more video capability. There are a couple other things on our road map as well, like more content networking and bandwidth management. There and other areas where our customers, as their applications get more sophisticated and demanding, are making increasing requests of us. Many have speculated that overseas vendors are going to have a major impact on the U.S. enterprise networking market -- specifically the routing market -- in the next couple of years. Do you believe that?
We're focused on innovation, raising the bar on not just meeting customer needs, but also anticipating customer needs. So we're confident that we have a strong offering for our customers. As [Cisco CEO] John Chambers says, we welcome worthy competition. Is a major objective of the ISR strategy intended to combat that potential threat?
When we started designing these products, our focus then -- as it will be in the future -- is on anticipating customer needs. Obviously, competition is a factor. One isn't going to ignore it, that could be unwise, but our primary focus is on thinking ahead to what's going to be needed in the market. John Chambers has said that a major part of Cisco's product strategy going forward will involve blended products with capabilities that extend through Layers 1- 7 in the networking stack, but traditionally that hasn't been one of Cisco's strengths. What initiatives are under way in your organization to work toward that goal?
You see that show up in various aspects of our products and features like application firewalls. We're looking high up in the application layer at things we can do there and that's just one example. We're trying to be more application aware, so it's that type, of course, you'll see us take in all Cisco infrastructure elements and certainly in ours as well. Finally, what's the biggest challenge for your organization going forward?
I would say that our focus -- and its both a pleasure and a challenge -- is to continue to anticipate customer needs, and to make sure we're meeting them proactively. Looking ahead of where customers are today to where they want to go is a constant challenge. We do stay very close to our customers, and as they tell us what their challenges are, it helps us understand where to take the product to best meet their needs.
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