Cisco wants to bring wireless networks everywhere. Cisco's wireless business historically has been focused on a few vertical markets, principally education, health care, manufacturing, distribution and retail. Over the last year we've seen the emergence of a much-broader WLAN market. There's starting to be an enormous penetration of Wi-Fi devices in the enterprise -- laptops, PDAs, phones -- and all those devices need infrastructure. The acquisition of Airespace was a reflection of this market transition. How are Airespace's product lines being integrated into Cisco's product portfolio?
The controller appliance-based 4136 is now Cisco branded, and we shipped that a week from the acquisition's close. However, the Airespace products we didn't bring over to Cisco were the ones with switch ports on them -- the 4112 and 4124 -- because they were mostly used in appliance mode. To fill the gap, there are now 12, 24 and 36 access point versions of those products. As far as the APs, the Airespace 1200 is now the Cisco 1000, and that's the lightweight AP.
The access points need to be converted, and that's a firmware update. The customer needs a controller and then will need to deploy WCS if that next level of network management is needed. With the conversion process, we're working to develop a seamless of converting from one architecture to the other. Existing customers that have a lot of our [Aironet] 1200 [series access points], for example, will be able to install a controller and the management platform and proceed with a conversion utility that will allow them to convert. They don't have to do that, though. They can continue to run their networks as they have. What would be your argument for conversion?
Ease of use and deployment. We're not necessarily pushing our customers to convert, but some of our customers have already indicated this is their preference because they want to make their network easier to manage. There will be some features only available on the LWAPP product, such as the location services that we just announced.
Being able to push down [command line interface] commands from some centralized server isn't exactly LWAPP. LWAPP encapsulates packets and sends them through layer 2 and 3 boundaries into the centralized controller where radio frequency data and client data is stripped from the data packet and, if it's a controller packet, the controller takes on some of the functions the AP would have had. It is a richer capability that makes the experience easier to operate, and it offers security as well as mobility benefits that you wouldn't have pushing CLI commands. Airespace led the way to submit LWAPP into Internet Engineering Task Force as a proposed standard, and Cisco is sponsoring that because customers demand it. A number of customers that may have chosen Airespace partially because they didn't want to go with Cisco now find themselves relying on Cisco for updates and support. How will you respond to the needs and concerns of those customers?
If you chose Airespace to avoid Cisco, I don't know what to say. We're trying to make sure customers feel comfortable as we continue supporting the products they bought, and we are going to accelerate the features available on their Airespace products. The product is going to be far more stable and far more feature rich because we've basically numbered the number of people working on the software. The industry has been focused on the rivalry in the WLAN switch market, particularly between Airespace and other startups like Aruba Wireless Networks, Trapeze Networks and Chantry Networks (now owned by Siemens). What's the biggest advantage your products have over Aruba, and the biggest advantage Aruba has over you?
Clearly, the merged Cisco and Airespace advantage is an end-to-end integrated story. To have security features on the wired network that are seamlessly available on the wired network without the challenge of making those systems interoperate is a huge advantage for us.
Competition is a good thing and it keeps us on our toes to maintain our advantage. However, I do not think our competitors have a leg up on us in any particular area. We felt like Airespace had a better ease-of-use story, one our customers liked, and that's why we chose [to acquire] Airespace.
We have a lot of resources dedicated to understanding the QoS and roaming issues that Wi-Fi voice has and we've made progress in that area. We're working with handset partners that are working on dual-mode phones and ensuring that those handsets will provide QoS, longer battery life and mobility. Cooperation between infrastructure, clients and handsets is not standardized yet, so we're working with standards bodies and we're also trying to get an early start on getting the correct features on these phones. We believe we're going to start shipping products in 2006. A major part of your strategy involves selling to companies beyond those organizations in early adopter verticals. Why do you think now is the time to make that push?
Less than 10% of enterprises have wireless LANs, so we're at the front end of a huge deployment wave. But enterprises understand that even though there may be theoretical security vulnerabilities with wireless LANs, there's a very real security vulnerability that comes from not deploying them. Today, when companies don't deploy the infrastructure, employees will do it themselves. We're also seeing a need to provision wireless LANs for guests. If getting network access for a guest requires an act of God because you don't allow unsecured wireless devices onto your internal network, then that's pretty rude. The two of you have been thrust together following the acquisition, but it must not always be easy to work as a team. What's your relationship like?
How we work together is still a work in progress. We obviously have our own strengths and weaknesses and we are in filling in the holes as we find them. Fortunately, we're very compatible. This isn't the typical type of integration. We really did merge our teams and product lines -- that's unusual for acquisitions. We both have alignment in our visions and we're both committed to stay until we see there's not a need for two of us in the job. Finally, during the next 12 months, what is the biggest surprise customers have to look forward to?
I think our customers will be pleasantly surprised with how we're able to integrate these products. We'll also bring them a lot sooner and more frequently than people expect. Prepare to see integration, scalability, security, telephony and location services. We're very busy.