Cisco is enticing companies to use its networking, computing and security software by bundling them with hardware...
designed for specific purposes and sold under a single license.
The company introduced Tuesday its Cisco ONE (Open Network Environment) Software suites. The all-in-one products cover a half dozen use cases within three networking categories, the data center, the wide-area network (WAN) and wireless access.
In addition, Cisco has expanded its portfolio for building private and hybrid clouds by widening the capabilities of the technology stemming from the $1.2 billion acquisition of Meraki in 2012.
Cisco ONE strategy leaves a la carte behind
Mike Frattoanalyst, Current Analysis
The strategy behind Cisco ONE is to shift IT buyers from the current a la carte purchasing model for infrastructure applications to software preinstalled in hardware. Cisco is marketing the change as a simpler and less expensive alternative to choosing from hundreds of its own separately priced software features. However, some experts say the cost of a Cisco ONE bundle could end up being higher, if a buyer fails to purchase enough capacity under the single license.
The biggest advantage of Cisco ONE is a consistent software model across all products, Ray Wang, analyst for Constellation Research, said. "Whether you are in the cloud, whether you are on a mobile device, whether you're in a WAN or whether you're in a data center, all the stuff is now the same."
Cisco ONE is comprised of three layers. The foundation tier includes core networking, security and systems software, along with network and energy management. The second layer, which Cisco calls "advanced," includes software capabilities specific to the use case. This tier is for IT departments to build capabilities on top of the foundation layer. Finally, Cisco has built a security layer across all the domains, which is more advanced than the security built into the foundation alone.
Use cases for Cisco ONE
Cisco ONE is an attempt to get more software in front of potential buyers, Mike Fratto, analyst for Current Analysis, said. "Like many (hardware) companies, they have struggled to sell their software, both direct and through the channel."
Cisco ONE bundles are available for the company's Unified Computing Systems (UCS). Packages are also provided for combining location-based analytics with a wireless network, building WANs for branch offices and automating infrastructure services and IT processes within the data center, Fratto said.
Other packages include the Enterprise Cloud Suite for a hybrid-ready private cloud and a bundle for what the company calls "unified access," a converged wired and wireless network designed to support businesses' bring your own device policies.
Pricing upsides and downsides
Cisco ONE products are sold via a perpetual or subscription license. A company can continue to purchase software features a la carte, if the suites do not fit the customer's needs.
Cisco claims the ONE bundles are from 20% to 30% less than purchasing the components separately, Fratto said. The final price of a ONE product depends on the amount of software and other components in the bundle.
The downside of the pricing model is that if a company needs to increase the capacity of the Cisco ONE bundle due to an unexpected increase in demand, then the customer could end up paying more than if it had bought individual components, Fratto said.
"If you go above the capacity access (for the Cisco ONE bundle), you're going to end up paying more for everything," Fratto said. "You can't just scale up one part. You buy entitlements for everything."
With Meraki, Cisco said it has expanded the original software-centric Wi-Fi portfolio to include wireless access points, Ethernet switches, security appliances and mobility management applications.
Cisco purchased Meraki to incorporate its technology within Cisco's platform for managing cloud networks.
Over the last six to 12 months, Cisco Meraki has grown from serving midsize companies to enterprises with distributed branch offices, the vendor said. Large customers include insurance company Penn Mutual, construction company Ledcor, lab supplier VWR International and energy service company Sanjel.
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