Cisco Bolsters Its WLAN Hand

Cisco Systems Inc. (Nasdaq: CSCO) moved to secure its position as the leading supplier of wireless LAN equipment to enterprises today by agreeing to "no cost" licensing deals with seven 802.11 chipset vendors (see Cisco Licenses WLAN Code and 802.11 WLAN Shipments Double).

Between them, the seven silicon sign-ups – Agere Systems (NYSE: AGR/A), Atheros Communications, Atmel Corp., Intel Corp. (Nasdaq: INTC), Intersil Corp. (Nasdaq: ISIL), Marvell Technology Group Ltd. (Nasdaq: MRVL), and Texas Instruments Inc. (NYSE: TXN) – accounted for about 90 percent of the 802.11 chipset market in terms of units shipped in 2002, according to research from IDC.

The remaining slice of the market is accounted for by Broadcom Corp. (Nasdaq: BRCM), which is planning to join the program but is "still working out contractual issues," according to Jeff Abramowitz, senior marketing director of Broadcom's wireless LAN business.

So what's the deal for the chipset firms? Basically, the "Cisco Compatible Extensions" program allows these silicon makers to integrate Cisco "features" into their chipset designs, whether for embedded products (PCs, PDAs) or standalone devices (WLAN cards). The only cost is in testing their products for compatibility with Cisco's WLAN gear, but no money is paid to Cisco itself.

The whole program is also supported by two key PC companies – IBM Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ) – and Cisco expects more OEMs to follow suit. Any products incorporating the relevant functionality will be able to carry a "Cisco Compatible" brand, in much the same way as Intel products carry the "Intel Inside" brand.

All very neat, then. However, these "features" – the most important of which involve the security of 802.11 networks – will only work with Cisco's wireless LAN equipment, as the capabilities are "pre-standard" [ed. note: most people call that proprietary] and therefore only found in Cisco's networking kit.

Jon Hindle, strategic technology manager of mobile networking at Cisco in the U.K., says the main aim is to stimulate the overall uptake of wireless LANs by enterprise customers, as companies will feel happier about deploying 802.11 equipment if they believe the key issue of security can be addressed. "The main feature is called TKIP, or temporal key integrity protocol," Hindle says. "This cycles the security keys quicker than they can be broken by anyone attempting to hack a Cisco 802.11 system. This is a security method that we are pushing to be part of the industry standard, and once that specification is agreed we will modify our software to make it compatible with the agreed standard."

Cisco's main aim, says Hindle, is to provide the sort of features that users want now, without having to wait for an industry body, in this case the Institute of Electrical and Electronics Engineers Inc. (IEEE), to complete the standards process. "We are trying to stimulate the market and encourage companies to deploy wireless LANs. We are not trying to lock companies into our equipment. As soon as there is a standard, we will make sure our products are compatible."

By the time such features become standard, eliminating Cisco's functionality advantage over its competitors, it aims to have developed other applications that will keep its 802.11 network kit a cut above the rest. This is crucial, because as prices fall, functionality is increasingly the key differentiator between vendors. In order to maintain its number one position – Cisco owned 31.5 percent of the $809 million enterprise WLAN market in 2002, according to Synergy Research Group Inc. – the networking giant believes it needs to offer enhanced features ahead of the rest of the market. However, to make these features relevant, enterprise users need to be able to buy devices, such as laptops, that can make use of such functions. Which is where this program comes in.

Industry analysts are supportive of the move. "This will help to drive the 802.11 market, as well as drive the uptake of Cisco's networking equipment," says IDC semiconductor market analyst Ken Furer. "It addresses some of the security issues for IT managers, and will help them become more comfortable with the idea of deploying a wireless LAN. Of course, it's good for the chipset vendors too, as they get a free license to use Cisco software."

Aaron Vance, an industry analyst at Synergy, sees this as a boon to enterprises that are already using Cisco's wireless LAN equipment, as it will mean more products on the market that support Cisco's specific features. Surprisingly, he doesn't believe it will have a major impact on Cisco's market share. All Vance would say was, "There may be some indirect benefits from better branding."

— Ray Le Maistre, European Editor, Unstrung

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wifihammer 12/5/2012 | 3:06:15 AM
re: Cisco Bolsters Its WLAN Hand ROFLOL!!!
deepciscothroat 12/5/2012 | 12:34:35 AM
re: Cisco Bolsters Its WLAN Hand ha......
lrmobile_cklunt 12/5/2012 | 12:34:32 AM
re: Cisco Bolsters Its WLAN Hand Oops -Guess we don't need any standards comittees
anymore ... might as well just roll over and let cisco make all our decisions for us.

What crap! This just means more stifled innovation courtesy of the Macdonalds of networking.

bbwman 12/5/2012 | 12:34:19 AM
re: Cisco Bolsters Its WLAN Hand Well they do not have anyone who understands wireless, much less any experience will building wireless networks. 802.11 is trivial and they aquire that, so they are just lending thier name brand (McCisco) to mask thier exit of the market.
Do not worry about the bozos.
deepciscothroat 12/5/2012 | 12:34:11 AM
re: Cisco Bolsters Its WLAN Hand 34% of the total market
dominant share in the enterprise
lucent just bought our data gear
yup. we know nothing
wifi_radio 12/5/2012 | 12:34:09 AM
re: Cisco Bolsters Its WLAN Hand We've got the excalibur sword, Modrid. Go back to your master and tell them (Modrid/JohnChambers/GregRaleigh) that the time has come for us to take over the crown. :-)

We expect the Modrid' dark power to exercise this muscle and we are READY for that! The IEEE standard and the truth will shine above the darkness with your proprietary extensions.
bbwman 12/5/2012 | 12:33:49 AM
re: Cisco Bolsters Its WLAN Hand maybe he will aquire you - as they need some technology and it sure won't be developed in-house.
bbwman 12/5/2012 | 12:33:48 AM
re: Cisco Bolsters Its WLAN Hand he might aquire you - as they need some technology and it sure won't be developed in-house.
rphanley 12/5/2012 | 12:33:29 AM
re: Cisco Bolsters Its WLAN Hand Apparently they are attempting to shore up their pre-standard implementation as usual. Their LEAP was rejected as being insecure, so now they have to make sure it gets into all of the silicon to protect their installed base. Really a purely defensive move. The silicon vendors will have to also play to the standard, when it is ratified so this is moot for the industry. Typical crisco, just like all of their proprietary BS.
All you have to do to sell against it is to make sure your customers understand that if they buy crisco wireless, they're getting locked in. Most won't tolerate that anymore. Meanwhile for the chipset guys it just makes sure they can cover all of the bases, even non standard less secure implementations such as criscos.
deepciscothroat 12/5/2012 | 12:33:26 AM
re: Cisco Bolsters Its WLAN Hand We need inhouse. Our products have creamed Symbol and Proxim/Orinoco. The start-ups are toast

What we did was make it easier for enterprises to deploy wireless LANs more securely and know the clients would work easily

Monopolistic or Magnificent?
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