Cisco gets wise to wireless networking
By Ben Heskett
Staff Writer, CNET News.com
December 1, 1999, 5:00 a.m. PT
Nineteen ninety-nine may be remembered as the year Cisco Systems got wise to
wireless networking.
Through a collection of acquisitions and alliances, Cisco has assembled an array of
technology this year it hopes can fill the holes in its bread-and-butter network switches and
routing device lineup.
The implications of Cisco's entry into various wireless markets, from broadband technology
to Internet data systems, are simple: Customer demand has forced the company to act
just as the technology seems to have overcome many of the pitfalls that have stalled its
development in the past. True to its form, Cisco has acted through a combination of
acquisitions, partnerships and potentially savvy market development.
Cisco plans to detail its ambitions for the "fixed" wireless market later today as part of an
annual update for the financial and industry analyst community. The nascent niche,
comprised of pizza-size dishes that can transmit data at a high rate in congested areas,
has provoked increased interest from Cisco. It plans to share its technology with third
parties in order to spur the market forward.
Companies such as Cisco, along with competitors like Nortel Networks, Lucent
Technologies, Nokia and Ericsson, among others, are salivating at various wireless
opportunities. They're all finding that the number of people who want to be connected to a
private network or the Internet outstrips the reach of current land-based networking
technologies, such as cable, digitized copper phone lines or private connections run over a
backbone network.
In Cisco's case, wireless technology is just another option
in a strategy to provide "soup to nuts" networks for its
corporate, Internet service provider (ISP) and
telecommunications carrier customers.
"Wireless is a market we know we have to play in and we're
moving forward with that," said John Shantz, vice president
of market development at Cisco and acting general
manager of the company's fixed/mobile wireless unit.
Added one analyst: "For Cisco, if they see there's a sudden
demand for a technology, they have to make a move," said
John Armstrong of market researcher Dataquest.
Cisco has filled holes in its strategy through a variety of
means. Earlier this year, the company announced a broad
alliance with Motorola to develop a series of Net-based
technologies for wireless phones and other untethered
devices. That work continues, with a proposed set of
technology specifications in the hands of a select few
Cisco customers, according to executives.
The companies pledged to invest up to $1 billion to develop a new set of Net-based
wireless technologies. As part of the effort, Cisco and Motorola will open a regional
integration center later today in London so that customers can be trained on the potential
for the new wireless tools. Others are planned for Dallas, San Jose, Calif. and Tokyo.
Cisco's work with Motorola does not stop with traditional cellular wireless systems,
however. In June, Cisco and Motorola announced the purchase of Bosch Telecom's
broadband fixed wireless assets. Through that deal, a new firm, SpectraPoint Wireless,
was formed.
"Our view is that broadband as a competitive access play is going to be a very large
market worldwide," said Shantz. "Our relationship with Motorola is positive and continues
to broaden. [The market] is developing at a pace that's a little slower than developing
products for the Internet."
The 1998 acquisition of Clarity Wireless formed the basis for the company's effort in
October of this year to spur adoption of fixed wireless technology through a new standard.
The company enlisted third parties such as Motorola, Texas Instruments and KPMG,
among others, to build components or provide services based on the technology.
This marks Cisco's most ambitious bid to take a previously esoteric technology and try to
feed to it to a broader audience of network equipment customers. Though fixed wireless
systems have not made a dent of any significance in data networking, Internet growth and
a thirst for connections have brought formerly discounted options back to the fore.
"The technology is now absolutely proven to work," said Greg Raleigh, director of wireless
engineering at Cisco. "That's why we think we can really drive this forward."
Aironet Wireless Communications, a provider of wireless equipment for departmental local
networks, or LANs, was plucked by Cisco last month for $800 million, capping the
company's wireless moves for the year.
As evidenced by Cisco's patchwork entry into the wireless business, the technology will
primarily be used to give the company the means to build a more versatile network for its
customer base.
"The wireless data market is still a niche market," said Dataquest's Armstrong. "When it
comes to niche technology, Cisco is not a leader, it's a follower.
"They certainly don't want to be in a position where they have a gap in their product
portfolio," he said. "That's not their style."
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