Cisco Unveils Open Wireless Product to Boost Mobile Presence

NEW YORK -(Dow Jones)- Cisco Systems has high hopes its new mobile services platform, which the company is opening up to outside developers, will boost company's presence in the wireless arena.

The San Jose company's newly unveiled Cisco 3300 Series Mobility Services Engine - a pizza box-shaped piece of equipment with specialized mobile software - will allow customers to tie together a local network, such as one owned by a business, with larger outside cellular networks. The platform is meant to bolster Cisco's previously weak position in wireless.

Similar to recent moves by other high-profile technology players, Cisco plans to open the platform up to third-party developers, marking a drastic change in the traditionally closed-off network equipment world. It hopes the services and programs created will generate new sources of revenue.

The mobile platform "suggests the direction that Cisco is going is pretty different," said Ellen Daley, an analyst at Forrester Research.

The "open" banner has been carried by the likes of Verizon Wireless and Google. Also, Apple recently opened the system for its iPhone to independent application developers.

But now Cisco is trying to take the concept, which was mostly for consumer products, to the corporate world.

"It's a relatively new direction for us," said Ben Gibson, director of mobility services marketing at Cisco. "Typically, you don't think of the network as an open platform."

In allowing services written by others to run on top of its networking gear, Cisco hopes it can provide an overarching technology platform to its customers, giving it the opportunity to take a larger share in its customers' IT budget, he said.

Others are more skeptical. It's much easier to write a program or service for consumers because there are lower standards and fewer security issues than in a corporate environment.

"It's not quite that open," said Ken Dulaney, an analyst at Gartner Inc. Cisco "will be selective with who they will work with."

New Platform, New Goals

Cisco's focus has traditionally centered on the landline network and grounded infrastructure. It's presence in wireless has mostly been in smaller Wi-Fi networks rather than much larger cellular networks. The mobile platform represents a change in direction and an acknowledgment that it needs to start dealing with wireless networks.

"It's a tacit recognition that the networking paradigm that Cisco has sold for many years is changing," Gartner's Dulaney said.

Cisco has for years sold network gear and desk phones, but lacks a presence in cellphones. The platform will allow corporate IT department to manage the security and services for employee cellphones. One such feature is the corporate management of phones switching between the office Wi-Fi network and the cellular network on the outside.

"Cellphones is what the rest of the world is basing its future on, not the office desk phone," Dulaney said.

Cisco is looking to expand beyond its already dominant position in the corporate wireless local area network market. The networking titan held 62% of the $1.5 billion market last year, according to market research firm Dell'Oro Group. But with the mobile engine, it wants to serve both local and wider ranging cellular networks.

"As you look closer, the mobile world starts to look bigger than it is today," Gibson said. He added there is opportunity in using the mobile platform to keep track of items such as valuable goods or medical equipment.

For Cisco, it's a small step in the right direction.

"Whether or not they'll be successful at it remains to be seen," Daley said.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 28th May 2008