In a statement e-mailed to CRN, a spokesperson for Cisco said: "Cisco routinely reviews its business to determine where it needs to align investment based on growth opportunities. In assessing the data center market, which is undergoing a fundamental transformation within virtualization, cloud, and new service delivery models, Cisco has decided it will not develop further generations of its ACE load-balancing products."

ACE products are modules for Cisco Catalyst 6500 switches and 7600 routers, providing load-balancing, content-switching, application acceleration and security capabilities. ACE manages up to 16 Gbps of application traffic in a single module, in a single Catalyst 6500 switch chassis, according to Cisco.

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Rumors of Cisco's ACE scale-down raced around the Web late last week following a research note from JMP Securities analyst Erik Suppiger suggesting Cisco is telling its salespeople to pull back from selling ACE.

Wrote Suppiger: "We recently learned that Cisco is advising its sales people to refrain from selling the company's application delivery controller product, the ACE 30 module, for new deployments. We understand this reflects the company's reduced development efforts for the product, which will result in limited feature advancements."

JMP's Suppiger also reported that Cisco has moved members of its ACE development team to other positions within its data center teams.

ADN is a specialized market to begin with, and one dominated by Seattle-based F5 Networks which, according to most analyst estimates, claims about half of the overall Layer 4-7 switching share. Cisco's ADN share, according to Dell'Oro Group and other research firms, is about 11 percent to 12 percent, down significantly from the roughly 29 percent to 31 percent it claimed as recently as four years ago.

The ADN market has since become more crowded as the technology gets hotter. Behind F5 is No. 2 player Citrix, estimated to hold between 15 percent and 17 percent, along with a host of other vendors, from Brocade and Radware to smaller, scrappier alternatives such as A10 Networks.

Suppiger's research note highlighted F5, Citrix and A10 specifically as being well-positioned to take advantage of Cisco's decline. Indeed, both F5 and A10 are among Cisco competitors that already are moving to capitalize on Cisco's decision.

A10, for example, confirmed to CRN details of a trade-in promotion through which customers can receive up to $24,000 plus installation and migration services for trading in Cisco ACE models for A10 AX Series ADCs. A spokesperson told CRN that the installed base for Cisco ACE products -- especially customers coming to the end of their current ACE product life cycles -- is large enough to make for plenty of attractive conversion targets.

Meanwhile, F5 has had a Cisco ACE trade-in credit program for the channel in place for years, but according to Dean Darwin, senior vice president, worldwide partner organization, the company is at work on other incentives to make the F5-for-Cisco swap even more appealing.

"The majority of large ACE deployments left are in the large pure Cisco enterprises where the smaller ADC vendors really do not play or don't have the enterprise features required, so this is a real opportunity for F5's channel," Darwin said in an e-mail to CRN.

The chief executive of a major West Coast solution provider with a significant ADN practice said he isn't surprised at Cisco's move or that its competitors are pouncing.

"That piece has been fading for Cisco for years -- there are way sexier manufacturers in that space with better products," said the solution provider, who requested anonymity. "We do sell Cisco [ACE] but it's mainly enterprises that love Cisco and want all of it Cisco. F5 ate Cisco's lunch in that part of the business a while ago."

Citrix and Radware did not respond to CRN requests for comment.

Cisco maintained during its global restructuring last year that it would exit or scale back underperforming parts of the business.

Among the other units from which Cisco has cut are in consumer, in which it shuttered its Flip videocamera and Umi telepresence, energy management, including its Network Building Mediator product, tablet computing, including canceling future investment in its once-touted Cius device, and its WAAS WAN optimization unit, from which it recently laid off a number of engineers and staff.

PUBLISHED SEPT. 17, 2012