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Cisco injects new life into Catalyst 6500 switch

Venerable Cisco Ethernet switch line gets major bandwidth boost

By , Network World
July 13, 2011 12:06 AM ET

Network World - Cisco Tuesday took dead aim at HP and its own shrinking profit margins by introducing a major refresh to its venerable Catalyst 6500 Ethernet switching platform.

The company announced at Cisco Live in Las Vegas the Supervisor 2T engine for the 10-year-old Catalyst 6500, which delivers 2 Terabits of bandwidth to the system. This is almost three times the scale of the previous Supervisor 720, and like with that offering, 2T bandwidth can be doubled when configured into what Cisco calls a Virtual Switching System.

Cisco also announced a new generation of 10G line cards for the Sup 2T and didn't mince words when describing the system's purpose: to marginalize competitive offerings from Brocade, Juniper and most significantly HP, which has been gaining share on Cisco of late with lower cost platforms.

NINE LIVES: Catalyst 6500 has another decade or more left, Cisco hints

"We reject ‘good enough' networks" which are marketed mostly on low price and drive commoditization, says John MCool, senior vice president and general management of Cisco's Core Technology Group.  "Our market share has hovered around 70%, or 50% of intelligent ports. We've been able to maintain share, and grow our core share, by delivering value to our customers."

At $38,000, the Sup 2T is priced at one-third that of HP's A9508 switch yet is 3X the performance and supports 200+ features or services, claims Scott Gainey, Cisco director of marketing for Unified Access Solutions. Cisco says it also almost doubles the amount HP spends on R&D -- $5.3 billion vs. $3 billion – even though Cisco is half HP's size in terms of revenue.

HP, citing data from Dell'Oro Group, says it captured 12% of total worldwide Ethernet switching revenue market share in Q1, up 2.5 percentage points year-over- year.  Cisco's share fell 5.8 points in the same period, HP claims.

But Cisco is also facing a troublesome switching product transition in which the high margin Catalyst 6500 is being squeezed by the lower margin, higher performing Nexus 7000 line. This is lowering switching profits for Cisco, which doesn't sit well with the company or Wall Street.

So the introduction of the Sup 2T may be a way for Cisco to maintain Catalyst margins in the face of the Nexus transition; or it may indicate that a large swath of the Catalyst 6500 base, especially in the enterprise campus, is resisting the migration to the Nexus.

McCool, however, says it's simply a case where the market is "bifurcating" into separate requirements for the enterprise campus vs. the data center.

"The market is bifurcating into a campus-based market needing deep services and the data center  converging LAN and SAN," McCool says. "It takes different technology. We'd be silly to walk away from that installed base and loyal set of customers."

Cisco says it has 25,000 customers for the Catalyst 6500 and 700,000 chassis installed worldwide, representing 70 million gigabit ports, 2.1 million 10G ports and 1.2 million supervisor engines.

It has quite literally been a cash cow for Cisco since its introduction in 1999.

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