Cisco's FineGround buy signals big change in the WAN optimization sector

* Cisco acquires FineGround, HP signs OEM deal with Riverbed

In the May 10 newsletter, we commented on Juniper's acquisition of WAN optimization developer Peribit and application front-end vendor Redline Networks, and speculated that Cisco would likely also acquire an application acceleration company. On May 26, Cisco confirmed the speculation and announced plans to acquire FineGround, a company that focuses on Web-based applications acceleration and optimization. The news followed a May 17 announcement that HP has signed an OEM agreement with WAN application acceleration specialist Riverbed Technology.

A number of well-documented trends are driving this industry turmoil: the deployment of mission critical applications such as CRM to branch offices, as well as the centralization of servers and storage devices. Technologies that focus just on fatter pipes will not solve some of the very significant performance problems raised by these trends. The solution requires a tight integration of functionality across all seven layers of the ISO model.

Providing this integration introduces considerable pressure throughout our industry. Juniper, HP and Cisco are under pressure to quickly show results from their recent acquisitions and alliances. Vendors such as Avaya, Nortel, Alcatel, 3Com and Siemens are under pressure to develop a broader strategy for ensuring performance, which will likely include making acquisitions and establishing alliances. 

For the myriad companies in the optimization space, now is the time to be either acquired or develop a number of key alliances, or risk an uncertain future.

Perhaps the greatest pressure falls to IT organizations that can no longer ignore the need for this integration and yet do not have any fully developed solutions that can be easily implemented today.

Copyright © 2005 IDG Communications, Inc.

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