Cisco Adds ‘G’ To Its Vocabulary

SAN JOSE, Calif. — Cisco Systems is taking advantage of its market share muscle to introduce its first 802.11g products for the enterprise.

At a press and analyst event at its campus here Wednesday, the networking equipment
maker debuted its Cisco Aironet 1200 (USD$899) and 1100 Series (USD$599)
IEEE 802.11g Access Points (APs) for wireless local-area networks (LANs).
The networking company said the new products are natural evolutions of its Aironet
802.11b lineup.

Cisco said it has taken great lengths to not only make the “g” products
backwards compatible, but has created a migration path for its “b” products
(commonly referred to as Wi-Fi) with 802.11g radio upgradeable modules. All
are shipping this month.

In addition to the two new “g” products, Cisco is
close to rolling out its 802.11g upgrade kit for USD$149. The Cisco Aironet
IEEE 802.11a/b/g CardBus has a $169 U.S. list price and the PCI Card has a
$249 U.S. list price.

As a standard, 802.11g operates in the 2.4 GHz band. The
mission of the standard from the beginning was to boost the data transmission to so-called “turbo” rates of 54 Mbps while still maintaining interoperability
with earlier specs. This way, consumers (and enterprise users, vendors,
investors and just about everyone else) who bet on earlier versions of the
technology would know how the market would eventually evolve. Alternatively,
802.11a is currently only licensed for usage in North America as opposed to
802.11b which is accepted throughout Europe and Asia as well. But the main
hurdle facing the end-user is that the two specs — 802.11b and 802.11a —
were never meant to interoperate.

Cisco senior VP of Ethernet Access Technology Group Larry Birenbaum said
802.11g products fit in with the company’s Structured Wireless Aware Network
(SWAN) initiative, which was launched earlier this year.

“We have the bread and butter stuff solid,” Birenbaum said of Cisco’s wired product line. “But our wireless Linksys products are being
adopted by consumers and SOHO [small office/home office] a bit higher than in the enterprise with our
Aironet products. We expect enterprise will kick up because there are
hundreds of millions of enterprise users in the world and the network that
they have will be of higher revenue.”

However, the barriers to adoption seem to be born of
perception, rather than reality, Birenbaum said, due due to three aspects: perceived
low ROI, perceived security holes, and deployment and management complexity.

“There is increasing traction in enterprise offices wireless LAN
Deployments,” he said. “The standards are resolving. There is growing
customer demand and a strong commitment by technology heavyweights.
Consumers are looking for wireless. We expect this will follow the similar
path of Ethernet and fast Ethernet in terms of adoption.”

Cisco certainly has a wide installed customer base and the momentum to help
its cause. Numbers posted Wednesday by the Del ‘Oro Group show Cisco in
command of the overall wireless LAN market with 44 percent market share. The
next two closest competitors, Proxim and Symbol support 27 and 22 percent
market share respectively. And as for wireless infrastructure, Cisco said it
jumped from 40 percent market share last quarter to 50 percent this quarter.

Cisco said some 70 percent of the customers it surveyed said
results were more accurate because of wireless connectivity.

The demand for wireless equipment seems almost insatiable. According to market analysis by Synergy Research Group, Enterprise WLAN equipment sales were up
17 percent sequentially and were up almost 26 percent year-over-year, while
SOHO/Home WLAN Equipment sales grew 16 percent for the quarter and were up
nearly 63 percent from the same period a year ago. Additionally, the
SOHO/Home segment represented 64 percent of the total WLAN market in the
third quarter of 2003, up from 58 percent in the second quarter of 2002.

Even more encouraging for Cisco’s partners and vendors are vastly
different types of devices that are being unwired. Kevin Frost, VP of
Worldwide Marketing for Hewlett-Packard , told that about 60 percent of its
current laptop products are being shipped with wireless capabilities. That
number is expected to grow to 90 percent by the time 2004 closes.

“We are putting wireless capabilities in our printing and imaging lineup
so people don’t have to worry about finding a network cable,” Frost said.
“There is also an application for the desktop to be the wireless access
point and we think it is an exciting area for us, but the crossover from
desktops to laptops is years away for us now.”

Frost said HP is currently looking at a hard switch to 802.11g-based
products as early as next year.

With the help of Intel , Cisco said the new “g”
devices will come with existing support for the Wi-Fi Protected Access (WPA)
encryption standard. Cisco is currently working on an Advanced Encryption
Standard (AES), which is also supported in hardware and will be enabled for
all Cisco Aironet 802.11g devices in 2004 via a free software upgrade after
ratification of the IEEE 802.11i standard. In addition, Cisco said it would
provide IEEE 802.11a/b/g enabled client adapters in CardBus and PCI form
factors supporting Windows XP and Windows 2000 operating systems.

But the key to Cisco’s success will come with the second generation of
its Cisco Compatible Extensions (CCX). After introducing them earlier this year and after months of extensive interoperability testing with Cisco Aironet
infrastructure at an independent testing lab, Cisco said notebook PCs with
embedded Wi-Fi from the top five players in this space (Dell, Fujitsu, HP,
IBM, and Toshiba) and client adapters from Linksys and NETGEAR have been
approved as Cisco Compatible. The company said version 2.0 of its CCX
products should start showing up in devices in 2004.

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