Some analysts said it would make more sense for Cisco to create complementary products rather than go head-to-head with existing middleware companies. However, any push by Cisco into XML-related networking would likely encroach on the area already occupied by XML networking specialists.
Word of Cisco's middleware plans was first reported by the Web site Light Reading.
Eugene Kuznetsov, CEO of DataPower, said all traditional networking companies will be forced into building application-level networking capabilities as they seek to expand their markets. XML-based Web services protocols make it possible, because they provide standards for integration tasks that once required extensive custom coding.
"For a long time, Cisco tried to stay away (from middleware) because it was hard to sell," Kuznetsov said. "Now it's practical to make a box that can be sold that basically replaces that middleware."
A networking industry pioneer, Cisco is on the prowl for top-line revenue. The company's torrid growth rate during the 1990s has cooled, and Cisco is trying to find new markets by adding "intelligence" to its hardware.
The vision is to have a networking infrastructure that provides centralised functions for all applications, such as voice over IP and security. It has also relaunched its assault on the telecommunications market with high-end gear.
As part of its expansion strategy, the company has singled out consulting services as important to its future. At a recent analyst briefing, company executives said Cisco intends to beef up its consulting business to provide a more strategic supplier to corporations.
"They understand that in the long term they aren't going to be an equipment company. Look how IBM morphed over the years," said William Becklean, a financial analyst with Oppenheimer and Co. "They have to act as a trusted advisor."
The push into application-level switching offers both a potentially high-growth business and a natural extension to the company's existing business, analysts say.
"Cisco has talked about the ability to help companies with network-based business processes," said Jon Oltsik, an analyst at researcher Enterprise Strategy Group. "XML or Web services are going to be core to new kinds of network business processes, so this area is right down Broadway."
