Cisco's CTO on the non-future of WAAS

Cisco CTO Padmasree Warrior made some comments about WAN optimization earlier last week.  Naturally I was interested for competitive reasons, because it’s useful to understand how the WAN optimization market looks to someone senior at Cisco.  

 First, a disclaimer: the source is an article in the trade press, and it’s quite possible that Ms. Warrior was misquoted or misunderstood.  So I must acknowledge that what I’m analyzing is not as solid as something that she wrote in her blog or said in a context where I could have heard it for myself. 

 Next, let’s review the context.  Gartner recently released a new “Magic Quadrant for WAN Optimization Controllers.” If you want to read it, follow this link. Gartner is very strict about how we are allowed to refer to the content of the MQ, so I’m not going to even try to characterize the relative positions of the vendors there; but suffice it to say that Cisco fans weren’t happy. So the question to Ms. Warrior was essentially, how did she react to this situation?

 A further observation of context here: Ms. Warrior is the CTO of a $40 billion (annual revenue) company, while the company’s WAN optimization product WAAS brings in only about $200 million – a mere 1/2 %.   So it would have been understandable if she had deferred the question pending further research.  (Even in much-smaller Riverbed, I have come to terms with the reality that I am unlikely to know everything interesting about every product.)

But instead she made two assertions: first, that WAN optimization is really just a feature to be delivered by Cisco network platforms; and second, that such integration is prompted by cloud and software-defined networks.

Those of us who’ve spent some time with WAN optimization are very familiar with the Cisco claim that WAN optimization is merely a feature of routers.  Indeed, some ten days before the Riverbed IPO in September 2006, Cisco hosted a “Tech Talk for Investors” webcast by George Kurian, who was then GM in charge of Cisco WAAS.  Here’s the summary from the announcement:

WAN Application Acceleration is one of the fastest growing market segments in enterprise IT infrastructure. This webcast presentation will review the key requirements of this space, and illustrate how Cisco is best positioned to take leadership in this market with the recently announced Cisco Wide Area Application Services (WAAS).

Unfortunately, that talk is no longer available on Cisco’s investor relations site (it would make for fun listening if it were) but the ideas put forward were also reflected in a number of articles in the trade press at the time.  Entertainingly, among the articles reporting the 2006 Kurian pitch about network-integrated WAAS was one in the same British IT publication that also reported Ms. Warrior’s 2012 version.  In that old article, we learn that Cisco’s approach is to “slot into existing IP networks and infrastructure, improving WAN performance without disrupting existing day-to-day processes and functionality.” Talk about déjà vu!

Here we are some six years later, and the underlying ideas are basically unchanged.  The old wine of “network integration” is being put into new bottles labeled “cloud” and “software-defined networks” but there’s clearly no real rethinking happening.  Apparently a continuing decline in market share and the less-than-thrilling Magic Quadrant showing aren’t enough to prompt people to try a different course.  And WAAS as a product appears to have no future, to judge from Ms. Warrior’s view on integration. As a competitor, this is fine with me; but if I were a Cisco shareholder I might be annoyed.

What’s particularly ironic about Ms. Warrior’s reaction is how it relates to the underlying Gartner criticism that prompted the Magic Quadrant change (that in turn gave rise to the question she was asked). The MQ has two dimensions, "ability to execute" and "completeness of vision." Cisco's problems were mostly on the “completeness of vision” dimension. As the 2012 article indicates, there were specific concerns raised about the speed and quality of innovation. Cisco’s CTO inadvertently confirmed the diagnosis by being unable to say anything interesting about the future of Cisco WAN optimization.