Cisco’s Strategic Box

Cisco's ASR 5500.Cisco’s ASR 5500.

Cisco just announced a product that it hopes will give it something it needs just as bad as revenue: relevance in two of the hottest trends in tech, the mobile Internet and software-defined networking, or S.D.N.

The product, an Aggregation Services Router (A.S.R.) 5500, has a name that is aimed at a pretty technical crowd. It will be used by phone companies and their like to provide Internet services to mobile users. It moves terabits of data to mobile phones and tablets.

This is a big deal because of how much of the Internet we’re now consuming on the go. In a study it released last February, Cisco projected that by 2016 some 54 percent of all Internet traffic will involve mobile devices. That is 18 times more than the current consumption. It’s not a crazy projection; in a recent report, the Internet guru Mary Meeker said 29 percent of adults in the United States owned an Internet-connected tablet or an e-reader, up from just 2 percent three years ago. Globally, there are now over a billion people using high-speed wireless services, she said.

The explosion of phone apps and their heavy use of data was crippling Cisco’s old gear, with billions of tiny “pings” of information between the app and the network all day. The new machine aims to fix that by managing apps differently than the way calls or even video was handled.

It is the kind of thing that Cisco hopes will bring it back from several tough years of lower margins and new kinds of competition. “This is a once-in-a-decade platform for the company,” said Murali Nemani, a senior director in Cisco’s service provider group. “The Internet going mobile is a big companywide play.”

The ASR 5500 hits the market with only two big customers, Bharti of India and Verizon Wireless. Cisco is hoping that the box’s performance helps it regain “thought leadership,” the engineering bragging rights that can attract and retain new talent. While Cisco still has the dominant share of the networking market, it has been facing increased competition from both Hewlett-Packard and innovative new companies like Arista and Nicira.

Nicira and a few other S.D.N. companies are a particular threat to Cisco, since they aim to sell very cheap and powerful networking products into cloud computing companies. Cisco recently financed an S.D.N. company of its own, a risky move that could destroy some of its existing business and alienate a lot of the engineering rank-and-file.

While the ASR 5500 is very software-intensive, Cisco packaged it in specialized hardware that hooks into traditional systems. Mr. Nemani says the custom boxes are still necessary. “The performance requirement doesn’t match up in S.D.N.,” he said. “It’s not a universal truth. S.D.N. gives some price/performance improvement, but we’ve found this increase of 10 times in capacity is a better benefit.” In other words, old ways still have plenty of life at Cisco.