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Cisco-FineGround Won't Go Beyond the WAN

Cisco Systems Inc. confirmed today that it is acquiring FineGround, a privately-held company that makes WAN acceleration technology, for the tidy sum of $70 million.The acquisition shows that Cisco understands the need to make more efficient use of WAN bandwidth -- a lesson that it has never seemed to learn in the campus.

Over the years, Cisco has acquired a number of companies that promised better bandwidth management and route optimization, but its strategy in the campus still seems to be a brute-force approach: when you run low on bandwidth, you simply buy more.

Cisco's strategy in the campus is hardly surprising, given that it makes its profit on network hardware. LAN bandwidth is generally cheap, so a company like Cisco has no real incentive to optimize it. In fact, Cisco does best when bandwidth is poorly utilized, and enterprises solve the problem by buying more hardware, rather than doing in-depth performance analysis or traffic prioritization. In the WAN, it's a different story, because every packet is carried by a service provider that charges a premium for the privilege. Network optimization has always done well in the WAN, because enterprises don't like paying for more WAN bandwidth than they need.

Could FineGround's bandwidth acceleration and optimization technologies be adapted to Cisco's campus product lines? It's technically possible, but don't hold your breath. When it comes to making better use of bandwidth, Cisco's approach is generally WAN-only.