Cisco ISR Upgrades Gain Momentum on Secondary Market

July 5, 2007: Beginning with the 2005 release of Cisco Systems' new Integrated Services Router (ISR) and culminating with an end-of-life announcement for the company's legacy models in April of 2006, customers have begun to transition to Cisco's next generation of networking devices. While Cisco will still offer technical support for their 1700, 2600 and 3600 series routers through 2012, customers are taking this opportunity to bolster their WAN infrastructure with Cisco's latest offering.

Cisco's Integrated Services Routers extend the company's leadership in multi-service routing by transparently integrating advanced technologies, adaptive services, and secure enterprise communications into a single, resilient system. The ISR router series is designed to run simultaneous services such as data, security and quality of service (QoS) at wire speed in one compact, fully-integrated routing platform. This technology advance enables customers to account for network expansion or changes in technology as new services and applications are deployed.

Companies that have been relying on the 2600 are upgrading to the 2800 ISR because the 2800 offers a variety of expansion modules which offer built-in security and voice-over-IP acceleration, along with standard WAN features such as T1/T3 connectivity. These features are now built into the ISR, which previously had required either external modules or presented a burden on processor and memory resources. Companies are increasingly looking for fully-integrated solutions that provide switching/routing, security, voice over IP, optimization, and WAFS in a single, all-in-one device.

Cisco's ISR line, including the 1800, 2800 and 3800, has experienced one of the most impressive growth rates in the company's history. As of Q1 2007, Cisco had shipped more than 2 million units and reported $27.8 million in revenue from its WAN optimization products. Until very recently, Cisco's Integrated Service Routers were predominantly available new from certified resellers; however, over the last twelve months, more and more integrated service routers have started showing up on the secondary market. With more options, customers who were previously hesitant to upgrade have started taking advantage of increasingly attractive deals and trade-in value.

The recent push to upgrade has resulted in a significant increase in business for many resellers on the gray market as owners of the older technology trade-up. Chris Hill of Townsend Assets Group, a leading used technology reseller reports a dramatic increase in technology acquisitions in the first quarter of 2007. "With companies seeking to maximize their network performance and keep their technological edge, we've seen a spike in both customer trade-ins and overall buying opportunities." Hill goes on to add, "End-of-life announcements do not necessarily mean these products are heading out to pasture. This means that another generation of Cisco routers will be handed down for small and start-up companies looking to reduce costs by buying used."

As companies push for more efficient and centralized network solutions, Cisco and other technology providers are understandably taking notice. With a total market expected to exceed $652 million by 2010, manufacturers as well as resellers are lining up to grab their share of the wide area network (WAN) optimization market.

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