The skinny on Cisco's product strategy

Wondering what networking giant Cisco Systems has up its sleeve? Mario Mazzola is the man to ask.

Mazzola, the company's chief development officer, is one of the most influential executives in the company. Specifically, Mazzola heads Cisco's overall research and development strategy, and manages its entire engineering organization, comprised of 11 technology groups. He is responsible for the development of the company's routing software, core Internet Protocol (IP) routers, Ethernet switches, network management services, optical networking equipment, storage switches, voice technologies and wireless gear.

Born and raised in Italy, Mazzola has been with the company since 1993, when Cisco acquired Crescendo Communications, the start-up he co-founded in 1990. It was Cisco's first acquisition. Today, Crescendo's technology forms the basis of one of Cisco's most successful product lines, the Catalyst, a local-area network (LAN) switch.

CNET News.com caught up with Mazzola after Cisco unveiled its next-generation core Internet router in late May. After four years of development and a $500 million investment, Cisco finally revealed the new IP core router, which it asserts can scale a capacity of up to 90 terabits per second. In an effort to satisfy carrier demands for better reliability, resiliency and scalability, the company developed a new operating system for the router, IOS XR.

Cisco just spent $500 million over the past four years to develop its next-generation core IP router, the CRS-1. When do you expect to start making some of this money back?
This is a long-term type of investment. We don't expect a return in one year. But it's hard to be specific, especially when you consider that the technology will be leveraged in many other products.

In the past, we've always exceeded our expectations. When we first introduced the GSR 12000, we thought we'd only sell 1,000. To date, we've sold about 25,000. With high-end platforms like this, the penetration is not huge. It's hard to imagine when service providers will need to scale to 90 terabits per second. But I think that if you make the bandwidth available, carriers will find applications to use it. I am always amazed at how quickly technology changes.

Cisco just started shipping the latest version of its IP core router, the Gigabit Switch Router, or GSR 12800, last quarter. But doesn't the introduction of the CRS-1 make the GSR obsolete?
No, not really. There is still a need for different products in our portfolio.

I think that if you make the bandwidth available, carriers will find applications to use it.

Somebody building a network completely from scratch may want the latest and greatest technology. But there are a lot of customers with $40 million to $50 million investment in GSR technology. The GSR 12800 offers them an opportunity to upgrade and quadruple performance.

What is the strategy for the new operating software Cisco has developed? Will it be extended to the rest of Cisco's routers?
Right now, we are announcing IOS XR just on the CRS-1. We are considering expanding the offering on other products. We aren't making any announcements right now, but we are expecting to leverage it on different product lines, such as the GSR.

Will it be used in any enterprise products?
We don't have plans to use the software on enterprise-specific products. There are different requirements for support in the enterprise, but some aspects of the IOS XR software could be used in the enterprise. So we will likely move some desirable characteristics of the software into some of these products. But these products don't necessarily need the fine-grain modularity of IOS XR.

Do you think that by developing a brand-new operating system specifically for the service provider market that Cisco is admitting to its carrier customers that the old version of IOS is not up to snuff?
Not necessarily. Service providers need much higher levels of resilience and modularity than enterprise customers. IOS doesn't have the level of modularity that the IOS XR has.

Some software features are missing from the IOS XR, such as support for IP version 6 multicast and for multiprotocol label switching (MPLS) virtual private networks. Some experts say the new software lags behind older versions of IOS in terms of features by at least a year. What is your response to this?
Do we have all IOS features on the IOS XR? The answer is no. But we have more features in IOS than any other routing software in the entire industry.

You mentioned earlier that Cisco may offer the new IOS XR software on the GSR platform. How will the company make this transition?
We started testing the new software before we even developed the hardware for the CRS-1. So a lot of the testing for the IOS XR was done on GSR hardware. If customers ask for it on the GSR, chances are that we will introduce extensions.

During the event for the launch of the CRS-1, Cisco CEO John Chambers alluded to a wave of new product introductions this year. Can you give us some idea of what will be coming?
I can't preannounce anything, but you will see an unusual richness of new announcements. Clearly, there will be advancements in routing. But it will be rich across the board, including LAN switching, storage, security, IP communications. There will also be a lot of announcements in vertical segments, like cable and mobile wireless LANs.

Critics say Cisco is not a real technology innovator. They claim that the company waits for a market to develop, and then it acquires start-ups in those markets. What's your reaction to this?
It's true that Cisco has acquired a lot of technologies, but it takes those technologies and develops them into products. I came to Cisco as part of the company's first acquisition in 1993. If Crescendo had remained on its own, even with a good team, we couldn't have done what Cisco has been able to do in the past 11 years. Cisco has used the acquisition as a catalyst--no pun intended--to enter a new market and evolve the technology.

It's true that Cisco has acquired a lot of technologies, but it takes those technologies and develops them into products.

Nobody is perfect. In certain cases, we have been a little late. Optical is a good example. We failed to see the opportunity there. Once we realized that we had failed there, we decided to acquire a few companies in that area.

From my perception, the cliche that Cisco doesn't innovate internally has become exaggerated. We've been at the forefront of inventing IP telephony and enterprise wireless. In LAN switching, we are leading the market in 10-Gigabit Ethernet technology. The reality is that our innovation is remarkable, compared with other companies of our size. I guess I am a little biased, though.

You mentioned the acquisition of Crescendo in 1993. That acquisition has turned out very well for Cisco. Technology acquired from that company has been used to build the Catalyst line of LAN switches, one of Cisco's most successful product lines. On a more personal note, how did the acquisition impact you?
The fact that I am still here shows that it has been beneficial. Since I've been here, I feel that I have been able to keep the same level of decision making and autonomy that I had when the company was on its own. The technology that was developed at Crescendo has had a much stronger impact on the industry as a part of Cisco than if we had been on our own. I am an engineer by background, but I don't believe in technology for the sake of technology. In this business, you really need to compare notes with customers and the rest of the industry. Cisco has always had a close connection with its customers.

Juniper Networks is clearly Cisco's biggest competition in the IP routing market. It recently entered the enterprise security market with its acquisition of NetScreen Technologies. What do you think about Juniper?
Juniper is a good company. And I think it's good for Cisco to have a good competitor. It keeps us more focused and on our toes. It keeps our entrepreneurial and competitive spirit alive. I am Italian, and if you go back in time, Carthage was a good antagonist for Rome. Problems happened for Rome years after, when the competition no longer existed. I think that good competition is healthy for us.