Cisco is recasting itself as a services and applications vendor, announcing plans to tie all its enterprise technology into a services model.

This week it will release a new set of software tools to let customers monitor and measure network app performance - a far leap from its history of selling hardware and pushing packets.

The new products, and the company's Services Oriented Network Architecture (SONA) plan, promise to reduce corporate costs and move customers toward virtualised services, including security, voice, mobility, applications, management, processing and storage - with the network as the common facet.

Some observers say Cisco's moves put it on a collision course with most of its key application-related partners: IBM, Microsoft, HP and CA. Analysts say this type of toe-stepping and outright clashing is one of the biggest challenges for Cisco as it asserts its role in applications and SOA beyond its perceived image as a provider of network pipes.

In a series of presentations from Cisco execs last week, the company continued its mantra of 2005, that the network is the strategic centre for where IT intelligence should reside in enterprises.

"The network will evolve into the platform," CEO John Chambers told a group of 400 financial and industry analysts. "It's the first time in history that technology advances are determining the future business strategies of companies."

To that end, Charles Giancarlo, Cisco's chief development officer, identified Application Network Services (ANS) as Cisco's next Advanced Technology - or potential $1 billion annual revenue stream. ANS wraps all of Cisco's application-focused technologies under one umbrella: Layer 4-7 switching, WAN optimisation, application acceleration and its Application Oriented Networking (AON) technologies around XML and SOA.

In a broader sense, ANS will be part of Cisco's amorphous SONA strategy. SONA will encompass all of Cisco's enterprise technologies: wired network infrastructure, voice, applications, security and mobility. Giancarlo said the SONA initiative will be on the level of past major Cisco initiatives, such as Cisco Blue, where IBM and Cisco network technologies were blended, and the company's late 1990s AVVID push for voice, video and data convergence.