Mandatory Cisco DNA Licensing – is this the Future??

With the release of the new 9200 series switches many enterprise organizations are starting to look towards the future. Cisco has also been looking towards the future… of their profit margin. With the 2960x platform is nearing it’s EOS/EOL announcement, Cisco has been working to promote the new hardware. And by now most Cisco enterprise customers have realized that DNA Center licensing is mandatory on your initial hardware purchase. This is certainly a deviation from Cisco’s normal à la carte licensing, but what do you think is the driving force behind all of this?

The era of SaaS and Subscription based licensing has been upon us for some time. Last year Gartner predicted , “By 2020, all new entrants and 80% of historical vendors will offer subscription-based business models”. These shifts to recurring-revenue models are the latest adaptation for companies like Cisco to continue to pad their bottom line with dollars their customers may not be ready to spend. After all, why would Cisco miss out on dollars left on the table?

When I started laying out the network hardware roadmap for the next 24-36 months, I quickly realized that costs for the Catalyst 9200 series will raise per port cost by 15-20% across a 5 year investment. That is enough to make many customers question why… or more importantly who they should be partnering with. This is in stark contrast to the pricing they offered with the 4500x replacement, the Catalyst 9500 series, where the TCO was rather comparable. Part of this additional uptick is the need to around additional licensing for Cisco ISE. It seems that in order to take advantage of ISE with the Catalyst 9200 series, end users have to buy DNA Advantage licensing, not DNA Essentials, which is the base license.

Note: I will admit that I have heard competing opinions on this, but I am using this Cisco PDF as a source, see page 43.

My thoughts…

This isn’t the first time Cisco has tried to push Customers into a software subscription model for their hardware purchases. Although their previous attempt, Cisco ONE licensing, was generally received about as well as a brick to the face. This time Cisco requires DNA Licensing on purchase, and forces customers who use popular features continue to renew the licensing. And since the new Cat 9k series are required to phone home, with their “Smart Licensing Feature”. Cisco has also puts a large damper on the Grey Market gear that they has been trying to squash for years. In my opinion subscription licensing has to make sense. Trying to license anything from Cisco, Microsoft, VMware, or any other large vendor has been an absolute nightmare for years now. These companies could learn a great deal from the new guys on the block like Slack, whose licensing model combined with their “fair billing policy “, makes a great deal of sense to end users.

Finally, I want to know what you think. Is the Catalyst 9200 something you’re looking forward to lifecycling into? Or are you suffering from heartburn after looking at the numbers? Am I crazy? Let me know in the comments.