More immediately though are product issues, beginning with WAAS. Cisco is the No. 2 vendor in WAN optimization behind Riverbed, but a distant No. 2. Its share of the $1 billion market is about 12% to 13%, compared with Riverbed's 40% to 50%, according to Dell'Oro Group.

WAAS revenue declined sequentially for Cisco in Q1 as it did for every major vendor in the market, Dell'Oro noted. But Cisco's WAAS revenue is at or below the level it was in Q2 2010 while Riverbed's has grown roughly 30% since then, according to Dell'Oro figures.

Also, Cisco a year ago combined WAAS's standalone business unit -- the Application Delivery Business Unit -- into its Services Routing Technology Group, which may have necessitated this week's restructuring to eliminate redundancies.

Yet Cisco says it remains committed to WAAS and has no current plans to discontinue the product.

"Speculation that Cisco has dissolved the WAAS business is inaccurate," a company spokesperson said. "Our plan to deliver it pervasively as part of the WAN infrastructure remains unchanged."