But Forrester Research senior analyst Robert Whiteley said Cisco is right, the company needs to evolve its software model.

Whiteley said the ubiquity of IOS, the myriad features it supports, and the fact the software is basically thrown in for free when users buy routers with support contracts all add up to a sometimes confusing pricing model.

"There is a lot of value locked up in [IOS]," Whiteley said. "I don't want to say it's money on the table [for Cisco], but as network products become more intelligent, that means IOS becomes a more valuable asset. So decoupling that makes sense for Cisco."

(Phil Hochmuth of Network World (US) contributed to this story)