November 6, 2013
While there is no debate that the data center is rapidly transitioning from the consolidation phase, led by virtualization, to the Cloud phase that is all about the application, there is a lot of debate on how we are going to get there. Cisco, with Insieme, and Arista both chimed in this week with product announcements, but when taking a step back, they both really announced architectures that are changing the dialog. It’s still all about the application, but the network could be kingpin of this architecture change.
Cisco, with Insieme, and Arista both announced new Modular and Top-of-Rack switching platforms based on merchant silicon from Broadcom. Throughput, speeds-and-feeds, and scale were all record-setting, but the real focus of both announcements was about the application. At the end of the day, the number of applications, and number of VMs, are all growing far faster than the human IT resources can scale, so the need to scale and automate has never been more important and both product announcements head in this direction. If we peel back the announcements further, it is going to be nearly six months until we actually get every product shipping in volume. Not really an issue given the expected weak 1Q14 in Ethernet switching.
New network topologies are leading to the development of entirely new switching platforms, and networking functions are being performed outside of the physical switch. Over the next five years, the number of vendors will expand and consolidate as the battle for supremacy in data center networking intensifies. The battle will include traditional hardware vendors versus traditional software vendors (such as Cisco vs. VMware for application control) and old incumbents against new start-ups (such as Cisco vs. Amazon for IT spending).
I also think it’s important to remember that Ethernet switching remains such a vibrant market because of the breath of vendors and the fierce competition they bring to the ecosystem. If you look at 1H13 results, in addition to Cisco, of the vendors we break out, six other vendors (Brocade, Dell, Extreme, HP, IBM, and Juniper) also exceeded $75M in Data Center.
It is very much an exciting time to be a participant in the Ethernet Switch market.