Welcome!

SDN Journal Authors: Liz McMillan, Patrick Carey, Corey Eng, Haim Koshchitzky, Pat Romanski

Blog Feed Post

Cisco Classic, Cisco ACI, Arista, and Dual Vendor Strategies

That networking gear is expensive is not really a new phenomenon. SDN and bare metal switching have kicked the industry dialogue about cost up a notch, but this has obviously been a focal point for networking buyers for years. And even though things like merchant silicon and software can help drive networking costs down, the biggest driver of lower networking costs by far is competition.

This is why most large IT buyers have employed dual vendor strategies over the past several years. The general theory is that the introduction of a second supplier will promote competition between vendors. This competition places downward pressure on pricing, allowing the buyer to negotiate better discounts. More simply, if Cisco knows that Arista is knocking on the same door, they will be more likely to offer steeper discounts.

There are some nuances in how this plays out.

First, there needs to be a real threat of incumbent displacement for the pricing pressure to be real. If a buyer grabs a supplier’s branded mug and places it on the desk, that alone is unlikely to make a huge difference. If the incumbent knows that displacement is hard (because of switching costs tied to “sticky” features), the mere presence of a competitive logo is not likely enough to change pricing.

Now consider how this intersects with the library of networking features that have grown over the past several decades. Each new micro capability adds some value to the network. But that value comes at a cost. First, the explosion of networking knobs has made the network a smidge unwieldy to manage. But beyond that, each feature that is unique to a single vendor reduces the likelihood that a second supplier can compete. Effectively, every time one of these unique features is deployed, the incumbent can rest a little more easily come discount negotiation time.

It’s not surprising that Cisco has had a relative monopoly on the switching space. They have flat out owned the feature set for more than a decade. This has made it exceedingly difficult for any switch vendor to seriously encroach on Cisco’s stronghold. Accordingly, Cisco has kept discounts low and margins high, much to the chagrin of the entire market.

Enter Arista.

As Arista prepares for their IPO, it seems clear that they have reached some sort of escape velocity. Using price (merchant silicon) and software (EOS) as their primary differentiators, they have successfully built a beachhead around financial services accounts, and used that to push more broadly into the enterprise switching market.

As Arista continues their assault on enterprise switching, they are beginning to take advantage of the dual vendor strategies in the largest buyers. If you know a company has a dual vendor strategy, you don’t avoid competing with the 800-pound gorilla. Rather, you seek out the gorilla and position yourself as an alternative. If they buy your kit, they can keep price pressure on their incumbent while also establishing a backup plan in case the incumbent stumbles.

The nice thing about this strategy is that you don’t really end up competing head-to-head with Cisco, which means they can’t simply undercut you with a one-time pricing maneuver. This is good for win rates and margins. And over time, every account you establish a beachhead in provides an opportunity for future growth.

Essentially, by being a viable alternative to Cisco’s legacy switching products, Arista has established a strong presence.

Enter ACI.

Everywhere a large Cisco legacy deployment exists, Arista will come beating on the door. Where there are dual vendor strategies, this will pay off. But what happens if Cisco aggressively swaps out those legacy environments for their next-generation ACI solution?

Cisco sees the same opportunity that Arista does in every sizable legacy deployment. Where there are ancient solutions, there are also opportunities to upgrade. What happens if Cisco gets to these opportunities before Arista does?

Basically, what Cisco ends up doing is replacing legacy with ACI. If that company is employing a dual vendor strategy, this means that they don’t need an alternative to legacy networking anymore. If they are to keep pricing pressure high, they need to successfully deploy an alternative to ACI.

Obviously a move like this favors the cadre of SDN companies built around applications. Reinventing a cheaper, faster version of legacy networking is less relevant than creating solutions that handle applications and policy.

The implications here are interesting. First, where dual vendor strategy was a meaningful contributor to success, the dynamics clearly change. To impact pricing in a dual vendor environment, the architectures have to be at least somewhat conceptually equivalent. Legacy architectures don’t provide leverage against ACI. This gives Cisco some headroom while removing some of the pricing leverage that their challengers have been taking advantage of.

Second, this means that companies embarking on a dual vendor strategy need to have two vendors for both their legacy and their application-centric replacement. Minimally, this means buyers looking at Cisco’s ACI need to plan up front how a shift in architectures impacts their dual vendor strategy. It could change design, evaluation, and purchase.

From a market perspective, the impacts could be profound. Arista appears poised to be the second supplier of Cisco Classic architectures. Most markets have a dominant incumbent and a strong challenger. It could be that as Arista steps into that role, Cisco ends up changing the architecture. If their ACI initiative is successful, this could cleave the market into two: legacy and application-oriented, which would open the market to a second (though not necessarily different) challenger.

Oddly enough, this could mean that companies hoping to take on the 800-poiund gorilla will be rooting for their success.

[Today’s fun fact: A duck's quack doesn't echo, and no one knows why. A duck’s quack doesn’t echo, and no one knows why.]

The post Cisco Classic, Cisco ACI, Arista, and Dual Vendor Strategies appeared first on Plexxi.

Read the original blog entry...

More Stories By Michael Bushong

The best marketing efforts leverage deep technology understanding with a highly-approachable means of communicating. Plexxi's Vice President of Marketing Michael Bushong has acquired these skills having spent 12 years at Juniper Networks where he led product management, product strategy and product marketing organizations for Juniper's flagship operating system, Junos. Michael spent the last several years at Juniper leading their SDN efforts across both service provider and enterprise markets. Prior to Juniper, Michael spent time at database supplier Sybase, and ASIC design tool companies Synopsis and Magma Design Automation. Michael's undergraduate work at the University of California Berkeley in advanced fluid mechanics and heat transfer lend new meaning to the marketing phrase "This isn't rocket science."

Cloud Expo Breaking News
Cloud Computing is evolving into a Big Three of Amazon Web Services, Google Cloud, and Microsoft Azure. Cloud 360: Multi-Cloud Bootcamp, being held Nov 4–5, 2014, in conjunction with 15th Cloud Expo in Santa Clara, CA, delivers a real-world demonstration of how to deploy and configure a scalable and available web application on all three platforms. The Cloud 360 Bootcamp, led by Janakiram MSV, an analyst with Gigaom Research, is the first bootcamp that introduces the core concepts of Infrastructure as a Service (IaaS) based on the workings of the Big Three platforms – Amazon EC2, Google Compute Engine, and Azure VMs. Bootcamp attendees will get to see the big picture and also receive the knowledge needed to make the best cloud decisions for their business applications and entire enterprise IT organization.
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at 15th Internet of @ThingsExpo, Chad Jones, Vice President, Product Strategy of LogMeIn's Xively IoT Platform, will show you how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
“Distrix fits into the overall cloud and IoT model around software-defined networking. There’s a broad category around software-defined networking that’s focused on data center, and we focus on the WAN,” explained Jay Friedman, President of Distrix, in this SYS-CON.tv interview at the Internet of @ThingsExpo, held June 10-12, 2014, at the Javits Center in New York City. Internet of @ThingsExpo 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading IoT industry players in the world.
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
“The Internet of Things is a wave that has arrived and it’s growing really fast. The concern at Aria Systems is making sure that people understand the ramifications of their attempts to monetize whatever it is they build on the Internet of Things," explained C Brendan O’Brien, Co-founder and Chief Architect at Aria Systems, in this SYS-CON.tv interview at the Internet of @ThingsExpo, held June 10-12, 2014, at the Javits Center in New York City. Internet of @ThingsExpo 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading IoT industry players in the world.
Cloud computing started a technology revolution; now DevOps is driving that revolution forward. By enabling new approaches to service delivery, cloud and DevOps together are delivering even greater speed, agility, and efficiency. No wonder leading innovators are adopting DevOps and cloud together! In his session at DevOps Summit, Andi Mann, Vice President of Strategic Solutions at CA Technologies, will explore the synergies in these two approaches, with practical tips, techniques, research data, war stories, case studies, and recommendations.
After a couple of false starts, cloud-based desktop solutions are picking up steam, driven by trends such as BYOD and pervasive high-speed connectivity. In his session at 15th Cloud Expo, Seth Bostock, CEO of IndependenceIT, cuts through the hype and the acronyms, and discusses the emergence of full-featured cloud workspaces that do for the desktop what cloud infrastructure did for the server. He’ll discuss VDI vs DaaS, implementation strategies and evaluation criteria.
The Internet of Things is a natural complement to the cloud and related technologies such as Big Data, analytics, and mobility. In his session at Internet of @ThingsExpo, Joe Weinman will lay out four generic strategies – digital disciplines – to exploit emerging digital technologies for strategic advantage. Joe Weinman has held executive leadership positions at Bell Labs, AT&T, Hewlett-Packard, and Telx, in areas such as corporate strategy, business development, product management, operations, and R&D.
SYS-CON Events announced today that DevOps.com has been named “Media Sponsor” of SYS-CON's “DevOps Summit at Cloud Expo,” which will take place on June 10–12, 2014, at the Javits Center in New York City, New York. DevOps.com is where the world meets DevOps. It is the largest collection of original content relating to DevOps on the web today Featuring up-to-the-minute news, feature stories, blogs, bylined articles and more, DevOps.com is where the thought leaders of the DevOps movement make their ideas known.
There are 182 billion emails sent every day, generating a lot of data about how recipients and ISPs respond. Many marketers take a more-is-better approach to stats, preferring to have the ability to slice and dice their email lists based numerous arbitrary stats. However, fundamentally what really matters is whether or not sending an email to a particular recipient will generate value. Data Scientists can design high-level insights such as engagement prediction models and content clusters that allow marketers to cut through the noise and design their campaigns around strong, predictive signals, rather than arbitrary statistics. SendGrid sends up to half a billion emails a day for customers such as Pinterest and GitHub. All this email adds up to more text than produced in the entire twitterverse. We track events like clicks, opens and deliveries to help improve deliverability for our customers – adding up to over 50 billion useful events every month. While SendGrid data covers only abo...
SYS-CON Events announced today that the Web Host Industry Review has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Since 2000, The Web Host Industry Review has made a name for itself as the foremost authority of the Web hosting industry providing reliable, insightful and comprehensive news, reviews and resources to the hosting community. TheWHIR Blogs provides a community of expert industry perspectives. The Web Host Industry Review Magazine also offers a business-minded, issue-driven perspective of interest to executives and decision-makers. WHIR TV offers on demand web hosting video interviews and web hosting video features of the key persons and events of the web hosting industry. WHIR Events brings together like-minded hosting industry professionals and decision-makers in local communities. TheWHIR is an iNET Interactive property.
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An active participant in the technology community, the company has a long history of advocacy, meme-making, and evangelism.
SYS-CON Events announced today that Verizon has been named “Gold Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic networking and advanced communications platforms, Verizon Enterprise Solutions helps open new opportunities around the world for innovation, investment and business transformation. Visit verizonenterprise.com to learn more.
SYS-CON Events announced today that TMCnet has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Technology Marketing Corporation (TMC) is the world's leading business to business and integrated marketing media company, servicing niche markets within the communications and technology industries.
"In my session I spoke about enterprise cloud analytics and how we can leverage analytics as a service," explained Ajay Budhraja, CTO at the Department of Justice, in this SYS-CON.tv interview at the 14th International Cloud Expo®, held June 10-12, 2014, at the Javits Center in New York City. Cloud Expo® 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading Cloud industry players in the world.