Welcome!

SDN Journal Authors: TJ Randall, Yeshim Deniz, Liz McMillan, Elizabeth White, 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."

CloudEXPO Stories
DevOps is a world surrounded by information, starting from a single commit and ending in roll out to production. In this talk, I'll introduce you to the world of Taboola DevOps data collection, to better understand what goes on under the hood. The system we've developed in-house helps us collect and analyse the entire DevOps process from the very first commit all the way to production. It provides us a full clear view with a drill-down toolset that helps keep us away from the dark side. Our KPI's moved from being abstracted ideas to data driven goals, which we can measure and act upon. We're living in a data driven world when all business components are based on our clients action and reaction, why not doing the same thing within our DevOps eco-system?
After years of investments and acquisitions, CloudBlue was created with the goal of building the world's only hyperscale digital platform with an increasingly infinite ecosystem and proven go-to-market services. The result? An unmatched platform that helps customers streamline cloud operations, save time and money, and revolutionize their businesses overnight. Today, the platform operates in more than 45 countries and powers more than 200 of the world's largest cloud marketplaces, managing more than 27 million enterprise cloud subscriptions valued at more than $1 billion in revenue.
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, will discuss how to use Kubernetes to setup a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. His expertise is in automating deployment, management, and problem resolution in these environments, allowing his teams to run large transactional applications with high availability and the speed the consumer demands.
Containerized software is riding a wave of growth, according to latest RightScale survey. At Sematext we see this growth trend via our Docker monitoring adoption and via Sematext Docker Agent popularity on Docker Hub, where it crossed 1M+ pulls line. This rapid rise of containers now makes Docker the top DevOps tool among those included in RightScale survey. Overall Docker adoption surged to 35 percent, while Kubernetes adoption doubled, going from 7% in 2016 to 14% percent.
In an age of borderless networks, security for the cloud and security for the corporate network can no longer be separated. Security teams are now presented with the challenge of monitoring and controlling access to these cloud environments, as they represent yet another frontier for cyber-attacks. Complete visibility has never been more important-or more difficult. Powered by AI, Darktrace's Enterprise Immune System technology is the only solution to offer real-time visibility and insight into all parts of a network, regardless of its configuration. By learning a ‘pattern of life' for all networks, devices, and users, Darktrace can detect threats as they arise and autonomously respond in real time - all without impacting server performance.