Welcome!

SDN Journal Authors: Pat Romanski, Sharon Barkai, Adrian Bridgwater, Liz McMillan, Lori MacVittie

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 Latest Stories
With the explosion of the cloud, more businesses are transitioning to a recurring revenue model to generate reliable sales, grow profits, and open new markets. This opportunity requires businesses to get to market quickly with the pricing and packaging options customers want. In addition, you will want to take advantage of the ensuing tidal wave of data to more effectively upsell, cross-sell and manage your customers. All of this is possible, but only with the right approach. At 15th Cloud Expo, Brendan O'Brien, Co-founder at Aria Systems and the inventor of cloud billing panelists, will lead a panel discussion on what it takes to launch and manage a successful recurring revenue business. The panelists will offer their insights about what each department will need to consider, from financial management to line of business and IT. The panelists will also offer examples from their success in recurring revenue with companies such as Audi, Constant Contact, Experian, Pitney-Bowes, Teleko...
Planning scalable environments isn't terribly difficult, but it does require a change of perspective. In his session at 15th Cloud Expo, Phil Jackson, Development Community Advocate for SoftLayer, will broaden your views to think on an Internet scale by dissecting a video publishing application built with The SoftLayer Platform, Message Queuing, Object Storage, and Drupal. By examining a scalable modular application build that can handle unpredictable traffic, attendees will able to grow your development arsenal and pick up a few strategies to apply to your own projects.
Come learn about what you need to consider when moving your data to the cloud. In her session at 15th Cloud Expo, Skyla Loomis, a Program Director of Cloudant Development at Cloudant, will discuss the security, performance, and operational implications of keeping your data on premise, moving it to the cloud, or taking a hybrid approach. She will use real customer examples to illustrate the tradeoffs, key decision points, and how to be successful with a cloud or hybrid cloud solution.
The cloud provides an easy onramp to building and deploying Big Data solutions. Transitioning from initial deployment to large-scale, highly performant operations may not be as easy. In his session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, will discuss the benefits, weaknesses, and performance characteristics of public and bare metal cloud deployments that can help you make the right decisions.
Over the last few years the healthcare ecosystem has revolved around innovations in Electronic Health Record (HER) based systems. This evolution has helped us achieve much desired interoperability. Now the focus is shifting to other equally important aspects – scalability and performance. While applying cloud computing environments to the EHR systems, a special consideration needs to be given to the cloud enablement of Veterans Health Information Systems and Technology Architecture (VistA), i.e., the largest single medical system in the United States.
Cloud and Big Data present unique dilemmas: embracing the benefits of these new technologies while maintaining the security of your organization’s assets. When an outside party owns, controls and manages your infrastructure and computational resources, how can you be assured that sensitive data remains private and secure? How do you best protect data in mixed use cloud and big data infrastructure sets? Can you still satisfy the full range of reporting, compliance and regulatory requirements? In his session at 15th Cloud Expo, Derek Tumulak, Vice President of Product Management at Vormetric, will discuss how to address data security in cloud and Big Data environments so that your organization isn’t next week’s data breach headline.
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.
Is your organization struggling to deal with skyrocketing volumes of digital assets? The amount of data is growing exponentially and organizations are having a hard time managing this growth. In his session at 15th Cloud Expo, Amar Kapadia, Senior Director of Open Cloud Strategy at Seagate, will walk through the essential considerations when developing a cloud storage strategy. In this discussion, you will understand the challenges IT is facing, why companies need to move to cloud, and how the right cloud model can help your business economically overcome the data struggle.
If cloud computing benefits are so clear, why have so few enterprises migrated their mission-critical apps? The answer is often inertia and FUD. No one ever got fired for not moving to the cloud – not yet. In his session at 15th Cloud Expo, Michael Hoch, SVP, Cloud Advisory Service at Virtustream, will discuss the six key steps to justify and execute your MCA cloud migration.
The 16th International Cloud Expo announces that its Call for Papers is now open. 16th International Cloud Expo, to be held June 9–11, 2015, at the Javits Center in New York City brings together Cloud Computing, APM, APIs, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
Most of today’s hardware manufacturers are building servers with at least one SATA Port, but not every systems engineer utilizes them. This is considered a loss in the game of maximizing potential storage space in a fixed unit. The SATADOM Series was created by Innodisk as a high-performance, small form factor boot drive with low power consumption to be plugged into the unused SATA port on your server board as an alternative to hard drive or USB boot-up. Built for 1U systems, this powerful device is smaller than a one dollar coin, and frees up otherwise dead space on your motherboard. To meet the requirements of tomorrow’s cloud hardware, Innodisk invested internal R&D resources to develop our SATA III series of products. The SATA III SATADOM boasts 500/180MBs R/W Speeds respectively, or double R/W Speed of SATA II products.
In today's application economy, enterprise organizations realize that it's their applications that are the heart and soul of their business. If their application users have a bad experience, their revenue and reputation are at stake. In his session at 15th Cloud Expo, Anand Akela, Senior Director of Product Marketing for Application Performance Management at CA Technologies, will discuss how a user-centric Application Performance Management solution can help inspire your users with every application transaction.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at 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. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridstore delivers vmOptimized™ Storage that self-optimizes to each application or VM across both virtual and physical environments. Leveraging a grid architecture, Gridstore delivers the first end-to-end storage QoS to ensure the most important App or VM performance is never compromised. The storage grid, that uses Gridstore’s performance optimized nodes or capacity optimized nodes, starts with as few a...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, has been named “Bronze 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. Cloudian is a Foster City, Calif.-based software company specializing in cloud storage. Cloudian HyperStore® is an S3-compatible cloud object storage platform that enables service providers and enterprises to build reliable, affordable and scalable hybrid cloud storage solutions. Cloudian actively partners with leading cloud computing environments including Amazon Web Services, Citrix Cloud Platform, Apache CloudStack, OpenStack and the vast ecosystem of S3 compatible tools and applications. Cloudian's customers include Vodafone, Nextel, NTT, Nifty, and LunaCloud. The company has additional offices in China and Japan.
SYS-CON Events announced today that TechXtend (formerly Programmer’s Paradise), a leading value-added provider of server and storage virtualization, and r-evolution will exhibit at 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. TechXtend (formerly Programmer’s Paradise) is a leading value-added provider of software, systems and solutions for corporations, government organizations, and academic institutions across the United States and Canada. TechXtend is the Exclusive Reseller in the United States for r-evolution