Welcome!

SDN Journal Authors: Liz McMillan, Hollis Tibbetts, Vinod Mohan, Chris Colosimo, Jason Bloomberg

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
This talk centers around how to automate best practices in a multi-/hybrid-cloud world based on our work with customers like GE, Discovery Communications and Fannie Mae. Today’s enterprises are reaping the benefits of cloud computing, but also discovering many risks and challenges. In the age of DevOps and the decentralization of IT, it’s easy to over-provision resources, forget that instances are running, or unintentionally expose vulnerabilities.
Everywhere we turn in our industry we can find strong opinions about the direction, type and nature of cloud’s impact on computing and business. Another word that is used in every context in our industry is “hybrid.” In his session at 20th Cloud Expo, Alvaro Gonzalez, Director of Technical, Partner and Field Marketing at Peak 10, will use a combination of a few conceptual props and some research recently commissioned by Peak 10 to offer a real-world consideration of how the various categories of...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
In his opening keynote at 20th Cloud Expo, Michael Maximilien, Research Scientist, Architect, and Engineer at IBM, will motivate why realizing the full potential of the cloud and social data requires artificial intelligence. By mixing Cloud Foundry and the rich set of Watson services, IBM's Bluemix is the best cloud operating system for enterprises today, providing rapid development and deployment of applications that can take advantage of the rich catalog of Watson services to help drive insigh...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
When NSA's digital armory was leaked, it was only a matter of time before the code was morphed into a ransom seeking worm. This talk, designed for C-level attendees, demonstrates a Live Hack of a virtual environment to show the ease in which any average user can leverage these tools and infiltrate their network environment. This session will include an overview of the Shadbrokers NSA leak situation.
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
As enterprise cloud becomes the norm, businesses and government programs must address compounded regulatory compliance related to data privacy and information protection. The most recent, Controlled Unclassified Information and the EU’s GDPR have board level implications and companies still struggle with demonstrating due diligence. Developers and DevOps leaders, as part of the pre-planning process and the associated supply chain, could benefit from updating their code libraries and design by in...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
SYS-CON Events announced today that EARP Integration will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. EARP Integration is a passionate software house. Since its inception in 2009 the company successfully delivers smart solutions for cities and factories that start their digital transformation. EARP provides bespoke solutions like, for example, advanced enterprise portals, business intelligence systems an...
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
SYS-CON Events announced today that Carbonite will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Carbonite protects your entire IT footprint with the right level of protection for each workload, ensuring lower costs and dependable solutions with DoubleTake and Evault.
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs oft...
One of the biggest challenges with adopting a DevOps mentality is: new applications are easily adapted to cloud-native, microservice-based, or containerized architectures - they can be built for them - but old applications need complex refactoring. On the other hand, these new technologies can require relearning or adapting new, oftentimes more complex, methodologies and tools to be ready for production. In his general session at @DevOpsSummit at 20th Cloud Expo, Chris Brown, Solutions Marketi...
SYS-CON Events announced today that Outscale will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outscale's technology makes an automated and adaptable Cloud available to businesses, supporting them in the most complex IT projects while controlling their operational aspects. You boost your IT infrastructure's reactivity, with request responses that only take a few seconds.
As cloud adoption continues to transform business, today's global enterprises are challenged with managing a growing amount of information living outside of the data center. The rapid adoption of IoT and increasingly mobile workforce are exacerbating the problem. Ensuring secure data sharing and efficient backup poses capacity and bandwidth considerations as well as policy and regulatory compliance issues.
DevOps at Cloud Expo – being held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real r...