Click here to close now.

Welcome!

SDN Journal Authors: Roger Strukhoff, Lori MacVittie, Carmen Gonzalez, Michael Jannery, Mat Mathews

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
Business and IT leaders today need better application delivery capabilities to support critical new innovation. But how often do you hear objections to improving application delivery like, “I can harden it against attack, but not on this timeline”; “I can make it better, but it will cost more”; “I can deliver faster, but not with these specs”; or “I can stay strong on cost control, but quality will suffer”? In the new application economy, these tradeoffs are no longer acceptable. Customers will ...
The free version of KEMP Technologies' LoadMaster™ application load balancer is now available for unlimited use, making it easy for IT developers and open source technology users to benefit from all the features of a full commercial-grade product at no cost. It can be downloaded at FreeLoadBalancer.com. Load balancing, security and traffic optimization are all key enablers for application performance and functionality. Without these, application services will not perform as expected or have the...
Hadoop as a Service (as offered by handful of niche vendors now) is a cloud computing solution that makes medium and large-scale data processing accessible, easy, fast and inexpensive. In his session at Big Data Expo, Kumar Ramamurthy, Vice President and Chief Technologist, EIM & Big Data, at Virtusa, will discuss how this is achieved by eliminating the operational challenges of running Hadoop, so one can focus on business growth. The fragmented Hadoop distribution world and various PaaS soluti...
SYS-CON Events announced today that Dyn, the worldwide leader in Internet Performance, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Dyn is a cloud-based Internet Performance company. Dyn helps companies monitor, control, and optimize online infrastructure for an exceptional end-user experience. Through a world-class network and unrivaled, objective intelligence into Internet conditions, Dyn ensures...
As organizations shift toward IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection &E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his session at 16th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Partnerships, will disc...
VictorOps is making on-call suck less with the only collaborative alert management platform on the market. With easy on-call scheduling management, a real-time incident timeline that gives you contextual relevance around your alerts and powerful reporting features that make post-mortems more effective, VictorOps helps your IT/DevOps team solve problems faster.
Skytap Inc., has appointed David Frost as vice president of professional services. David joins Skytap from Deloitte Consulting where he served as Managing Director leading SAP, Cloud, and Advanced Technology Services. At Skytap, David will head the company's professional services organization, and spearhead a new consulting practice that will guide IT organizations through the adoption of DevOps best practices. David's appointment comes on the heels of Skytap's recent $35 million Series D fundin...
Cloud data governance was previously an avoided function when cloud deployments were relatively small. With the rapid adoption in public cloud – both rogue and sanctioned, it’s not uncommon to find regulated data dumped into public cloud and unprotected. This is why enterprises and cloud providers alike need to embrace a cloud data governance function and map policies, processes and technology controls accordingly. In her session at 15th Cloud Expo, Evelyn de Souza, Data Privacy and Compliance...
Even as cloud and managed services grow increasingly central to business strategy and performance, challenges remain. The biggest sticking point for companies seeking to capitalize on the cloud is data security. Keeping data safe is an issue in any computing environment, and it has been a focus since the earliest days of the cloud revolution. Understandably so: a lot can go wrong when you allow valuable information to live outside the firewall. Recent revelations about government snooping, along...
Platform-as-a-Service (PaaS) is a technology designed to make DevOps easier and allow developers to focus on application development. The PaaS takes care of provisioning, scaling, HA, and other cloud management aspects. Apache Stratos is a PaaS codebase developed in Apache and designed to create a highly productive developer environment while also supporting powerful deployment options. Integration with the Docker platform, CoreOS Linux distribution, and Kubernetes container management system ...
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, will discuss why containers should be paired with new architectural practices such as microservices ra...
Roberto Medrano, Executive Vice President at SOA Software, had reached 30,000 page views on his home page - http://RobertoMedrano.SYS-CON.com/ - on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, and SOA World Magazine. He is a recognized executive in the information technology fields of SOA, internet security, governance, and compliance. He has extensive experience with both start-ups and large companies, having been ...
The Workspace-as-a-Service (WaaS) market will grow to $6.4B by 2018. In his session at 16th Cloud Expo, Seth Bostock, CEO of IndependenceIT, will begin by walking the audience through the evolution of Workspace as-a-Service, where it is now vs. where it going. To look beyond the desktop we must understand exactly what WaaS is, who the users are, and where it is going in the future. IT departments, ISVs and service providers must look to workflow and automation capabilities to adapt to growing ...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, will analyze a range of cloud offerings (IaaS, PaaS, SaaS) and discuss the benefits/challenges of migrating to each of...
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focu...
Red Hat has launched the Red Hat Cloud Innovation Practice, a new global team of experts that will assist companies with more quickly on-ramping to the cloud. They will do this by providing solutions and services such as validated designs with reference architectures and agile methodology consulting, training, and support. The Red Hat Cloud Innovation Practice is born out of the integration of technology and engineering expertise gained through the company’s 2014 acquisitions of leading Ceph s...
Operational Hadoop and the Lambda Architecture for Streaming Data Apache Hadoop is emerging as a distributed platform for handling large and fast incoming streams of data. Predictive maintenance, supply chain optimization, and Internet-of-Things analysis are examples where Hadoop provides the scalable storage, processing, and analytics platform to gain meaningful insights from granular data that is typically only valuable from a large-scale, aggregate view. One architecture useful for capturing...
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes ...
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., showed what is needed to leverage the IoT to transform your business. ...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, it is now feasible to create a rich desktop and tuned mobile experience with a single codebase, without compromising performance or usability.