The story that Big Switch is being acquired by Arista is just a story…for now. The story that there’s been a lot of M&A dialog around the company is pretty clearly true, and it may well be that it’s the interest overall that makes this important, not who ends up doing the deal. Big Switch was the premier SDN controller company, so does this mean SDN is back, or what? Is the interest in Big Switch itself an indication of a “big switch?”
Like a lot of startups, Big Switch rode an early hype wave (SDN, in their case) and found that the wave turned into a ripple before they could get an exit deal. Like a lot of networking startups, and even public companies, looking for a new lease on life, Big Switch turned to hybrid cloud. OK, you could say this was jumping from a hype ripple to a new hype wave, but there is some value underneath the move, and that’s probably why there’s broad interest in buying Big Switch.
I mentioned in my last blog that networks were largely divided into “interior” and “exterior” pieces. Interior networks don’t have to worry about connecting users; they funnel traffic between aggregated sources and data center or cloud hosting points. Even, in an increasing number of cases, among those cloud hosting points. The delineation between the two kinds of networks is getting sharper because of hybrid cloud, and that’s important.
A VPN connects sites, some number of which are data centers and some users. As the front-end piece of applications migrate to the public cloud (creating the most common example of a “hybrid cloud”), the site association and user individuality of the traffic disappears. The cloud front-end hands-off traffic to the data center back end through a small number of portals. In addition, the cloud front-end starts to become more interconnected; think microservices and service mesh. The result is what we could call a “cloud virtual network”, except that in most cases the largest pool of network equipment in it is in the data center, the switches.
Can this somehow tie to SDN? Well, the notion of SDN as a universal way of separating the control and data planes of a network and substituting central route control for adaptive route control, hasn’t shaken the world. One big reason is that scaling this to the Internet was always questionable. SDN and OpenFlow work fine in a switching mission, though, and software-defined switching has gotten decent traction. If a hybrid cloud is a kind of huge, cloud-and-data-center-resident, virtual data center, then why not have a virtual data center network that sort of looks like SDN? Which is what Big Switch had evolved to with its hybrid cloud positioning.
Juniper was/is a prospective buyer for Big Switch according to the rumor mill. Juniper’s quarter shows that while routing is still the biggest source of revenue, switching is the biggest source of revenue growth. The VPN and the consolidation of IP VPN and Internet applications onto the same infrastructure, have reduced router usage. Could the notion of a cloud virtual network reduce it further, meaning push more and more traffic to “interior” paths where SDN-like technology would be very practical?
We’re not done stirring the brew of the cloud virtual network, though. Remember that Cisco’s recent announcements seem to have opened the door for a kind of disaggregated vision of a network device, something that involved custom silicon (and P4 drivers to support it), software, and a hardware platform that could be a white box or a proprietary device. It would seem that Cisco sees that same shift of emphasis to switching, and if the data center is spreading to the cloud, then switching does the same thing.
The question this raises is whether the cloud virtual network of the future is evolving from the cloud side of the hybrid cloud, or from the data center side. Fierce Telecom’s article says that Arista, Dell, Cisco, Gigamon and Juniper were jousting for Big Switch, which aligns nicely with the rumors I’ve heard. Arista is a “software-driven cloud network” player. Dell is a data center equipment giant. Cisco and Juniper are network vendors repositioning themselves for the switch-dominated future, and Gigamon is a provider of monitoring tools for virtual networks. You can see how Big Switch fits into any of these spaces.
Today, the center of strategic influence in the enterprise is the data center. Network policies are set by data center network policies, for the simple reason that the data center is where the bulk of the capital budget goes. For many enterprises, the only WAN equipment they buy is the edge routers, and these are hardly strategic. All of the hardware vendors in the game to acquire Big Switch are data center equipment giants of some sort. Gigamon is an outlier, a virtual-network play that has perhaps a more natural fit with the notion of the hybrid cloud as a holistic platform and not a data center extension.
Either view has to be solidified; a virtual network is an abstraction for real stuff, not real in and of itself. If the networking industry is shifting focus from VPNs and data center networking to a form of cloud virtual networking, then any player in either the cloud space or the data center switching space is threatened by others who might come up with their own approach, and in doing so own strategic control over buyers. Big Switch could add enough horsepower to any of these vendors’ solutions to give them that strategic edge.
If the Arista story is true, which we probably won’t know till next month, the Big Switch deal is of particular value. Data center switching is the piece of the networking market that’s most difficult in which to offer differentiation, as I pointed out when examining Juniper’s quarterly results. It’s where open-model (white box and open-source software) devices are the most credible competition, as I pointed out when blogging about Cisco’s Silicon One stuff. Arista is the up-and-coming in the space, and can least afford to be swamped by a wave of Cisco- or Juniper-led cloud virtual networking.
The critical piece in this tale, the one that could confound a lot of plans, is the fact that we don’t really know what cloud virtual networking is. Is it something like SDN, grown out of the data center and into the cloud? Is it something like SD-WAN, grown out of the VPN into both cloud and data center? You could play Big Switch’s assets either way, but any of the vendors who don’t get those assets could mount what we could call a “definitional counterplay”, establishing a model of cloud virtual networking through clever positioning and perhaps some open-source elements. The result could undermine the value of Big Switch to whoever gets it.
That risk may be why the value of Big Switch in the deal, rumored at only about two-thirds of what VCs have put into it, is lower than some expected. There’s more to supporting the hybrid cloud than buying “Hybrid Cloud Within!” stickers for your gear and brochures. Our industry tends to shoot their PR bullets before they build their supply lines, and if that’s the case here, then the winner of Big Switch could still end up being the loser.