In my blog on Monday, I talked about the battle of the two giant IP network equipment vendors, Cisco and Juniper. The two, I said, are battling it out in a sales-driven arena and neither are pushing all the buttons they could on the marketing side. That raises a question, which is whether a newcomer could step up, and use marketing techniques the others haven’t fully exploited to gain a lot of traction. Is the “next Cisco” really a possibility?
Obviously, newcomers have succeeded in network equipment in the past. Cisco and Juniper both had to claw their ways into a strong position in the space, battling incumbent vendors. In Juniper’s case, it was Cisco. In Cisco’s case, you might be surprised to learn the incumbent was IBM. In both cases, the wannabe vendor used a specific and easily understood criticism of the incumbent, then leveraged it.
Cisco’s rise came about because IBM’s network technology was simply priced too high. Interestingly, a part of that was due to the fact that IBM’s technology (System Network Architecture or SNA, if you’re interested) was inherently highly secure and reliable, which the market of the time needed but the emerging Internet didn’t. IP routing was a heck of a lot cheaper, and that generated a business shift to IP. That, and the growth of the Internet, then propelled Cisco forward.
IBM SNA was proprietary technology, at least in that it wasn’t based on formal standards. Cisco’s IP stuff was initially based in part on the same sort of thing, and Juniper entered the market by capitalizing on the fact that there was an increased demand for standards-based networking. Juniper was particularly effective in promoting its technology to the service providers, and from there they expanded their reach.
So can there be a newcomer, a “unicorn” vendor that could threaten to at least steal some market share from these giants? A decade or two ago, there was strong interest in the VC space to come up with “the next Cisco”, largely centered in startups in the Boston area, but it didn’t generate anything notable. More recently, competition to our two network giants has come from something more diffuse than unicorn-like, the “white box” or “open-model” approach.
You could say that this is a further step along the “standards” path, but unlike the old standards differentiator, open-model networking is attractive even to some enterprises. There’s been router software available from a variety of sources, some open and some licensed, for well over a decade. When custom chips capable of pushing a lot of packets came along (Broadcom is the leader in this space), and software-defined networking (SDN) took shape, the result was a push for open hardware that could be married to the router software.
The question is whether “open-model” or “white-box” presents a compelling value of the sort that launched Cisco and Juniper. You can argue that history says “No!” because white-box router technology, or white-box technology in general, hasn’t taken off in the enterprise space and has met with limited success in the service provider market (more on that below). Why? Two reasons, one practical and one subjective.
The practical reason is the buyers’ concerns about integration, which operate at two levels. First, a white box is a space heater without software, and if the new router model is really open, the software has to come from any source, which means integration is important. As it happens, nobody wants to do that or pay for someone else to do it. Second, networking today is more mature than it was when Cisco and Juniper launched, and a mature market has a large base of devices not fully depreciated. A new source means integrating with a mass of stuff already in use, and that’s a headache too.
Maybe a different tagline is needed here, and there are a couple of ideas floating out there. One is from startup/unicorn DriveNets, who offers the “Network Cloud” and the other from Juniper, with “Cloud Metro”. It doesn’t take a PR genius to notice that “cloud” is a common theme, and it’s a smart one because a great majority of both enterprise and service provider network planners say that the cloud is impacting networks and network infrastructure.
DriveNets is a disaggregated or cluster-router model, where a collection of devices connected in a mesh becomes in effect one high-capacity device or even a series of virtual devices hosted on a single cluster. DriveNets is the most successful of the Cisco/Juniper IP infrastructure competitors, but the company has focused on the IP core network, in no small part because AT&T played a big role in getting the company launched. The problems with this are 1) that there aren’t as many core devices as devices at other network levels, and 2) the core is arguably moving toward agile optics. Still, for the service provider space, DriveNets is a real contender.
The question of how many routers a newcomer could sell raises the other tagline, “Cloud Metro” and the topic of metro networks overall. Metro is (as I’ve noted in past blogs) a kind of sweet spot for service provider networking. There are a lot of potential metro concentration points, as many as a hundred thousand worldwide. Each of these serves enough customers to make it a viable point for service feature hosting, edge computing, and other interesting stuff. Juniper grabbed the notion first almost two years ago, but hasn’t developed it as much as they could have. DriveNets’ architecture would also be a great fit for metro, but they’ve not really exploited that capability either. Could another startup or even a smaller vendor take advantage of that lack of metro focus? Perhaps.
The problem is that “metro” is a service provider infrastructure element, and there’s increased market interest in enterprise-compatible products. The service provider sales cycle is between 10 and 19 months at the moment (up from 9 to 14 months, where it was largely stuck for most of the last two decades), where the average enterprise network deal is done in between 4 and 9 months. Enterprises, though, are focusing network infrastructure-building on the data center (switching rather than routing), security, and VPN edge technology. Security is the easiest of the three to sell.
So who’s the most important competitor to Cisco and Juniper? Given the need for a strong enterprise focus, probably the almost-finalized Broadcom/VMware combination. Broadcom has the chips. VMware has a nice inventory of virtual-network technology that plays into the way enterprise networking is moving. They also have a significant foothold in enterprise data centers, which is critical. Their biggest handicap here is a combination of positioning and organization, and the two are likely related.
You’re probably not surprised that I’d criticize their positioning; whose don’t I criticize, after all? Here, though, the challenge is that there are some significant mindset changes needed to promote VMware’s position, and those can only come about through some really aggressive marketing. VMware doesn’t have that history, and they have a big positioning advantage in multi-cloud and cloud portability they could leverage.
VMware’s enterprise networking position is definitely cloud-centric, which is a good thing. They have a strong virtual-network story for the data center (NSX) and in SD-WAN, and they’re starting to integrate the two. Their security portfolio is good, but they lack the security focus of vendors like Cisco and Juniper, and even their virtual-network cloud stuff gets a bit blurred in positioning relative to vSphere.
VMware isn’t going to steal routers’ thunder, but for the enterprise a router is increasingly just an edge device, and if MPLS VPNs do fall out of favor because of cloud networks and SD-WAN, the majority of them would disappear. That means that the enterprise network might increasingly be moving to appliances and hosted instances, which is VMware’s strength., It’s hard to say how quickly this all could happen, but if I’m correct in my views, I think we’ll see clear signs by the end of 2023. Meanwhile, Happy Thanksgiving!