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SDN Journal: Blog Post

Plexxi Pulse—SDN Goes to College

There is no doubt that software defined networking has the power to improve network performance

There is no doubt that software defined networking has the power to improve network performance on college campuses. University networks demand flexible and reliable solutions and many institutions are turning to SDN to save time, increase efficiency and reduce IT costs. A few of the articles below analyze this very opportunity.

In this week’s PlexxiTube of the week, Dan Bachman answers the commonly asked question: “Is Plexxi’s Big Data fabric for Hadoop only?”

VMware, Cisco Build Rival Data Center Teams

Mitch Wagner wrote a piece on the strategy behind Cisco and VMware’s data center partnerships this week in Light Reading. For the better part of two decades, we have seen the “Best of Breed” era in IT. Solutions have been cobbled together by companies (or integrators) after picking the best of breed solutions for each point component within the broader solution. What VCE and Exadata teach us is that companies will succeed if they handle the integrations for the customer. The first step is to partner, but more consolidation within the in the industry will follow. Over time, we will end up with pre-integrated solutions that are offered by a smaller number of large players. This re-verticalization of IT will fundamentally change how we buy and deploy infrastructure, which will remove some constraints and create additional requirements on the underlying platforms. I don’t think this will play out immediately, but we likely will see a different competitive landscape five years from now after a long period of relative stability.

SDN a Growing Movement on Campus

In a contributed article for EdTech Magazine, Aletha Noonan identified that software defined networking has potential in higher education settings. In my opinion, university environments frequently have a diverse set of traffic types that tend to vary fairly predictably with time of day. During the day, someone in the life sciences department might be doing genome mapping, and then at night all of the students come back to stream content. From a university perspective, not all of this traffic is equal, and an SDN environment allows for dynamic treatment of different types of payloads. Additionally, with fiber connecting buildings, there is a lot of opportunity to do more interesting treatment of traffic between buildings (or in the case of I2, between cooperating campuses). The sweet spot in the .edu space will be how SDN gets married to high-bandwidth transport—together they seem to be a potent combination.

Cisco: Debate Still Raging Over Outlook in Software-Defined Networking

In a post on the Barron’s TechTraderDaily blog, Tiernan Ray covered Cisco’s software defined networking solution. I think that talk like this about SDN, especially as it relates to margins, is a little bit imprecise. Software defined networking is not the reduction of margin because there is functionality in software. The truth is that even the hardware-driven networks that have existed forever get the lion’s share of their functionality via software already. A typical R&D split is on the order of 90-10, with software taking up most of the investment. What we really have is a pricing imbalance. As SDN takes off and hardware becomes less differentiated, we will see a shift in pricing from hardware to software. APIC is notable because it is a software product that gives CSCO another point of monetization. The real threat is not software. What SDN represents is an architectural shift that levels the playing field to some extent. Cisco has built a stronghold with very high barriers to entry because no one can catch up to 30 years of feature development. If there is an architectural reset, competition gets stronger. And competition will drive price down (and likely margin as newer companies could have a lower margin threshold to gain market entry). The question is how will Cisco compete in a more price-sensitive environment? My guess—they squeeze the supply chain first, then go after their resellers. Cisco will pull more of that business in-house, seeing VCE as a successful GTM experiment. When the EMC relationship erodes completely, they replace it with their own business. This leaves partners in a lurch. The biggest resellers will gobble up the smaller resellers at lower margin. Cisco recoups some of that, and they can keep margins buoyed to some extent. There is disruption here. There will be share moves, and the resellers are perhaps in the most vulnerable position.

Cisco Cutting 6,000 Jobs as CEO Forecasts Stagnant Growth

Peter Burrows covered Cisco’s recent earnings report in a piece for Bloomberg this week. This seems to happen every year, and with a company this large, you kind of expect it. It is not uncommon to place bets, see what works, trim, and then double down on the bets that panned out. The comments about margin pressure because of software are probably a bit imprecise. The vast majority of R&D expense is on the software side already—it’s just that the pricing mix favors the hardware. SDN will drive a change in pricing mix. That by itself doesn’t necessarily hurt margins; think of it more as a shell game of where money goes. SDN represents a new way of doing things, which means that Cisco’s strength from 30 years of feature development doesn’t mean as much. It opens the playing field some, and that brings competition. Competition will drive pricing pressure, and with that comes margin pressure. Cisco will combat that by squeezing the supply chain and then gobbling up their resellers’ business. Small and medium-sized resellers will be at risk as Cisco claws some of that business back, using VCE as a blueprint for how to go more direct. Large resellers will consolidate business (at lower margin), and Cisco will mitigate the margin pressure some. The real shift is competition.

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More Stories By Mat Mathews

Visionary solutions are built by visionary leaders. Plexxi co-founder and Vice President of Product Management Mat Mathews has spent 20 years in the networking industry observing, experimenting and ultimately honing his technology vision. The resulting product — a combination of traditional networking, software-defined networking and photonic switching — represents the best of Mat's career experiences. Prior to Plexxi, Mat held VP of Product Management roles at Arbor Networks and Crossbeam Systems. Mat began his career as a software engineer for Wellfleet Communications, building high speed Frame Relay Switches for the carrier market. Mat holds a Bachelors of Science in Computer Systems Engineering from the University of Massachusetts at Amherst.

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