1. Cisco
Based in: San Jose, California
Worth: $136.2 billion
History: Founded in 1984 by husband-and-wife team Len Bosack and Sandy Lerner and backed by Sequoia Capital. The couple devised a new router that could talk to – and thus link – different network protocols. The rest, as they say, is history.
Management: Led by the redoubtable John Chambers, who joined the company in 1991 as an SVP in sales. Since assuming the role of CEO in 1995, Chambers has taken annual revenues from $1.2 billion to a record $46 billion in 2012.
The Elevator Pitch: The talk here is all about “feet”: Cisco says that you have more chance of sighting Bigfoot than a fully working implementation of SDN and dances around suggestions that SDN will make its high-end routers and switches redundant. But in reality, Chambers is on the back foot. A string of potential future leaders have marched out the door to join SDN startups and Wall Street is worried that gross margins on network equipment, currently running at 60% or more, will take a kicking as the SDN revolution takes hold. Cisco has launched a fleet of SDN products under the Open Network Environment (ONE) brand and pulled together a raft of other equipment vendors under the auspices of the OpenDaylight consortium to develop an open platform for new SDN products. But tellingly, Chambers wants to talk more these days about Cisco’s repositioning as an IT firm.
Verdict: Much scepticism lingers over Cisco’s commitment to and motivation for the OpenDaylight platform, and some carriers privately suggest that the initiative is really aimed at slowing down the development of SDN rather than nurturing it. But the company is hedging its bets with a spin-in called Insieme Networks, which is building big programmable switches and controllers.
2. Juniper Networks
Based in: Sunnyvale, California
Worth: $10.8 billion
History: Founded by Pradeep Sindhu in 1996 with $200,000 of backing from the specialist technology venture capital firm Kleiner, Perkins, Caufield & Byers (and later, a multi-million dollar investment from AT&T).
Management: For much of the eight months that Sindhu was CEO of the newly formed Juniper Networks, he was looking for a replacement. Today, he serves as vice-chairman and CTO, from where he helps drive the company’s SDN strategy. The current CEO, Kevin Johnson, is stepping down, casting some doubts over the management’s future strategy.
The Elevator Pitch: Juniper came very late to the party in articulating its SDN strategy, putting to bed its $176 million acquisition of Contrail last December first. The company originally intended to try to rally the industry around support for an open source system, capable of going head-to-head with those being developed by Cisco and the recently merged VMware/Nicira. But Juniper’s thinking has now “evolved” and it no longer views open source coding as the way forward. While Cisco is staking its future on cutting-edge hardware, Juniper believes the real opportunity lies in developing – and then licensing – software that can cut across four key areas: network management, new valued-added services, the controller plane and the transport plane. Whether that thinking will once again be under review when Johnson’s replacement gets his feet under the table is open to question.
Verdict: Arguably, Juniper has less to lose than Cisco from the commoditisation of network equipment, prompting the company to be not only more open about the potentially disruptive nature of SDN, but also more confident about its own prospects.
3. Nuage Networks
Based in: Mountain View, California
Worth: Unknown, but given that it is already generating revenues, a valuation close to that of Nicira must be credible
History: Nuage was spun out of Alcatel-Lucent in 2012, emerging out of stealth mode earlier this year shortly after Nicira fell to VMware for a boom-time dotcom valuation. Although a stand-alone entity, the unit remains wholly owned by Alcatel-Lucent.
Management: Alcatel-Lucent long-timers Sunil Khandekar and Dimitri Stiliadis co-founded the business in 2011, alongside Suresh Boddapati, who joined from Juniper Networks.
The Elevator Pitch: Given that his company is named after the French word for cloud, you would expect Khandekar to be very hot on virtualised technologies – and you would be right. Conceptually, Nuage sees SDN as a means to bridge the gap between the network and the applications that sit above it, so that telcos can start to unlock the enormous potential of the cloud and devise new services to and from it. Uniquely among the companies mentioned here, Nuage has steered pretty clear of the firestorm raging around which operating system to support as an industry standard. To Khandekar, the language that his computers use to talk to his hardware is immaterial – it is how you harness that software that counts. Nuage’s pitch is to deliver software-based solutions that consume the least amount of network for the shortest time possible and at the cheapest cost.
Verdict: Nuage has already won a lot of friends in the wholesale world because it looks at SDN from a network perspective, rather than from a data centre point of view. And for this reason, it is already beta-testing its solution with a host of carriers, including SFR and Telus, as well as UK-based cloud services provider Exponential-e.
4. VMware
Based in: Palo Alto, California
Worth: $35.2 billion
History: Founded in 1998 by the husband-and-wife team of Diane Greene and Mendel Rosenblum, together with Ed Bugnion. VMware exploded onto the SDN scene late last year with the $1.2 billion acquisition of Nicira. Nicira’s co-founder, Martin Casado was one of the inventors of the SDN operating system OpenFlow.
Management: EMC, the US data storage company which majority owns VMware, parachuted its number two executive, Pat Gelsinger, into the CEO slot last year. Gelsinger replaced Paul Maritz, the man credited with building VMware into one of the biggest tech companies in the enterprise sector. Tellingly, none of Nicira’s former stars have yet surfaced on the VMware executive committee, although Casado now holds the position of chief architect of networking, while Stephen Mullaney – Nicira’s former CEO – now runs the network and security virtualisation group.
The Elevator Pitch: There’s no better way of setting out your stall than by scooping one of the hottest SDN developers in the market from under the nose of your biggest competitor. One year on from VMware’s record acquisition of Nicira, the company is fleshing out its vision of the software defined data centre of the future. VMware built its reputation by virtualising computing power and storage so it was really only a matter of time before it filled in the missing link and turned its attentions to the way digital information is carried around a data centre. The company claims to be deploying one of the largest SDN systems in the industry, as part of a new public cloud offering. The idea is to allow customers to create separate networks for traffic between on-site apps and a database in the cloud.
Based heavily on Nicira’s technology, VMware says that customers will be able to create and configure their own networks however they want, install firewalls and set access policies within the network, and replicate and delete networks within the system.
Verdict: To be sure, Cisco’s half-hearted interest in Nicira during the auction process certainly forced VMware into paying top dollar for a toehold in the networking market. But ask not whether the company paid too much for Nicira, but rather, whether it could have afforded to lose.
5. Big Switch Networks
Based in: Mountain View, California
Worth: At least $200 million
History: Founded in 2010 by Guido Appenzeller – part of the original team at Stanford University that developed the OpenFlow protocol underpinning SDN – and Kyle Forster, a former big hitter at Cisco. The company recently secured a strategic $6.5 million investment from chipmaker Intel to add to $39 million in financing that it raised from Goldman Sachs and Redpoint Ventures (among others) last year.
Management: One of the oldest players in the SDN arena, Appenzeller has built a formidable team around him, including Mansour Karam, the first hire at arch-rival Arista Networks and the man responsible for setting out its SDN strategy, and more recently Prashant Ghandi, who led development of Cisco’s SDN effort.
The Elevator Pitch: “SDN is the most disruptive technology to hit the network industry in more than 20 years,” vows Appenzeller. The brains behind Big Switch’s SDN roadmap is the Big Network Controller, an all-seeing computer that runs on an open source operating system called Floodlight and which can control all aspects of the network, from the way data is shunted from one point to another to far more complex operations such as real-time analytics. Anyone can access Floodlight to develop bolt-on applications, and the company says that the source code was downloaded 10,000 times last year alone. Appenzeller has already launched two apps of his own that can run through the controller: Big Tap, a traffic monitoring tool that can turn capacity up or down according to demand at the touch of a button, and Big Virtual Switch, a tool to help build virtual networks. The company also recently released an open-source version of the software that it uses to direct traffic, called Switch Light. The software is based on the industry-wide OpenFlow operating system.
Verdict: Big Switch is out to prove Cisco’s John Chambers wrong when he claims “history is littered with upstarts that bet against Cisco and failed”. In signing up more than 25 partners and persuading Ghandi – formerly one of Appenzeller’s harshest critics – to jump on board, the company must surely stand a chance.
And five more to watch:
Arista Networks: Arista’s chief technology officer, Andy Bechtolsheim, commands a Steve Jobs-like following in networking circles, and the company, which is run by Cisco veteran Jayshree Ullal – one of Capacity’s top 10 women to watch in wholesale – is on the cusp of great things. The mistake many startups are making, the company says, is to view SDN as a greenfield build when you really need to embrace a whole world of IP. Arista is developing what it calls a multi-path cloud topology that will run on any SDN platform.
Embrane: Funded by Lightspeed Ventures and North Bridge, Embrane specialises in apps to run on software defined networks such as load balancer and firewall solutions. But crucially, Embrane products can run on any existing infrastructure and on any operating platform.
Lyatiss: If you want to know where SDN might eventually lead network design, take a look at Lyatiss, a startup born out of the publicly-funded French National Institute for Research in Computer Science (INRIA). Founder and CEO Pascale Vicat-Blanc sees the application-defined network as a logical extension to SDN and has developed an operating system called CloudWeaver that lets cloud networks talk to one another.
Plexxi: Like Embrane, Plexxi is backed by venture capital firms Lightspeed and North Bridge. Founded in 2010, the Cambridge, Massachusetts-based firm uses software to predict what resources a network will need and then sends that data to bespoke switches that can configure the network accordingly.
PlumGrid: Eschewing OpenFlow, the SDN go-to software platform, the former Cisco engineers behind PlumGrid’s meteoric rise have started from scratch with their own operating system that includes management and troubleshooting apps. Major clients include Arista Networks, which will worry both Cisco and VMware in equal measure.
