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There Is A Chase After The Containment, And The Switch Market Leader Cisco Under The White Box FROM ZKTEL

- Jul 30, 2018 -

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In the field of switches, Cisco is the absolute "leading boss" and has always firmly occupied the first share of the switch market. But the rumors that Amazon AWS was considering selling its network switches to corporate customers at a low price some time ago caused the stocks of Cisco and other network equipment manufacturers to fall, and caused widespread discussions in the industry circle. Although Amazon later denied the authenticity of this rumor, for Cisco, the variables and challenges of the switch market can not be underestimated.


According to the Magic Quadrant of the 2018 Data Center Network released by Gartner on July 11, Cisco is still the leader in this field, but there are many rising stars. Arista has performed well in the leadership quadrant after 2017, and Juniper has been more prominent in the leadership quadrant. Close to Arista. Although Cisco is ranked first, other homes are not weak.


On the other hand, according to market research firm IDC 2017, in the first quarter of 2018, Cisco's Ethernet switch revenue increased by 7.6% year-on-year, with a market share of 53.4%, down from 55.0% in the first quarter of 2017, also lower than 58.9% in the first quarter of 2016. Arista performed well in the first quarter of 2018, with its Ethernet switch revenue up 39.9% year-on-year and a market share of 6.5%, up from 5.1% in the first quarter of 2017. Juniper's Ethernet switch revenue fell 4.8% year-on-year in the first quarter of 2018, with a market share of 3.7%, compared to 4.3% in the first quarter of 2017.


Cisco is the king of the network, no doubt. However, from the above news and IDC related data, many people are also curious, what new changes in the field of network switches? What is the reason for the decline in the market share of Cisco switches? What is Cisco's response? This article has collected some relevant reports and materials.


Environment: the pattern under the white box switch


Since the advent of software-defined networking (SDN), the demand for white-box switches has increased, especially for ultra-large-scale cloud service providers. Self-built cloud data centers will require a large number of white-box switches. According to statistics, more than 90% of companies in the future will try to try SDN.


The rise of white box switches


Unlike traditional switches, white-box switches decouple the hardware and software of the switch. Users can purchase only the hardware of the switch and then pair it with third-party operating system software as needed, giving users the flexibility to design and configure the network. In addition, because the operating system software is not installed on the white box switch, its price is much cheaper than the traditional switch. Not only that, most white-box switches have a relatively high port density, which is very suitable for high-density network deployment of large enterprises. For example, Facebook and Google with ultra-large data centers use white-box switches to deploy networks. Users can customize the white box switch and select the appropriate operating system software according to the specific network requirements.


In short, the advantages of white box switches are as follows:


High flexibility because their primary function is to meet data needs

Helps increase efficiency and productivity for your business

Lower cost

The white box switch is an open network switch, and the SDN controller is responsible for the centralized network.

Operator turns to white box


In view of the advantages of white boxes, telecom operators like AT&T, Verizon and Orange have focused their attention on SDN and white-box switches, which have partially changed the current switch market and undoubtedly affected Cisco switches.


According to reports, in December 2017, the Open Network Automation Platform (ONAP) released the first version of Amsterdam, and AT&T, which contributed the most to ONAP, switched the existing 100,000 traditional switches worldwide to white-box switches. In March of last year, AT&T successfully completed the white box switch field deployment test and said that they have seen great potential in achieving innovation, reducing costs and meeting customer needs. AT&T officials said they are exploring white-box options for other network devices. They are testing the replacement of dedicated routing devices in the base station with white-box devices, which can significantly increase base station capacity and keep costs stable. Vendors that provide white-box switches for AT&T include Barefoot Networks, Broadcom, Delta Electronics, Edgecore Networks, Intel and SanpRoute. Although it is not known that AT&T will use white-box switches and operating systems on large-scale live networks, the choice of this Tier 1 operator has the greatest impact on equipment manufacturers such as Cisco, Juniper and Arista.


AT&T is not the only telecommunications company that pursues a software-centric infrastructure. Telecommunications companies such as Verizon and Orange are also working on projects for many years to create a wide range of virtual network environments. At the 2017 NFV World Summit, Verizo said it will launch an open source white-box solution that runs services from multiple vendors.


White box switch OS startup company


The emergence of white-box switches has also brought in some startups that make white-box switch systems, such as Arrcus. In July of this year, a company called Arrcus started to stand out and launched the ArcOS system. This is a standalone, hardware-independent network operating system for white-box systems that is designed for large-scale scalable infrastructure for service providers and cloud computing platforms. The company's new ArcOS network operating system has been ported to Broadcom's StrataDNX Jericho+ and StrataXGS Trident 3 switching chip platforms. ArcOS's goal is to challenge three leading vertically integrated network providers, specifically Cisco, Juniper Networks and Arista, while offering customers the freedom to choose between separate software and hardware. But it seems that this company's software has just begun, far less mature than RTBrick/FRR routing.


As early as the beginning of SDN/NFV three years ago, Dell’Oro data from well-known market research firm showed that the global Ethernet switch market in the first quarter of the year was reduced by $1 billion. Infonetics research also showed that in the first quarter, procurement caused by SDN and NFV (network function virtualization) "hesitated", slowing the cost of carrier routers and switches. Undoubtedly, this signal also indicates that with the advancement and maturity of SDN/NFV, the changes in the industrial chain pattern brought about by white boxing are further intensifying.


Opponent: Juniper, Arista's differentiated products


As mentioned earlier, Cisco's share in the switch market is declining. Juniper and Arista, who are players in the weight of the network switch market, are active in the market. What advantages do the two switches have compared with Cisco?


Juniper product advantages


Juniper focuses on service providers. They also have a reasonable number of data center switches. Juniper has products that meet the needs of enterprise networks. In addition, corporate networks are increasingly important, which will drive some Fortune 500 companies to become their own customers.


Juniper switches use a single operating system to reduce operating expenses because a customer's network team only needs to know about JUNOS and then support all devices from firewalls, switches, and routers. Compared to Cisco, the single-code version is a competitive advantage for Juniper because Cisco has to support 100 branches of IOS and other IOS styles. This means that Juniper has less development costs per feature than Cisco.


In essence, Juniper said that by migrating to the Juniper/JUSNOS environment, customers can reduce licensing costs, improve operational efficiency, have the most reliable modular architecture, and achieve product levels that can reach the level of a large company like Cisco. . Technically, Juniper's JUNOS software is more logically laid out than Cisco's IOS. JUNOS also separates the forwarding plane from the control plane.


Arista product advantage


Arista focuses on the data center. They have developed a variety of switches based on the latest commercial ASICs. Arista's transparency to platform features and their roadmaps is very high. Arista doesn't have its own solution, but their operating system runs very well on industry standard methods. In addition, their switches can quickly run with other NOS, making their integration easier.


In addition, analysts pointed out that Arista's focus on software enables its data center customers to use inexpensive "commercial chips" (also known as off-the-shelf chips) and components from low-cost Asian suppliers. This allows Arista to make switches using the latest hardware components and then program with its EOS operating system. The cost-effectiveness of software-defined hardware is a successful formula, given that the data center contains a large number of switches for connecting servers and other data centers. Cisco "cannot match," said Needham analyst Alex Henderson.


Cisco is currently ranked first in Ethernet switches, and Cisco's advantages are simplified and versatile solutions compared to other Ethernet switches. The downside is the high cost of maintenance and the slow pace of patches, a top commentator said.


Response: Cisco's "soft and hard separation" strategy


For the arrival of the white-box era, Cisco, the giant of traditional switches, has also taken some countermeasures. In 2013, John Chambers, the former chief executive of Cisco, acknowledged that he would face an industry battle in the future, but insisted that his company's approach to architecture would prevail. In 2015, John Chambers believed that the use of Cisco's architecture was more secure, but with the rise of the white-box market, the need for decoupling of hardware and software in the market has increased, and Cisco has not been ignorant.


As early as November 2014, Light Reading revealed that Cisco has reorganized its then 25,000 engineering team into separate hardware and software groups to respond to customer needs. In 2015, former Cisco CEO John Chambers said at the media conference that Cisco is willing to put some software on the white box switch. But John Chambers still predicts that the market will prefer Cisco's approach to selling the entire network - architecture. In fact, Cisco has made it clear that it will value opportunities from the software and services markets. In this respect, it is no different from many other traditional hardware vendors in terms of development pressure. But the power of the white box has created enormous uncertainty about its future status. In 2017, Cisco Chief Financial Officer Kelly Kramer said in mid-February "I am very pleased that we have made progress in the business transformation of software and recurring revenue."


In 2017, according to Unidentified reports from The Information and other companies, Cisco plans to separate the software currently bundled with its network devices. The software will be packaged as a stand-alone operating system, code-named "Lindt," that runs on both general-purpose and white-box servers instead of Cisco-specific chips and proprietary hardware.


In March 2018, Cisco announced that it would separate its router and switch software from the hardware that hosts it. Switchzilla emerged for the first time in the new software-definition world with its enterprise network computing system, which became a full-fledged NFV at the beginning of last year. Virtualization) solution. At the time, Cisco also launched its first virtual client device product.


Cisco is increasing:


Software-only IOS XR products for service providers;


Enhancements to IOS XE; the Nexus OS is also separated from its hardware.

Cisco said the decomposed IOS XR allows the software to run on Cisco or commercial silicon-based switches and routers, or as a virtualized instance on an x86-based cloud.

In April 2018, Cisco allowed data center customers to run their Nexus operating system (NX-OS) on a third-party switch and use any network operating system. Cisco executives said they are separating NX-OS from Cisco switches to meet the needs of super-expanders and large service providers. The company supports the Switch Abstract Interface (SAI) of the Open Computing Project Specification in its Nexus switches. This means customers can run any network operating system on any Nexus switch that supports SAI. Microsoft and other network-scale customers currently run Microsoft's SONiC operating system on Nexus 9200 and 9300 switches, and customers can run NX-OS on third-party hardware for the first time.


Evaluation: "Threat" Theory and "Indifferent" Theory


The move by Cisco in the face of the white-box era and competition from two other established switch vendors has also sparked arguments from industry insiders, Casemoreh and Cumulus Networks CEO Josh Leslie.


Industry industry Casemore said that Cisco's biggest competitors in the data center area, Arista Networks and Juniper, have adopted hardware and software decoupling, while start-ups such as Cumulus Network and Big Switch Networks have entered the market by offering their own white-box network operating systems. Implementing SAI on Nexus switches gives Cisco the opportunity to steal sales from its rival Arista, which lists Microsoft as one of its largest customers.


"SAI support is something that Cisco can leverage in competition with Arista and other network providers," Casemore said. "This puts Cisco on an equal footing in switch hardware sales. Anything that hurts Arista's prospects is attractive to Cisco because there is a lot of hostility between the two companies."


However, one competitor disagreed with the news of Cisco's separation of hardware and software. Josh Leslie, CEO of Cumulus Networks, described the move as more of a marketing strategy than a strategic change, and pointed out that Cisco is taking measures to decouple switch hardware and software from the current switch market situation.


For Cisco's Nexus and NX-OS data center solutions, Casemore believes that among ultra-large-scale customers, Cisco sells its Nexus switches as a stand-alone product rather than selling NX-OS for third-party hardware to gain greater appeal. . Because many super-scale companies have designed their own streamlined network operating systems. In contrast, NX-OS may be too feature rich. “They found that proprietary software either did much more than they wanted or introduced complexity,” Casemore said. But if the hardware provides them with the required performance, scalability and latency, they will consider Nexus switches, Casemore added, and some organizations, such as large service providers or large enterprises with existing Cisco customers, may consider third parties. NX-OS is used on the switch as a way to explore decomposition.


Cisco executives believe they will succeed through new strategies to provide classified products for data center and service provider customers.


to sum up


From IDC's data, we can clearly see that although Cisco dominates the global switch market, Cisco's market share has decreased year by year from 2016 to 2018. The arrival of the white-box era may be a challenge for Cisco, but it must mean that it will subvert the market of traditional switches? White-box switches are low-cost, but maintenance costs are much higher than traditional switches, and the difficulty of network operation and operation and maintenance will increase significantly in the later stage, which may not be a suitable choice for small and medium-sized enterprises.

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