The last 18 months have seen several changes in the networking market. Just in the last year or so, we’ve seen rapid consolidation in the industry: Silver Peak (acquired by HPE), CloudGenix (SDWAN, acquired by Palo Alto Networks), Cumulus (Top of Rack Switching, acquired by NVIDIA), Metaswitch (Networking software, acquired by Microsoft), Affirmed (Telco software, acquired by Microsoft). There have also been several new startups, as well as existing startups that have raised significant capital (Arrcus, Aviatrix, Alkira, DriveNets).
So, why this renewed activity in the network infrastructure market after several years of relative quiet? If you take a step back and look at broader changes in the enterprise/cloud infrastructure market, it helps answer this question.
The 4 macro trends driving renewed investments in the network are:
- Availability of high-end merchant silicon
- Rise of 5G
- The Essentiality of the network
- Rise of multi-cloud infrastructure
Let’s break down at each of these in more detail.
Availability of High-End Merchant Silicon
For the first several decades of its existence, being a networking vendor meant developing your own semiconductor chips (ASICs), each of which could cost hundreds of millions of dollars. This started changing with the introduction of switching chips by Broadcom in the early to mid-2000s. This gave companies like Arista Networks the opportunity to avoid silicon investments and instead focus their energy on software. But most of these chips were still targeted at a portion of the switching market.
Now, the next generation of ASICs from numerous companies, the Jericho series of chips from Broadcom and Cisco’s announcement of selling its Silicon One components, are also capable of going after the much larger routing market. Furthermore, ASICs from Intel (Barefoot) in the area of programmability and Innovium with high density switching, are all opening up other parts of the networking infrastructure. This enables leading network software providers like Arrcus to offer best-of-breed solutions for the entire $60B networking infrastructure market. Customers, in turn, get choice – which leads to better price/performance/features across the entire networking industry spectrum.
Rise of 5G
Microsoft’s acquisition of Affirmed and then Metaswitch are a great move on their part to pull together a comprehensive offering for CSPs as they start this journey towards a more software-oriented infrastructure. Expect other cloud vendors, as well as companies like VMware, HP, Cisco, Oracle, Ericsson, Samsung, Dell, Intel and others to start thinking along similar lines.
The Essentiality of the Network
Increased digitization across the enterprise has meant that networks are critical to businesses’ ability to do business, for their employees to be productive, for effective collaboration within and across companies. Now, with Covid19 and a remote-heavy workplace, the network is the lifeblood of our economy, of business, and of our personal lives.
Rise of a Multi-Cloud Infrastructure
The enterprise IT infrastructure world had a fairly homogenous design, with data centers and campuses connected together with well understood and standardized network design templates. In the last decade, the rise of public clouds has evolved to the adoption of hybrid clouds, and now increasingly a multi-cloud world with enterprises running applications on-premises, in multiple public clouds (AWS, Azure, Google/GCP, Oracle/OCI, IBM/SoftLayer and others). This places a large burden on the networking teams to implement and manage their connectivity needs across these multiple clouds in a way that’s scalable, performant, secure and most of all, cost effective.
The next generation of network companies will address these challenges head on and help enterprises and CSPs through these changes. I’m really excited about what Arrcus has been building these past few years with a clear value proposition that addresses each of these changes:
- Provide industry leading performance in scale and performance with convergence times that are several times better than anything else in the industry today.
- Scale ArcOS & ArcIQ for IP Clos data center (ToR, Leaf, Spine, Spline) and Peering/Edge deployments
- Enable CSPs and global enterprises the ability to replace aging and proprietary high-port count chassis-based routers with its Virtual Distributed Router (VDR) running on the latest generation of ASICs from Broadcom
- Enable enterprises to seamlessly deploy inter-cloud connectivity for both hybrid and cloud to cloud connectivity across existing infrastructure with the introduction of MCN platform (Multi-Cloud Networking)
- Provide customers choice without compromise by enabling them to marry the highest performance networking software with the highest performing hardware in the market
Delighted to have a front row seat as network infrastructure evolves in this coming decade, creating an opportunity for Arrcus to address these changes and build the next great networking company.
Congratulations to the team on this big launch and a big thanks to all the customers that have placed their trust in Arrcus solutions!
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