Cisco’s SDN strategy update looks like realpolitik redux

Want to see the death of dreams played out in the world of hardware giants? Check out Cisco’s dogged efforts to keep its proprietary and vertically integrated networking gear and its margin relevant as open-source protocols and controllers invade the market.

Last week Cisco offered an update on the beta customers using its new OnePK program to implement software-defined networking on its gear, and it’s an exercise in realpolitik that Kissinger would have admired, if Kissinger cared about networking hardware. I spoke with Dave Ward, Cisco’s CTO of Engineering (pictured above) about the network giant’s strategy, and he told me there are more than 50 beta customers using the Cisco software (and gear) to implement everything from load balancers to a cloud-based DVRs.

Cisco’s big plans tie the network to the data center

The how is more interesting than the what. Last year I wrote a post about Cisco’s strategy, saying it would focus on big vendors such as Cisco’s core service-provider customer base and that it would be open in as much as an exclusive nightclub is open. This is still true, although Cisco is supporting protocols such as OpenFlow in its gear and is also supporting all of the big hypervisors with its controller software. And remember, Cisco has a lot at stake here.

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So let’s look at what Cisco has pulled together. There are two prongs in an enterprise SDN strategy — one inside the data center and one associated with traffic between data centers (or between the data center and an enterprise office). Cisco has both and has tied them together. For SDN on the wide-area network, it had purchased Carriden as the orchestration layer. Here it competes with vendors such as BTI or Alcatel-Lucent but also is solving problems similar to what Google solved with its homegrown OpenFlow network between data centers in 2011.

Inside the data center, where companies like Nicira and Big Switch are focused, Cisco has built something it calls the elastic service control. The software works on all of the popular hypervisors and can handle networking gear that doesn’t belong to Cisco. But because this is Cisco, and CEO John Chambers had warned that his plan to deal with the threat of SDN would rest in the ASIC, Cisco also had introduced new hardware containing specialty silicon.

Custom ASICs to save the day!

In many of its routers, the Cisco-design ASIC tracks data about the application running on the network and transmits that information to other routers containing that same chip. This hardware gives Cisco the ability to deliver service-level agreements and enforce rules for apps at the hardware level without IT intervention. Of course, other firms are trying to build this capability into software, but Cisco is trying to maintain its edge on the box market, so it makes sense that it wants to retain this capability in the hardware.

Its overall pitch is that is can basically wed the WAN virtualization with the data center virtualization to deliver exactly the resources an app needs when it needs it. This is a hot area with startups teaming up to offer similar capabilities or software to make this happen. The hardware containing its ASIC allows buyers with the right boxes at each end a level of control that Cisco hopes will justify the need to purchase its boxes — at least at some points in the network. And because Cisco knows that blindly shutting out all hopes of OpenFlow and cheaper gear would be crazy, it is supporting other protocols and even controllers through its orchestration software.

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In Cisco’s ideal scenario, its customers will continue to buy Cisco hook, line and sinker and use it to deploy SDN. Undoubtedly some will. But what’s more likely is that customers, even those afraid to get their hands dirty messing around with complicated OpenFlow or open-source SDN controllers will buy Cisco gear like I might buy a Hermes scarf or a Gucci bag to accessorize my outfit from The Gap. Thus, they might pick up some boxes running merchant silicon and tie that into some Cisco gear.

“There isn’t going to be some flag day for a conversion to SDN,” Ward noted. And he’s aware that there will also be new and open protocols that Cisco will have to support. “It does appear that there are going to be more [protocols], and we don’t want to be trapped, waiting for them to mature,” he said. That’s why Cisco is going to support those protocols through agents on its OnePK platform. Customers will leave the engineering to Cisco, giving Cisco the opportunity to add value and keep its margins.

Will it work? That’s the $ 64,000 question.

However, much of this still seems like a stopgap measure that relies on service-provider customers deciding that they’d rather stick with Cisco than let their own network engineers build out products that might help lower costs. Cisco has already done a restructuring to help put its business in line with the new infrastructure realities, but my hunch is that it will have to continue adapting to a new sales environment (and style) as well as see margins erode.

Guido Appenzeller (left) and Kyle Forster of Big Switch

Kyle Forster, a co-founder and president of product and sales with Big Switch, which makes tools and provides services around the open-source Flood Light controller software, likens Cisco’s position right now to a mainframe vendor at the beginning of the client-server era.

“They are copying the innovation that they see in the outside world, and are bringing it in,” Forster said. “But they are competing against much more open architectures that can contribute faster and offer more choice.” In Forster’s opinion, Cisco will find itself paddling like hell to keep up with the more open, software-oriented market and will fall farther and farther behind. Eventually, even the customers who want to do it themselves will see the benefits of switching over to more innovative hardware and software. Obviously, Forster is hoping that those customers will also pick up Big Switch’s software and support when they make their move.