2015 Ethernet Buyer Behavior
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The document contains an analysis of Ethernet buyer behavior and technology adoption in enterprise IT as of April 2015, highlighting the significant shift from traditional on-premise infrastructure to cloud-based solutions, particularly in public cloud IaaS and software-defined data centers. It emphasizes the growing importance of open networking and the adoption of white box switches by organizations, while also detailing the revenue trends of major players like Cisco, Dell, and HP. Additionally, it discusses emerging trends in high-speed networking technologies and the implications of partnerships and acquisitions within the industry.
2015 Ethernet Buyer Behavior
- 1. Ethernet Buyer Behavior New Technology Adoption Survey Data & Analysis April 15, 2015
- 2. Page 2 Waves are Driven by the Wind The bigger the wind, the bigger the wave.
- 3. They all came together in 2014 1980 1985 1990 1995 2000 2005 2010 2015 2020 Contract Manufacturer Original Design Manufacturer & Open Source Hardware Original Equipment Manufacturer Enterprise IT Hyperscale driven innovation New class of OEMs Integration of mobile and wireless Webscale IT Open-Source Software Commercial Versions of Open-Source Cloud Platform Hyperscale Computing Wired/Wireless Carrier ICT & Smartphone Manufacturer
- 4. 3 Market Dynamics Changing Enterprise IT 4 #1 Public Cloud IaaS #2 Software Defined Data Center #3 White Box
- 5. 5 Cloud
- 6. Public Cloud IaaS 6 $- $5 $10 $15 $20 $25 $30 2010 2011 2012 2013 2014 2015 2016 Worldwide Infrastructure-as-a-Service Revenue ($B) Displacing traditional on premise servers, storage and networking infrastructure. Source: Gartner & Forbes
- 7. Public Cloud IaaS Percentage of On-Premise Spending Replaced by Cloud Computing 0% 2% 4% 6% 8% 10% 12% 14% 16% 2008 2010 2012 2014 2016 2018 2020 Over 15% of the traditional enterprise networking equipment market disappears into the public cloud in the next 5 years.
- 8. Enterprise Infrastructure Leader Trajectory 8 2010 2011 2012 2013 2014 Cisco 40.0 43.2 46.1 48.6 47.1 Dell 52.9 61.5 62.1 56.9 EMC 17.0 20.0 21.7 23.2 24.4 HP 126.0 127.2 120.4 112.3 111.5 IBM 99.9 106.9 104.5 99.8 92.8 0 20 40 60 80 100 120 140 Billions Private Traditional Enterprise IT Leader Revenue Trend
- 9. 2014 On-Premise IT & Cloud Service Brand Leaders Voted by IT Pros On-Premise Backup EMC Dell EMC EMC EMC EMC On-Premise Enterprise Networked Storage EMC Dell EMC EMC EMC NetApp On-Premise Dedicated Enterprise Server HP Dell HP HP HP HP On-Premise Virtual Server VMware VMware VMware VMware VMware VMware On-Premise Virtual Desktop VMware VMware VMware VMware VMware VMware Cloud Backup Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Cloud Enterprise Networked Storage Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Cloud Dedicated Enterprise Server Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Cloud Virtual Server Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Cloud Virtual Desktop Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Overall Backup (On-Premise/Cloud) EMC Dell EMC EMC Amazon AWS Amazon (AWS) Overall Enterprise Networked Storage (On-Premise/Cloud) EMC Dell EMC EMC EMC NetApp Overall Dedicated Enterprise Server (On-Premise/Cloud) HP Dell HP HP HP HP Overall Virtual Server (On-Premise/Cloud) VMware VMware VMware VMware VMware VMware Overall Virtual Desktop (On-Premise/Cloud) VMware VMware VMware VMware VMware VMware
- 10. 10 SDDC
- 11. Software Defined Data Center 11 Predominant Architecture Today Predominant Architecture in 10 Years Software Defined Servers (Server Virtualization) Software Defined Data Center
- 12. I expect the enterprise SDN ecosystem to most likely evolve in the following way: 12 0% 20% 40% 60% Other Open switch OS leaders such as Cumulus will dominate enterprise SDN Open Linux and cloud platform leaders such as Red Hat will dominate enterprise SDN Enterprise virtualization software leaders such as VMware will dominate enterprise SDN Cisco will dominate the SDN era just like they dominate the current era of hardware defined networking.
- 13. Are vendors talking to you about evaluating, purchasing and deploying: 13 0% 20% 40% 60% Other None of the above SDN orchestration software NFV apps (router, firewall, load balancer, etc.) Cloud operating system (OpenStack) Software defined storage (object, block or file)
- 14. Which of the following SDN/NFV products do you expect to evaluate or deploy in 2015? 14 0% 10% 20% 30% 40% 50% Other None of the above Virtual Router Virtual NICs Virtual Firewall Virtual Load Balancer Virtual Switches
- 15. My team knows that SDN and NFV are deployed by giant hyperscale environments, but: 15 0% 20% 40% 60% Other There are no buts, we think the SDN/NFV, products and support are ready for our enterprise. We would like to hear from other IT teams who have deployed SDN/NFV None of the above We are evaluating SDN/NFV now We have not evaluated SDN/NFV technology and products We have not learned enough about SDN/NFV technology and products to consider evaluating
- 16. What percentage of all (server, storage and switch) network ports in your data center are: 16 0% 20% 40% 60% 80% 56Gb InfiniBand 10/20 Gb InfiniBand 1/2/4Gb Fibre Channel 40Gb Ethernet 40Gb InfiniBand 16Gb Fibre Channel 8Gb Fibre Channel 100Gb Ethernet 10Gb Ethernet 1Gb Ethernet
- 17. Which of the following high-speed Ethernet products do you expect to evaluate or deploy in 2015? 17 0% 10% 20% 30% 40% 50% 100Gb NICs 25Gb NICs None of the above 100Gb Switches 25Gb Switches 40Gb NICs 40Gb Switches 10Gb NICs 10Gb Switches
- 18. My understanding is the 25G Ethernet standards: 18 0% 20% 40% 60% 80% Other A standard for this speed will never be developed Were ratified in 2014 Are still not ratified
- 19. This percentage of our 10Gb NICs are deployed in our data centers: 19 0% 20% 40% 60% 80% In non-virtualized servers In virtualized servers
- 20. This percentage of our 10Gb NICs are: 20 10% 20% 30% 40% 50% 60% Partitioned into virtual NICs Not partitioned into virtual NICs
- 21. Are you aware that today you can create multiple virtual 1GbE NICs out of one or more 10GbE NICs, efficiently splitting the bandwidth and lowering operating costs? 10.3% 24.0% 32.7% 33.0% 0% 10% 20% 30% 40% No, if I had known, I would have started using 10GbE NICs No, but it won’t change my practice of using multiple 1Gb NICs Yes, I knew and that’s a big reason why I started using 10GbE NICs Yes, I knew but it didn’t change my practice of using multiple 1GbE NICs
- 22. I want to manage my virtual network resources from (select all that apply): 3.5% 15.2% 26.8% 33.8% 66.7% 0% 20% 40% 60% 80% Other Overarching manager of managers (HP OpenView, CA Unicenter, IBM… Best-of-breed software for individual solutions Switch/Fabric management software Server virtualization hypervisor (VMware, Hyper-V, Xen)
- 23. 23 2015 Ethernet, Networking & SDN Brand Leaders Voted by IT Pros FCoE Switches Cisco Brocade Cisco Brocade Cisco Brocade Ethernet Core Switches Cisco Cisco Cisco Cisco Cisco Cisco Ethernet Top of Rack Switches Cisco Cisco Cisco Cisco Cisco Cisco Enterprise Ethernet NICs Intel Intel Intel Intel Intel Intel Ethernet Network Monitoring SolarWinds SolarWinds SolarWinds SolarWinds SolarWinds SolarWinds Embedded Blade Server Networking HP Dell HP Cisco Cisco HP SDN Platform Cisco APIC Cisco APIC Cisco APIC Cisco APIC Cisco APIC Cisco APIC SDN Enabled Switches Cisco Cisco Cisco Cisco Cisco Cisco Layer 4-7 NFV Services Platform VMware NSX VMware NSX VMware NSX VMware NSX VMware NSX VMware NSX SDN Monitoring Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON) Bare Metal Switch OS Cumulus Linux Cumulus Linux Big Switch (Switch Light) & Cumulus Linux (tie) Big Switch (Switch Light) Big Switch (Switch Light) Cumulus Linux Open Networking Switch Dell Dell Dell Dell Dell Dell
- 24. 24 White Box
- 25. White Box/Bare Metal Switches 25 ODM Vendor (Quanta, Hon Hai, Accton, Celestica) Brand Vendor (Dell, HP, Cisco, EMC) Traditional Customers (Business, Gov, Education) Specialized Customers (Cloud, Carrier) Hardware specification, design, assembly and procurement, some firmware and software support Repair and maintenance, less of IT consulting and software for these IT savvy customers HW assembly, design & components IT consulting, maintenance & repair Traditional Model New Business Model
- 26. Traditional , White Box & Brite Box Switch Models
- 27. Building on Bare Metal ONIE is the Open Network Install Environment, and Open Compute Project open source initiative contributed by Cumulus Networks
- 28. OCP Wedge Switch Architecture Switch ASICs: Broadcom, Intel, Mellanox, Accton Big Switch – Switch Light OS Cumulus - Cumulus Linux Pica8 - PicOS NOS FBOSS – Facebook NOS
- 29. Facebook Six Pack 29 Facebook's Six Pack switch is a 7RU chassis that includes eight of its Wedge switches and two fabric cards (Photo: Facebook)
- 30. Which of the following open networking switch products do you expect to evaluate or deploy in 2015? 30 0% 20% 40% 60% Non-branded white box switches from hyperscale providers Quanta or Accton, running an open switch operating system from Cumulus, Pica8 or BigSwitch None of the above Branded white box switches (Brite Box) switches from Dell or HP, running an open switch operating system from Cumulus, Pica8 or BigSwitch We will not be evaluating or deploying open networking switch products
- 31. Obstacles to my IT organization considering open networking switches are: 31 0% 20% 40% 60% Other None of the above References from other IT organizations that have deployed open networking switches Vendors are not talking to us about open networking switches We don't believe new open networking switches will be as reliable as switches from current… We don't know enough about open networking switches to consider them
- 32. We need the following protocols supported simultaneously in our data centers: 32 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% NVGRE for tunneling L2 traffic over L3 networks RDMA for low-latency scale-out traffic across the data center RDMA for low-latency cluster interconnects VXLAN for tunneling L2 traffic over L3 networks Fibre Channel over Ethernet for storage area networks iSCSI for for storage area networks Fibre Channel for storage area networks TCP/IP for LAN and NAS traffic
- 33. 33 POV
- 34. Inflection Point Business goes on to new heights 10x change in an element of the business. What worked before doesn’t work now. The executives are the last to know. Source: Only the Paranoid Survive, by Andy Grove Business declines >$5B R&D Hyperscale, Carrier & Enterprise Unified Wired & Wireless NFV Apps SDN Orchestration Open Source NOS Bare Metal Switches What it takes to win
- 35. A Winning Formula 35 Programmable Switch OS SDN Tools Enterprise-class Hardware
- 36. The Result: Arista Revenue & Net Income 36 $140 $193 $361 $570 $13.8 $9.6 $20.8 $73.0 0 100 200 300 400 500 600 2011 2012 2013 2014 Millions
- 37. Maybe a Winning Strategy: Go Private and Double Down on Open Jan., 2014 - The shift toward open data center and networking technologies got a boost this week when Dell announced a reseller deal to offer Cumulus Networks' Linux network OS for bare-metal switches. Through the partnership, Dell said it will offer Cumulus Linux network OS to customers as an option for its S6000 and S4810 top-of-rack switches. The new strategy from Dell is the latest effort to decouple networking hardware from the underlying software. Proponents say disaggregating networking components will enable companies to significantly reduce their data center and network costs as they look to embrace the software-defined networking trend and get away from paying a premium for tightly integrated network stacks from a single vendor. "I believe there's a big market opportunity for using standard x86 hardware modules for low-cost switches," John Abbott, distinguished analyst at The 451 Group, said via email. "The network is heading in the same direction as servers and storage." Dell, which is in the midst of re-inventing itself as a private company in the post-PC era, wants to capitalize on that opportunity. Dec., 2014 - Dell has added Midokura to its Open Networking initiative to include Midokura. The deal includes a joint go-to-market program, validated reference architecture and global reseller agreement. Midokura’s Enterprise MidoNet software will now be available on Dell infrastructure, delivering a network virtualization overlay for OpenStack that helps enterprise customers and service providers create an agile cloud networking infrastructure based on open technologies. Dell said MidoNet fits well with its existing partnership with Cumulus Networks for its Linux operating system. The Dell, Cumulus Networks and Midokura solution enables a growing number of service providers and enterprise customers to provision scalable virtual networks to connect to physical workloads in a matter of minutes. Midokura MidoNet leverages Dell switches to facilitate network traffic flows from virtual machines to non- virtualized, physical workloads such as high-performance databases, email servers and legacy systems at line rate. What this shows is that we’re actively connecting the dots with like-minded companies to upend the traditional, black-box model of networking,” said Tom Burns, vice president and general manager, Dell Networking. “That old model is too rigid, too locked and too slow to innovate. Dell’s Open Networking initiative is about being open, flexible and software-defined to help maximize our customers’ application environments.” Acquire & Partner for SW Offer Bare Metal Switches
- 38. Maybe a Winning Strategy: Divest HW, Focus on Software & China March 26, 2015 - H-P Nears Deal to Sell Control of Chinese Unit Tsinghua Unigroup has emerged as the preferred bidder in an auction of 51% of the business, H3C Technologies Co., the people said. A deal between the two parties, which could also include a separate server operation, may still be a few weeks away and there is no guarantee another bidder won’t re-emerge, one of the people said. Tsinghua Unigroup had been competing with other bidders for the business, which is worth roughly $5 billion in total, including China Huaxin Post and Telecommunication Economy Development Center, people familiar with the matter said. H-P, driven by the issue to seek a buyer for the business, limited the list of bidders for H3C to domestic companies in order to win Chinese government approval for the sale and boost the prospects for the operation there. Purchasing control of H3C would give Tsinghua Unigroup, a company funded by the prestigious Tsinghua University, a major presence in China’s networking gear market after it recently purchased two of China’s largest chip designers. In September, Tsinghua Unigroup also signed a strategic alliance with Intel Corp. that gave the U.S. chip maker 20% of the Chinese company’s shares for a price of $1.5 billion. H3C is a major supplier of corporate-data networking gear in China. H3C, which H-P inherited when it bought 3Com Corp. in 2010, has 5,000 employees world-wide, according to its website. March, 2015 - The networking division at HP has had a chequered past. Under some CEO's it has been seen as important to the business but under others it has been left to rot. In 2013, HP revamped its networking division and put Bethany Mayer in charge. Despite a successful tenure, last year it spun out Network Functions Virtualisation (NFV) into its own division and appeared to move Mayer sideways. The result was that six months later, Mayer bailed for a better job at Ixia. Since then, HP has been fairly quiet about networking, despite its importance to HP's cloud strategy. HP has invested a lot of money into Software Defined Networks (SDN), NFV, is a leading vendor in OpenDaylight and OpenStack. As a result HP's silence has been confusing to the market. Now it has announced it is to buy Aruba Networks for a substantial $3 billion but when cash at hand is taken into account, HP will pay a net $2.7 billion. The market will be looking closely at this one and wondering if this will be a good or bad move for HP. By acquiring Aruba Networks, HP will also strengthen its wider security intelligence offering. It will be able to gather much more detail about mobile networking traffic. This is something that only a few of its security, networking and cloud competitors such as Cisco, IBM and Huawei are in a position to do. Invest in SW & Wireless Divest in HW, gain access to China
- 39. Vendor Switch Past: Enterprise HW Defined Ecosystem Vendor Switch OS Appliances Router Firewall Load Balancer Etc. Vendor NOS Orchestration Monitoring Vendor Storage Software Failover DeDup Compression Etc. Server Virtualization ESX Hyper-V Xen KVM Vendor/Merchant Switch ASIC Vendor Storage System Vendor Server Cisco & Dwarves EMC & Dwarves HP, IBM, Dell, Lenovo Merchant Server OS Merchant Server Processor Vendor Block, File, Object OS Merchant Server Processor
- 40. White Box Server Cloud Platform (vCloud, Azure + commercial versions of OpenStack) Future: Enterprise SW Defined Ecosystem NFV Router Firewall Load Balancer Etc. SDN Orchestration Controller Switches Monitoring Software Defined Storage Block File Object Failover, Dedup, Compression Server Virtualization ESX Hyper-V Xen KVM Merchant Server OS Bare Metal Server Merchant Server Processor Today many pure-play start-ups in SDN, NFV, software defined storage and switch OS segments White Box Switch Merchant Switch OS w/SDN agents Bare Metal Switch Merchant Programmable Switch ASIC
- 41. 10 Year History of Software Defined Servers 41 0% 20% 40% 60% 80% 100% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Workloads Virtualized Workloads Not Virtualized Source: Gartner
- 42. Software Define Storage in 10 Years (Forecast) 42 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Enterprise SDS Traditional Enterprise Storage Hyperscale SDS Cloud OS Orchestration Storage Apps White Box Servers Hosted Private Cloud On Premise Private Cloud Public Cloud Source: Wikibon & IT Brand Pulse Commercial versions of open-source based Enterprise SDS
- 43. Software Defined Networking in 10 Years (Forecast) 43 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Enterprise SDN Traditional Enterprise Networking Hyperscale SDN SDN Orchestration NFV Apps White Box Switches Open Switch OS Hosted Private Cloud On Premise Private Cloud Public Cloud Source: IT Brand Pulse Commercial versions of open-source based Enterprise SDN & NFV Apps
- 44. Coming Soon An Epic Land Rush for the Wide Open Software Defined Data Center
- 45. You won’t have to buy the whole album to get one app Network Software Suite Network OS Network OS QOS Load Balancing Firewall Network Monitoring IPv6 Encryption FCoE WAN Opitmization VXLAN Network OS Network OS Network Services Eagles Justin Timberlake Pit Bull MC Hammer U2 Marvin Gaye Mariah Carey Rolling Stones Rolling Stones Usher Miley Cyrus Bruce Springsteen OpenStack Apps
- 46. Data Center App Innovation will Explode
- 47. Page 47 IBM is Ahead in the Race to Pass the Hardware Baton
- 48. Page 48 1985 Vertical Integration Sell Mfg. Design US RoW 2005 Original Design Manufacturer Sell US RoW 2015 Original Equipment Manufacturer US RoW 1995 Contract Manufacturer Sell US RoW Design A New Group of HW OEMs are Ready to Carry the Baton
- 49. Page 49 Same Servers, New Perspective 89% 12% 36% 36% IBM Lenovo Software GM% x86 Server GM% x86 Server GM% PC GM%
- 50. Page 50 First Movers Net Worth Mark Zuckerberg $33B Larry Page $32B Jeff Bezos $30B Sergey Brin $30B Jack Ma $26B Ma Huatang $15B Robin Li $15B
- 51. Late Movers Cost Cutting Traditional Enterprise Infrastructure PC Client Computing Mergers & Acquisitions Stock Buybacks