Cisco's legacy hurts its virtual networking strategy

Though Cisco's earnings were better than expected, the company is likely to have a difficult time embracing software-defined networking, as its hardware commitment restricts its technology development options.
Written by Jack Clark, Contributor

Cisco's commitment to hardware has forced it to take an Oracle-like approach to the disruptive technologies of software-defined networking.

The networking giant released better-than-expected fourth-quarter results on Wednesday, but trouble may lie ahead for Cisco as businesses, universities and start-ups begin adopting software-defined networking. This is because the technology decouples the management and orchestration of a network away from switches and onto commodity hardware, making it easier for datacentre operators to spend much less on datacentre kit.

Cisco has so far sought to boost its SDN credibility by embedding more sophisticated software in its switches. Image credit: Charles McLellan

Cisco's chief executive John Chambers gave an agenda-setting answer when asked on an earnings conference call about the company's strategy around software-defined networking (SDN).

"We think the future is going to be hardware and software combined. We think when you have knowledge of the network, and are able to know what's going on in the network, you can program to it," he said, according to a transcript on SeekingAlpha

Cisco's approach makes sense for the company, but then it would, to a hardware incumbent: 'If all you have is a hammer, then everything looks like a nail' pretty much sums it up.

Software and hardware together

Reading between the lines, Chambers's answer suggests that to get the most out of SDN, Cisco believes a thorough understanding of the hardware layer is needed. In turn, this means the software and hardware should be developed by the same company and linked together.

To that end, Cisco has so far sought to boost its SDN credibility by embedding more sophisticated software in its switches. While this doesn't fit the exact definition of SDN — which moves control from switches up into a central management plane, probably using some form of commodity x86 server — it has roughly the same outcome: switches become more manageable via a central interface.

This sounds good. But if you analyse Cisco's view, it suggests the company is keen to make sure a more software-focused approach does not threaten its longstanding networking hardware business.

For one thing, it lets Cisco keep the prices high on its networking equipment: by using its Cisco ONE (Open Network Environment) technologies to put more software on its switches, it can give customers SDN features while encouraging them to keep on buying its 'smart' equipment, which is priced at a premium.

The approach means Cisco wants to embed information about the network at the hardware layer and have it flow up to a more flexible software control plane. This differs from the approach taken by SDN-like technologies such as OpenFlow and Nicira, which see intelligence originate and reside in the control plane, with decisions pushed out to the hardware.

This strategy is akin to Oracle's 'software and hardware, engineered together' approach — a tactic the company committed to after it gained a huge hardware division in its Sun Microsystems acquisition.

Both Cisco and Oracle are trying to embrace new technologies, but on their own terms. This would be fine if they were smaller companies, but both have such dominance of their respective markets that the decisions they make will influence the rest of the IT industry.

A different direction?

There are signs that major IT organisations are going in a different direction to Cisco. Take Google, for example. It builds its own networking gear and recently announced it has implemented an all-SDN OpenFlow-based networking system to run on top of this. As a result, Google expects to boost network utilisation to close to 100 percent, compared with the industry's typical 30 to 40 percent.

Both Cisco and Oracle are trying to embrace new technologies, but on their own terms

This is all made possible by the efficiencies in traffic routing that can be squeezed out when all the intelligence comes from a central control plane giving orders to underlying hardware, rather than the other way around.

OpenFlow was developed at Stanford University and has gathered huge interest in academic circles. For example, Indiana University is building a US-spanning OpenFlow-enabled network under the name Internet2.

Furthermore, Cisco's rejection of this type of SDN could put it on a collision course with virtual computing environment allies VMware and EMC, as EMC-owned VMware recently acquired network virtualisation company Nicira for $1.3bn.

VMware is expected to integrate Nicira's technology with its virtualisation software to help move information around and between datacentres. Crucially, Nicira's approach does not care about the underlying hardware; this means Nicira-based networks are not tied to any one supplier and are also capable of an SDN-style central control plane.

Competition with old pals

Chambers acknowledged on the conference call that this could lead to competition between Cisco and VMware.

"With VMware and EMC, it's been a very strong partnership," he said. "We've both benefited greatly from it... but we are going to be an open player, and we've shown in the marketplace when we compete, we can be really tough."

Ultimately, Cisco's approach is good for investors but potentially bad for innovation, as the company will likely seek to use its influence to make its particular view of SDN the industry standard.

If this happens, then businesses will have to keep on spending large amounts of money on IT equipment that dovetails into proprietary software, which then has API compatibility or NIC-support for OpenFlow. Though this may make SDN slightly more accessible to smaller businesses, it could lead to larger companies giving Cisco the cold shoulder and taking the Google route.

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