Intel is investing $6.5 million in Big Switch Networks, one of a number of smaller companies in the fast-growing area of software-defined networks.
Big Switch officials, who in November unveiled the first of the company's SDN product suites, said in an announcement Feb. 8 that the investment by the world's largest chip maker brings the total amount raised by their company to more than $45 million. Other investors include such firms as Goldman Sachs, Index Ventures and Redpoint Ventures.
"Dramatic changes in enterprise and service provider data center networks require novel networking architectures and products," Big Switch co-founder and CEO Guido Appenzeller said in a statement. "We are excited to have Intel Capital as a strategic investor to help deliver next-generation software-defined networking solutions to the market."
SDNs promise to make data center and service provider networks more flexible, dynamic, and scalable, easier to program and more cost-efficient. The aim is to remove network service, such as directing traffic, from complex and expensive switches and put them into software-based controllers.
With server and storage virtualization becoming more commonplace in the data center, traditional networks—rigid and difficult to program—were seen as bottlenecks. Software-defined networks and network virtualization are aimed at eliminating the network bottleneck.
Interest among enterprises and vendors is growing. IDC analysts predict that revenues in the market could hit $360 million this year and grow to $3.7 billion by 2016. Established network vendors, such as Cisco Systems, Hewlett-Packard and Juniper Networks, are beginning to offer SDN strategies.
At the same time, startups like Big Switch Networks, Embrane and Plexxi, also are pushing solutions. In addition, some tech vendors that until now have had a small presence in the networking space, such as VMware and Oracle, are looking to add SDN capabilities to their data center solutions.
For Intel, enterprise networking and SDNs offer another growth area for the chip maker as it looks to expand its reach beyond its traditional PC and server chip businesses. Intel has made a number of acquisitions in the networking space, including buying QLogic's InfiniBand business for $125 million and the high-performance computing interconnect assets from supercomputer maker Cray for $140 million.
Intel in 2011 bought Fulcrum Systems, which designed chips for 10 Gigabit Ethernet and 40GbE networking switches.
"Data center operators need programmable and cost-effective merchant silicon-based networking architectures to meet their data center economic and operational objectives," Bryan Wolf, managing director of Intel Capital, said in a statement. "At Intel Capital, we're looking for companies creating the most disruptive data center solutions, and Big Switch Networks Open Software-Defined Networking product suite is a leading solution in data center network virtualization."
Big Switch Networks in November rolled out its Open SDN suite, a set of networking tools based on the OpenFlow protocol that is helping fuel much of the SDN push. The suite includes the Big Network Controller platform, Big Tap network monitoring tool and Big Virtual Switch, a network virtualization application.
OpenFlow is the protocol that enables software controllers to manage the network intelligence traditionally found within physical appliances. It has become a crucial part of many vendors' SDN initiatives. Dell officials announced Feb. 7 that they were putting OpenFlow into its FTOS networking operating system, bringing support for the protocol to its switches.
Dell's announcement came days after Cisco officials unveiled new capabilities for their ONE networking initiative, including a controller that can work with OpenFlow.
Not everyone is so enamored of OpenFlow. In a talk with some Boston-area journalists in December, Martin Casado, CTO of SDN company Nicira—which was bought by VMware last year for $1.26 billion—said that the bulk of what OpenFlow-based controllers do can be done better through virtual switches in hypervisors. Casado had played a key role in developing OpenFlow.