Cisco's Warrior: Networking Giant Embracing SDNs, Network Virtualization

Despite analyst beliefs that SDNs threaten Cisco’s core switch and router businesses, the new business model will be a boon for Cisco, according to CTO Padmasree Warrior.

Cisco Systems not only will not be hurt by the rise of network virtualization and software-defined networks, but it will be a leader in those areas, according to a company executive.

Refuting the idea that network virtualization and SDNs lessen the need for the complex and expensive switches and routers that bring in billions of dollars in revenue to Cisco, the rise of the new networking models call for a stronger networking infrastructure, according to Padmasree Warrior, CTO and chief strategy officer for Cisco.

€œFirst, SDN, network virtualization and overlay networks (choose your favorite descriptor) are not going to commoditize the underlying networking infrastructure,€ Warrior said in an Aug. 2 post on the Cisco blog. €œThese architectures actually place more demands on the core infrastructure to enable network virtualization securely, with high performance, at scale.

€œWhy? Because customers expect their core infrastructure to be seamlessly integrated with servers and fabric interconnects. They want a common management framework across all switches (physical and virtual), and they want the ability to support heterogeneous server and hypervisor environments. Our experience is that they expect their networking vendor to fulfill those needs,€ he said.

SDNs have become the key trend in the networking space. Descriptions vary, but essentially, SDNs decouple the workloads from the physical network, moving intelligence in the network€”such as directing traffic to minimizing latency to security€”from switches and routers to a software-based controller. By doing so, SDNs can reduce the need for traditional switches and routers, and instead let enterprises buy simpler and less expensive networking equipment. In addition, networks become more dynamic and easier to manage.

Analysts see this as a threat to traditional networking vendors like Cisco and Juniper Networks, who make a lot of money selling these switches and routers, and say the trend toward SDNs could make them walk a careful path in embracing the changes while not harming their bottom lines. Recent deals in the network virtualization space€”VMware€™s $1.26 billion bid for Nicira and Oracle€™s acquisition of Xsigo€”only added fuel to the debate about Cisco and SDNs.

€œThe problem that we see for Cisco, however, is that Cisco has invested heavily in building its own network switches and its own network infrastructure/management products€”and SDN and open switch technologies, such as OpenFlow, may completely undermine Cisco€™s control,€ Joe Clabby, principal analyst with Clabby Analytics, said in an Aug. 1 research report. €œBecause of SDN, Cisco could be disintermediated by a whole new group of competitors.€

However, Cisco€™s Warrior doesn€™t see it that way. There will be new business models around networking and infrastructure, she wrote in her blog post, €œbut SDN no more minimizes the underlying infrastructure than a new steering wheel undermines the importance of a car engine. Thanks to the numerous interactions we are privileged to have with our customers every day, Cisco has an unparalleled understanding of this networking evolution, and we expect to benefit substantially from it. Indeed, we already are.€

Warrior said that Cisco, with its Nexus 1000V soft switch, pioneered network virtualization in 2009, enabling businesses to leverage network virtualization in the data center for the first time. The company currently has more than 6,000 Nexus 1000V customers.

In addition, network virtualization means different things to different organizations, depending on their needs, she said. For example, universities want network partitioning, which requires controller software and OpenFlow agents, while enterprises want network virtualization to enable private cloud automation for virtual workloads, such as a virtual desktop infrastructure, or VDI. Cloud and service providers also have different demands.

Cisco is looking to address all those demands through its Cisco ONE (Open Network Environment), which rolled out in June, Warrior said. The solution offers a software controller, a One Platform Kit with APIs for hyperscale data centers, and an SDN offering that includes a number of virtual overlay networks that extend support for OpenStack, various hypervisors and VXLAN gateway capabilities for physical and virtual networks.

€œCisco understands very well the requirements and opportunities driven by network virtualization and is driving this market evolution,€ she said, noting the various industry standard efforts and groups that Cisco also is involved in, including the Open Networking Foundation and OpenStack.

Cisco also is taking another path that Warrior didn€™t address in the blog. The vendor is spending $100 million to start a €œspin in€ company, Insieme, that will be run by Cisco engineers to develop SDN-related technologies. If the Insieme products work, Cisco will buy the company for $750 million and bring its networking software technology into Cisco€™s own portfolio.