SDN Vendors Big Switch, Plexxi Secure New Funding

Both companies say they will use the new money they've raised to scale their network virtualization products and expand their reach in the market.

SDN switch

Big Switch Networks and Plexxi, two of a broad array of growing smaller companies in the network virtualization space, announced new rounds of funding that show the growing interest in changing the way things are done in the data center.

Big Switch officials on Jan. 19 announced $48.5 million in Series C funding from a wide range of new and existing investors, including Redpoint Ventures, Khosla Ventures, Morgenthaler Ventures, MSD Capital and Silver Lake Waterman. At the same time, Big Switch officials named two people—ex-NetApp CEO Dan Warmenhover and venture capitalist Gary Morgenthaler—to its board of directors.

Since the company launched in 2010, it has raised $94 million in funding.

For its part, Plexxi officials on Jan. 20 said the company had received funding from GV, formerly known as Google Ventures. Neither Plexxi nor GV said how much money was being invested.

Both Big Switch and Plexxi—founded as businesses dealing with such trends as mobile computing, big data and the cloud—began looking for networking infrastructures that are easier and faster to program, can scale to meet rapidly changing customer demands and cost less than traditional environments. Software-defined networking (SDN) and network-functions virtualization (NFV) look to address the issues by removing the control plane and various networking tasks—such as load balancing, firewalls, routing and intrusion detection—from the underlying hardware and putting them into software that can run on lower-cost commodity systems.

Analysts with Research and Markets are predicting a global SDN market that will hit $11.5 billion by 2020, and said last month that investments by service providers in both SDN and NFV will reach more than $20 billion by the same year.

Legacy players like Cisco Systems, Juniper Networks and Hewlett Packard Enterprise are rapidly building out their network virtualization portfolios, while a growing number of smaller companies and startups—not only Big Switch and Plexxi, but also Cumulus Networks, Midokura and Pica8—also are looking to gain traction in the space.

Big Switch's technologies are focused on enabling customers to run physical and virtual networks on bare-metal switches, and products include Big Switch Fabric for the data center, Big Monitoring Fabric for network management and security, and the Switch Light operating system for physical systems. Company officials said that Big Switch saw a 300 percent increase in customer wins in 2015 in multiple regions in the world and across a range of verticals, including technology, financial services, government, service providers and education.

The company will use the new round of financing to help it scale and expand geographically, as well as grow its reach in markets already using network virtualization technologies, officials said.

"These investors have a track record of reshaping the industries they touch," Big Switch founder Kyle Forster said in a statement. "We have always had a dual mission of modernizing networking while building a great business, and this is a group that believes what we believe."

For its part, Plexxi's focus is on offering converged, application-centric network infrastructure hardware and software tools that make it easier for users to build software-defined data centers and private and public clouds. Among the products are switches that consolidate network fabrics into a single tier and the company's SDN controller, Plexxi Control, which optimizes networks based on the needs of workloads.

Company officials said they will use the money from GV to scale its product offerings and company operations. Not including the GV funding, Plexxi has raised $83 million.

"GV invests in companies that have their eye on the future, offer disruptive innovation and drive market change," Plexxi CEO Rich Napolitano said in a statement. "We are at the dawn of the next great era of IT, the Cloud Builder generation, and Plexxi has developed a transformative data center network solution that promises to become the standard for future public and private cloud agility."