Karl Armani knew his software-as-a-service company, Medallia, was going to have to find a new way to run its networks.
Medallia, a provider of customer experience management software and services, currently uses networking gear from Cisco Systems and Arista Networks in its three data centers worldwide. As officials began planning to open three more data centers in 2015, they started looking for networking alternatives that would bring greater automation, better scalability, improved bandwidth and lower costs, according to Karl Armani, senior director of infrastructure and operations at Medallia.
The company explored the growing range of options on the market, from proprietary networking products to low-cost white boxes from original design manufacturers (ODMs), before settling on Dell and its Open Networking initiative, which offers Dell switches that can run third-party operating systems and software.
Since the company already runs Linux and Dell servers in its data centers and uses open-source tools, Medallia was intrigued by the idea of running Cumulus Networks’ Linux networking OS on Dell hardware. Throw in the lower costs when compared with the proprietary networking equipment brands and the support and services from a tier-one supplier, and Medallia was sold, Armani told eWEEK.
“We started talking with Dell, and we never looked back,” he said.
Medallia’s journey shines a light on the rapid changes occurring in all areas of the data center in the wake of the rise of hyperscale data centers, software-defined everything, the growth of cloud environments, big data, social networking and mobility, and the demand from businesses for hardware that is optimized for the workloads they’re running.
All that has fueled the growing adoption of white boxes from ODMs in data centers—in servers, networking and storage. Then there are new offerings from established data center tech vendors as they look to push back at the white-box trend by offering organizations a third way to go, which splits the difference between these cheaper and bare-bones ODM products and the more expensive and proprietary hardware resources.
The numbers are putting this trend in context. According to IDC analysts, server ODMs—which include such companies as Foxconn, Quanta, Pegatron and Stack Velocity—that as a group saw revenues in 2014 hit more than $3.9 billion, a 40.5 percent increase from 2013 and more than Cisco and Oracle (the world’s fourth- and fifth-largest system vendors) generated. These contractors shipped a combined total of 1.6 million servers worldwide, representing 17.1 percent of the global market and exceeded only by Dell and Hewlett-Packard, IDC noted.
A similar trend is happening in the networking space, where technologies like software-defined networking (SDN) and network-functions virtualization (NFV) make it easier to run networking tasks on lower-cost commodity hardware rather than more expensive and complex switches and routers.
Analysts with Infonetics Research this month found that bare-metal switches—hardware that is not locked into a specific operating system or other software—accounted for 11 percent of the data center ports shipped last year and that number will grow to almost 25 percent by 2019.
“Up till now, bare-metal switching has been attractive mainly to the large cloud service providers (CSPs) like Google and Amazon, who provide their own switch software integrated into data center orchestration and management platforms,” Cliff Grossner, research director for data center, cloud and SDN at Infonetics, said in a statement.
‘White Boxes’ Help Cut Cost of Building Giant Enterprise Data Centers
“But with vendors such as Dell and HP jumping into the mix with branded bare-metal switches, adoption of bare-metal switching is going to accelerate as tier 2 CSPs and large enterprises endeavor to achieve the nimbleness demonstrated by Google.”
ODMs are even getting into the storage side of the data center. According to IDC, contractors shipped 43 million terabytes of storage capacity last year, more than EMC, HP and Dell combined.
The growing popularity of white boxes in the data center can be traced to the rise of Web-scale businesses like Google and Facebook and the hyperscale data center environments they operate, according to Kuba Stolarski, research manager of enterprise server at IDC.
“It boils down to cloud service providers—the growth of the cloud—and not just the growth of the cloud as a platform or a service … but the really massive scale of the relatively small number of providers,” Stolarski told eWEEK.
Companies like Google, Facebook, Amazon, Microsoft and Alibaba operate huge data centers that run significantly large numbers of servers and other hardware to process, manage and move high numbers of small workloads. Such companies are constantly looking for more power- and cost-efficient ways to run their data centers, and—starting with Google—some began designing and building their own servers and relying more on ODMs for their hardware.
The number of such large, Web-based companies has since grown—Twitter, for example, designs its hardware in-house and then contracts with ODMs to build it, he said.
“There’s a growing pool of customers within this sphere,” Stolarski said.
Facebook’s launch of the Open Compute Project (OCP) in 2011 opened the door to open-source development of hardware in a way that mirrored the rise of Linux and further fueled the idea that data center hardware didn’t have to come from the established tier-one vendors.
In addition, it meant that hardware R&D was no longer the purview of the OEMs. The trend has continued with other projects, such as the OpenPower effort, which is looking to drive IBM’s Power chip architecture into hyperscale and Web-scale environments. OpenPower officials earlier this month introduced more than a dozen new products that came out of the open-source project.
“There are a lot of different moving pieces, but it boils down to taking R&D out of a small number of hands and putting it into the community,” he said. “It’s the idea of speeding up innovation.”
In the networking world, SDN and NFV are driving a large part of the changes. Web-scale businesses, enterprises, service providers and telecommunications vendors are looking to build for more programmable, agile and flexible networks that can address the rapidly changing demands brought on by mobile computing, big data, social networking and the cloud. Traditional networks house the network intelligence in proprietary switches and routers that require time-consuming programming and are difficult to quickly adapt to changing business needs.
SDN and NFV take the control plane and networking tasks like load balancing, firewalls and intrusion detection out of the underlying hardware and put them into software that can run on cheaper commodity systems. Putting these systems into software makes programming the hardware a job that takes seconds or minutes rather than days or weeks, which enables businesses to save money and time while enabling them to quickly spin out services for employees and customers.
‘White Boxes’ Help Cut Cost of Building Giant Enterprise Data Centers
It also has given rise to new companies like Cumulus, Big Switch Networks, Midokura and Pica8, which make network operating systems and other software that are not tied to specific hardware but can run on most commodity systems, including white boxes and bare-metal hardware. It’s an idea that is catching on with a growing number of organizations, according to Calvin Chai, director of product marketing for Pica8.
Companies have been buying networking technologies essentially the same way for 25 years, Chai told eWEEK. Now they’re hearing about the benefits that the disaggregation of software and hardware can bring in both performance and costs. They’re also seeing what the hyperscale organizations are doing.
“A lot of the customers we’re talking to are not Facebook, they’re not Amazon [and] they’re not Google,” he said. “They’re saying, ‘I don’t have the resources they do.'”
However, they want the capabilities, and are turning to white boxes running software like Pica8’s PicOS operating system—which is built atop an unmodified Linux kernel—or similar offerings from Big Switch, Cumulus and others, Chai said. And it’s not only the big players: “We are seeing a fair amount of enterprises as well,” he said.
The move to white-box networking gear also is helped by the development of the Open Network Install Environment (ONIE), a technology developed through the OCP that enables businesses to easily load a network OS onto a bare-metal switch.
The growth of white-box hardware in the data center continues to be a competitive threat to established OEMs. In a report in December 2014, analysts with the Dell’Oro Group said the virtualization trend and the growth of server vendors from China was keeping the global server market depressed. They estimated that 25 percent of the servers shipped last year went to cloud environments, and that the percentage will grow in the future.
“Consequently, traditional server vendors’ performance is being negatively affected as white-box servers continue to gain traction in cloud deployments, comprising about 10 percent of server shipments in the third quarter 2014,” Dell’Oro Director Sameh Boujelbene said in a statement at the time.
However, not all analysts see the white-box trend as such a significant threat. Writing in a research note in February about Cisco, Bernstein Research analyst Pierre Ferragu said that “while some observers continue to remain vocal with alarming comments about Software-Defined Networking, Hardware Commoditization and other tag words we largely find meaningless, we see Cisco’s momentum in Enterprise accelerating.”
Still, many OEMs are not sitting idly as white boxes find their way into more data centers. Instead, they are becoming active players in the growing array of open-source industry consortiums, from the OCP to the OpenDaylight Project, which is working to develop a standard framework for SDN and NFV. In addition, they’re building out their portfolios with branded products designed to offer the flexibility and lower cost of white boxes while leveraging the support and services they can offer that ODMs can’t match.
Most recently, HP officials earlier this month announced its Cloudline family of servers for cloud and hyperscale environments that are a break from the vendor’s traditional ProLiant systems.
‘White Boxes’ Help Cut Cost of Building Giant Enterprise Data Centers
The Cloudline servers are the first fruits of a partnership with Foxconn that were announced last year and feature Foxconn-built servers that are based on the OCP’s Open Rack and Open Cloud Server specifications—which set common industry interfaces for hardware and firmware while supporting open management tools. The Cloudline servers are optimized for HP’s Helion OpenStack, the company’s distribution of the open-source cloud orchestration platform.
HP’s Cloudline announcement came a month after the company announced new open switches built in partnership with ODM Accton Technologies that can run HP’s own Comware 7 OS or the Cumulus Linux operating system. The move to these new offerings made good business sense, according to HP CEO Meg Whitman.
“We have benefited by having a hyperscale offering through our joint venture with Foxconn in the server business, which led to the thesis we should have a white-box strategy for our networking business, because there are a lot of people for whom that is the solution that they prefer,” Whitman said in February during a conference call to talk about quarterly financial numbers.
“And better for us to offer it and surround with other HP product and services than walk away from that market segment entirely. We are very clear that we only play in businesses in which we can grow profitably. We have no interest in losing money in any business, and we believe…that we announced that we will make money there,” Whitman said.
HP’s efforts in open networking follow what Dell and Juniper Networks already had done. Dell introduced its Open Networking effort in early 2014, and offers switches that can run operating systems and software from a range of vendors, including Big Switch, Cumulus and Midokura, among others. Juniper’s cloud-optimized OCX1100 switch is based on OCP designs and runs Juniper’s Junos OS operating system.
The open networking offerings are part of a trend that Gartner analysts are calling “brite boxes,” which come in between traditional networking gear and white boxes. White boxes can work for hyperscale businesses like Google, which can see significant capital cost reductions of five to seven times, according to Gartner analyst Andrew Lerner.
However, for mainstream businesses and service providers, they present challenges in management, integration and support. Brite boxes offer many of the benefits of white boxes with the advantages of having a top-tier OEM behind them, such as more support and services along with less costly systems. They might not be as cheap as white boxes, but they don’t cost as much as proprietary switches.
“With Dell, you are sure of getting a lower price than a Cisco box,” Arpit Joshipura, vice president of product marketing and strategy for Dell Networking, told eWEEK, noting that a Dell Open Networking switch—which costs about 30 percent less than a Cisco switch—also comes with the vendor’s services and support. “So we can charge a premium to white boxes, but not a huge premium.”
While hyperscale players are driving the demand for white box and open switches, that will change as more enterprises look for greater flexibility and lower costs in their networks, according to John Gromala, senior director of hyperscale product management at HP.
Hyperscale deployments are “the tip of the spear,” Gromala told eWEEK. “Over time, that is expected to broaden.”
‘White Boxes’ Help Cut Cost of Building Giant Enterprise Data Centers
For companies like Pica8, the growth of brite boxes only means more business, Chai said.
“We think that is a great trend because, ultimately, that model helps us,” he said. “We want to be able to support any platform. At Pica8 ‘we don’t care, really, if the platform is from this vendor or that vendor. Our value-add comes when we bring [our products] to the hardware,” said Chai.
Not every OEM is impressed with the white boxes or brite boxes. Even though some industry observers expect vendors like Cisco and Arista eventually will embrace the brite box trend, Cisco CEO John Chambers doesn’t sound like an executive looking to move his company in that direction.
In February, after a quarter that saw sales of its Nexus 9000—the foundation of its Application Centric Architecture (ACI) initiative—grow 350 percent and the number of customers for the switch and ACI reach 1,700, Chambers declared the competition in the SDN space essentially over, with Cisco being the winner.
“We are seeing no unusual competition in the market, no unusual competition with white-label or white-box [vendors], nor will we in the future,” he said. “VMware is a competitor. We view them as a competitor. We are going to beat them as a competitor, and we will beat them and have fun doing it.”
IDC’s Stolarski said that while OEMs are looking to guard their businesses against the incursion of white boxes into the data center, ODMs also are looking to build up their weaknesses. They traditionally haven’t had strong services and support capabilities, but over the past several years, they have worked to shore up those deficiencies to enable them to better court service providers and other businesses.
“Both sides are trying to fix what they see as their gaps; so I don’t think it’s clear that one side will win out over the other,” Stolarski said.
Medallia’s Armani said Dell’s brite box offering suited his company best. The company can embrace the lower costs and flexibility that come with the Open Networking switches, while Dell’s services and support brings a level of comfort and gives Armani’s “lean” IT team the ability “to focus on our business” rather than on the hardware.
Medallia—whose SaaS technology enables customers to grab customer feedback from the Web, social sites, mobile environments and contact centers and then analyze it—currently is running the Open Networking hardware in its QA environments and in some limited test deployments.
But Medallia plans to expand its use as it opens the three new co-located data centers over the course of the year. So far, the results have been good, and Armani said he is pleased that he went with the Dell solution rather than a white-box environment.
“It was more comfortable for us to go with a tier-one supplier we could go to for support as we embark on this open networking,” he said, adding that the support was worth the extra money Medallia is paying for the Dell offering rather than going with a white-box solution.
“The price difference was significant from the traditional vendor to an open networking model, but the delta between a white-box and a tier-one vendor definitely justified the value we were getting.”