The worldwide Ethernet switch market grew 2%, racking up revenues of $6.29 billion in the third quarter, according to IDC’s Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker reports.
Router revenues, meantime, rose 2.6%, to $3.56 billion as enterprises and service providers beefed up their infrastructures.
Cisco continued to see erosion in its Ethernet switch market share, IDC said, with the vendor now capturing 57% of the market, down 6.5% from Q3 2015 totals. Hewlett Packard Enterprise’s switch sales also fell, but Juniper Networks and Arista Networks both saw increases in Ethernet switch sales, with Arista notching a 31.5% hike in revenues year over year. Huawei’s Ethernet switch sales almost doubled in the period; the Chinese vendor now has 7.2% of the switching market.
“Recent macro-economic developments and maturing IT architectures have led to a spectrum of reactions by IT decision-makers across the regions with regard to Ethernet switching investments in 3Q 16,” said Rohit Mehra, IDC’s vice president of network infrastructure, in a statement. “Strong growth in the 40 GbE and 100 GbE segments specific to data center deployments brought a degree of stabilization to a market in transition where the enterprise campus market for switching declined.”
40 GbE switch sales grow
IDC said 10 GbE switch sales dropped 1.3% year over year, to $2.22 billion, while 40 GbE switch revenue jumped 20%, to $756.4 million. The two Ethernet switch market standards are now being joined by an emerging 100 GbE switch market, which saw a tripling in revenues on an annualized basis in the third quarter of the year. One-GbE switch revenue dropped 4.3% year over year, IDC said.
The increase in router sales was sparked by an 8.2% increase in enterprise routing, IDC said, cautioning that the market bears close review as more companies evaluate the use of new SD-WAN technologies.
“Software-defined network architectures and network transformation for the digital economy are among the factors shaking up the core network infrastructure segments,” said Petr Jirovsky, IDC’s research manager, Worldwide Networking Trackers, in a statement.
Broadcom Ltd. Nov. 2 said it would acquire storage and networking supplier Brocade Communications Systems Inc. in a deal valued at $5.9 billion.
Chip-maker Broadcom said it will keep Brocade’s Fibre Channel and storage area networking line but will sell the company’s IP networking business, which includes routing, switching and wireless technologies that it just recently acquired from Ruckus Wireless.
“This strategic acquisition enhances Broadcom’s position as one of the leading providers of enterprise storage connectivity solutions to OEM customers,” said Hock Tan, Broadcom’s CEO, in a statement. “With deep expertise in mission-critical storage networking, Brocade increases our ability to address the evolving needs of our OEM customers. In addition, we are confident that we will find a great home for Brocade’s valuable IP networking business that will best position that business for its next phase of growth.”
Since acquiring Foundry Networks eight years ago, Brocade has struggled to carve a significant niche in the enterprise networking market. Broadcom is selling the IP business in part so that its current relationship with networking customers that buy its chips–which include Cisco and Juniper–won’t be imperiled.
Broadcom said the transaction is expected to close in mid-2017.
What does the coming decade hold in store for networking’s future?
That’s the question recently posed by a contributor on Reddit’s r/networking enterprise networking forum.
User dm18 mentioned shifts in networking that would favor software and IoT. Some of the possible changes proposed might include self-organizing networks without the need for manual configuration, cloud-based systems to automate threat response, patch management and backup. The same user projected widespread interconnection, with outdoor access points powered by built-in batteries and solar panels and interconnections between access control, cameras, climate control, lights, firearms, facial recognition and appliances.
Device density might necessitate more organized networks and eliminate large segments of home networking as telcos and large IT companies like Google step in to provide free, city-wide wireless. Managing huge quantities of data—perhaps transmitted wirelessly—might mean a new emphasis on data compression.
Some users offered up networking humor in response to the question about the future of computer networking. “In 15 years, all network gear (switches, routers, etc.) will have built in Jet Packs so that they won’t need a rack, they will just hover on jets in the designated space,” one user commented. However, others struck a more serious note, suggesting widespread mesh networking and SDN fully fulfilling its promises by 2031.
Networks will automate
“Large-budget networks will automate; small-budget networks won’t,” said user jiannone, looking to networking’s future. “Small-budget networks [will] get by on branded whiteboxes [sic] with licensing and support fees attached to low cost, high-enough throughput boxes that are more ASIC than general CPU architectures,” the user added, suggesting that today’s entertainment infrastructure may shift to IP.
User patchate brought up PCI express switching in the discussion of the future of computer networking, “It doesn’t offer any compatibility with current Ethernet-based technologies, but the underlying technology seems sound to me, at least for short-range interconnects.” The user added, enthusiastically, “If ToR switches could be replaced by PCI express lanes with CPUs having DMA access to any device installed within a rack, that would be so very incredibly awesome.”
Extreme Networks Inc. said it will purchase Zebra Technologies Corp.’s wireless LAN business for $55 million in cash to bolster its existing WLAN portfolio.
The transaction is expected to close later this year pending closing conditions and regulatory approvals.
In a blog post, Extreme CEO Ed Meyercord said Zebra’s WLAN products will be meshed with the company’s ExtremeWireless product line. Among Zebra products are a series of new access point offerings, which include a wall plate and tri-radio APs. Zebra’s wireless intrusion prevention system will also be integrated within Extreme’s products. Zebra is also known for its NSight visibility and analytics tool.
“WLAN is the fastest growing segment in the networking industry,” Meyercord said in a statement.” Our heritage of delivering innovative and pioneering technology is reinforced with today’s announcement, underscoring our commitment to providing customers worldwide with unified visibility and control across their wired and wireless networks.”
Farpoint Group principal analyst Craig Mathias said the deal will provide additional technological heft to Extreme, which will also inherit products Zebra acquired from its 2014 purchase of Motorola Solutions’ enterprise group. “They have a strong customer base and perhaps even some useful products at a bargain price,” he said.
Extreme’s purchase of Zebra’s WLAN operations comes as networking systems vendors continue to snap up wireless vendors. In the last four years, Cisco acquired Meraki, Hewlett Packard Enterprise purchased Aruba Networks, Fortinet bought Meru Networks and most recently, Brocade plunked down $1.2 billion to purchase Ruckus Wireless. Dell-EMC, meantime, struck an agreement with Aerohive Networks earlier this year to consolidate some of its products and to resell others in a bid to extend Dell’s enterprise switching business.
Cisco and IBM said they’d work together to add Big Blue’s Watson artificial intelligence and analytics technology to Cisco’s edge devices.
The alliance reflects Cisco’s strategy to push more intelligence to the edge of the network, eliminating the need to push the data to the cloud, said Mike Flannagan, Cisco’s vice president and general manager, data and analytics group.
“The combination of these technical capabilities provides the flexibility of processing and analyzing data everywhere, at the edge and in the cloud, so it can be leveraged in time and context as the business needs to use it,” he said in a blog posted today.
Cisco has been beefing up its edge and fog analytics capabilities. Late last year, the company acquired ParStream, an IoT analytics company, to allow it to better process and manage the terabytes of data generated by remote sensors and other IoT components.
Adding intelligence to the edge
The addition of Watson will layer cognitive computing on top of Cisco’s existing analytics capabilities, giving Cisco’s edge routers more agility and flexibility in how they process and direct traffic.
MachNation analyst Steve Hilton said the partnership between Cisco and IBM should benefit enterprises that are looking for ways to analyze their IoT deployments. “Often enterprises choose not to buy an IoT solution because deployment and integration of the solution is worse than a migraine headache,” he said.
Cisco said three companies–Bell Canada, the Port of Cartagena in Colombia and SilverHook Powerboats in San Diego–are among early adopters testing the technology.
Brocade said it has struck an agreement to purchase Ruckus Wireless Inc. in a stock and cash deal valued at $1.2 billion.
The transaction, expected to close later this year, will add Ruckus’ line of wireless products to Brocade’s existing enterprise networking portfolio and help let Brocade compete more aggressively with vendors like Hewlett Packard Enterprise and Fortinet, both of which acquired wireless suppliers in the past year.
HPE, in its purchase of Aruba Networks; and Fortinet, which bought Meru Networks, are eager to offer customers a complete line of networking and wireless products as more enterprises evaluate the role Wi-Fi and the wireless LAN will play in their organizations. Juniper Networks and Dell, meantime, have partnered with Aerohive Networks to resell its line of wireless gear to complement their networking products. Market leader Cisco and Extreme Networks Inc. also offer a blended line of networking and wireless products.
Brocade, in a statement, said the combined company will rank No. 1 in storage area networking and service provider Wi-Fi, and No. 3 in enterprise Wi-Fi and enterprise edge networking in the United States, European, Middle East and African markets.
Brocade also said the acquisition will also let it pursue new markets such as those emerging around 5G mobile services, Internet of Things and municipal services.
“This strategic combination will position us to expand our addressable market and technology leadership with Ruckus’ fast-growing wireless LAN products, and supports our vision to deliver market-leading new IP solutions that enable the network to become a platform for innovation,” said Lloyd Carney, chief executive officer of Brocade, in a statement.
Selina Lo, president and CEO of Ruckus, will remain with the company and report to Carney.
Thirteen networking and electronics industry suppliers said they would work together to develop a new generation of double-density quad small form-factor pluggable (QSFP) interfaces that would support speeds of up to 400 Gigabit Ethernet (GbE).
The Multi Source Agreement (MSA) Group is spearheading the effort; members include Broadcom, Brocade, Cisco, Intel, Juniper Networks and Mellanox Technologies.
The new double-density interface is being engineered to accommodate a projected spike in the demand for bandwidth that’s being fueled by more Internet users, mobile devices and machine-to-machine connections.
A Cisco Visual Networking Index Forecast, released last spring, projected that IP traffic will more than triple between 2014 and 2019, reaching 2 zettabytes, or 2 billion terabytes, by 2020.
Higher-speed lanes anchor development efforts
The new interface will build on the existing QSFP form factor, a four-lane electrical interface that allows servers and other networking devices to be connected to switches. Individual QSFP lanes now operate at 10 Gbps or 25 Gbps, enabling throughputs of 40 Gbps or 100 Gbps, respectively.
Double-density interfaces will employ eight lanes that operate at either 25 Gbps or 50 Gbps, quadrupling the aggregate to as much as 400 Gbps. This can enable up to 14.4 Tbps aggregate bandwidth in a single switch slot, MSA said.
The next-gen transceivers are being developed even as vendors like Cisco develop higher capacity ASICs. The firm’s most recent cloud-scale ASICs, for example, can support up to 36 ports of 100 GbE in a single design. As these speeds continue to increase, a higher-capacity QSFP interface is essential.
MSA said the new double-density designs will be backwards compatible to allow customers to increase network speeds without having to redesign the underlying architecture.
Cisco March 22 completed its acquisition of Internet of Things services provider Jasper Technologies Inc. and created an IoT cloud business unit to market services and technologies to carriers and enterprises.
Cisco paid $1.4 billion for Jasper, based in Santa Clara, Calif. The company provides software and tools that allow service providers and enterprises to quickly build IoT businesses.
Cisco said it will build on Jasper’s existing foundation and add new services such as IoT security and support for connectivity options that include enterprise Wi-Fi and low-power wide-area networks.
Jasper works with more than two dozen mobile operator groups—representing more than 100 mobile networks worldwide—to deliver its IoT platform to more than 3,500 enterprise customers.
Companies using its service include Coca-Cola, Microsoft, carriers AT&T and Telefónica, and automakers Tesla Motors, Nissan and General Motors.
New executives named
The creation of the IoT cloud business unit, which Jasper founder CEO Jahangir Mohammed will oversee as general manager, comes as Cisco reshuffled its engineering executives to exploit IoT and the cloud, both of which Cisco sees as massive sales and marketing opportunities.
Among the changes, Kelly Ahuja, who oversaw Cisco’s service provider business, is leaving the company, to be succeeded by Yvette Kanouff. Kanouff will be part of an expanded service provider initiative. Zorawar Biri Singh, meantime, will lead cloud services and platforms; he formerly served as Cisco’s CTO for platforms and solutions. The roles of security senior vice president David Goeckeler and applications and IoT unit senior vice president Rowan Trollope are unchanged.
Cisco Wednesday said it would purchase Israeli-based Leaba Semiconductor to beef up its chip research and development efforts.
Cisco said the acquisition–for $320 million in cash–will lay the groundwork for the next generation of switches, routers and other network components, according to Rob Salvagno, head of Cisco’s M&A and venture investing team.
“By combining Leaba’s semiconductor expertise with the Cisco engineering team, we will accelerate our plans for Cisco’s next generation product portfolio and bring new capabilities to the market faster,” he said in a blog post.
Leaba, which is still operating in stealth mode and has yet to release a product, specializes in developing new technologies and is not a manufacturer. Leaba’s management and executive team–which includes founders Eyal Dagan and CTO Ofer Eini, will report to Ravi Cherukuri, senior vice president of Cisco’s Core Hardware Group.
The Leaba purchase comes one day after Cisco acquired cloud management vendor CliQr Technologies Inc. for $260 million. Last month, Cisco bought Jasper Technologies, an IoT platform provider, for $1.4 billion.
The WAN space is becoming interesting with technologies such as VPLS (Virtual Private LAN Service), SDN (Software Defined Networks) and Hybrid WAN solutions. Over the past decade, there hasn’t been a huge advance in capability for the Enterprise. The tried and tested managed layer 3 MPLS VPN has been the staple for organisations. With QoS (Quality of Service) protecting applications and inherent inbuilt security, the reasons are pretty clear for MPLS VPN success. And, lets be clear – MPLS VPN is here to stay.
However, the market place is evolving with buzz around SDN and Hybrid services. With the buzz, a fair amount of confusion is also occurring regarding how these newer technologies may benefit the average Enterprise business. Software Defined Networking brings enhanced capability and lower cost to managed WAN and wires only services. At a high level, SDN decouples the intelligence from the device to a centralised software management platform. This has the effect of lowering the hardware cost since the device is no longer required to perform functionality other than passing traffic. The actual capability of your managed service increases as the open standard nature of SDN allows developers to create solutions out of software which is a step change from closed vendor specific capability. With so many contributors advancing SDN because of the open nature, the innovation means that SDN will evolve so much quicker than todays productised platform. There are certain WAN providers offering elements of software networking today, allowing their clients to make bandwidth and QoS changes on the fly in real time. Whilst this functionality does demonstrate a use of SDN, the overall promise is much more exciting. As an example, imagine a large Enterprise with a specific networking problem which cannot be resolved using todays capability without a great deal of non-standard support. SDN may mean a developer could be hired to create functionality which is both more supportable and simpler to install. Software will also allow devices to offer functionality which includes more granular capability. In todays networks, devices generally perform a specific role (there are exceptions). SDN will create an environment where the device will be able to perform multiple tasks drawing on the software architected by the developer. A switch with routing and deep packet inspection as an example.
Hybrid networking is fairly simple to understand in concept. A leased line is connected into your service provider network in very much the same way as any typical product today. The shift is the ability for the Enterprise to choose what technology the leased line becomes from Internet based services through to Layer 3 and Layer 2 Ethernet point to point and multipoint. The way in which providers achieve hybrid capability varies but the end result is similar in execution. An example of hybrid allows the circuit to share layer 3 VPN and Internet for remote users. This kind of functionality has been with us for a while but todays hybrid is offering access to more services.
SDN and Hybrid are set to change the world of managed WAN solutions with faster evolution of product features driven by open standards and connectivity which is capable of becoming the service required for any given site. We are not there yet but with vendors such as Cisco adopting SDN into their Nexus switch platform, the next few years should see some new products released onto the market