According to a SeekingAlpha.com transcript of the earnings call, CTO David Stevens said sales of the VDX switching line are accelerating and expanding. In the first year the technology was on the market, Brocade saw mostly pilot projects, but “now we’re seeing a fair number of those accounts scale out into broad production use of the technology. In fact, some of the customers [are] hitting the limits of” the original VDX architecture.

Brocade announced the VDX 8770 chassis switch this year to increase the scale of the VCS fabric.  The company now has 800 VDX customers.

“Over time, we’re going to see more scale-out production use of the technology, both… within [the] installed base where we sold the product to date but also as we gain new name accounts going forward,” Stevens said.

In its final quarter for fiscal 2012, Brocade reported $578 million in revenue, a 5% bump year-over-year.  It was a record quarter for the company, driven mostly by a robust sales in storage area network (SAN) sales. Its IP networking business declined by 3%, pushed down by routing. Switching actually grew by 5%.

During the earnings call one financial analyst, Mark Sue of RBC Capital Markets, pushed Brocade’s executives on the idea that it should focus its Ethernet business in the data center, saying “the business might benefit from some focus… Is there some thought of driving that deeper into the data center and perhaps less in the campus and less in the enterprise just because the market doesn’t seem to be growing that margin? It is very crowded.”

Jason Nolet, VP of Data Center Networking Group, said Brocade has invested substantially in its VCS fabric and its VDX switches. Investments in campus networking aren’t taking away from that data center focus, he added. Stevens, the outgoing CTO, added that investments in campus networking are relatively small compared to the investments the company has made in developing VCS and service provider networking.

Brocade started refreshing its campus networking products a year ago with the ICX 6610 series. Next year it will release HyperEdge, a campus LAN management technology that establishes a single management IP address where admins can make changes to an entire network through a single CLI session.

Stevens added that customers are starting to engage with Brocade about the need for software defined networking technology, especially for implementing network virtualization.

“I think it’s starting to gain a lot of interest,” he said. “When you think about adding another layer to the network with network virtualization, you’re going to add logical networks through tunnel technology. You’re actually adding to the overall administrative burden of that environment, because the physical infrastructure doesn’t go away. It still needs to be scaled, maintained and managed to upgrade, et cetera.”

Customers are telling Brocade that the VCS fabric’s ability to “simplify and reduce the operational overhead of that underlying transport as a result of the very high level of automation and efficiency that we’ve built into the fabric” allows them to focus more on how they’re going to deploy and run network virtualization, Stevens said.

“It also prevents them from just doubling up their operational overhead as a result of having adding that additional virtualization layer to the network environment,” he added.

Now Plexxi Inc., a stealthy, software-defined networking start-up, is emerging with a similar message. Plexxi is being vague on the details of its technology but it’s lifted the curtain on some of its marketing message this week.  It’s calling its approach to software-defined networking Affinity-Driven Networking.

Plexxi is also hinting that its software-defined networking technology extends to the physical layer of an optical network, allowing a network manager to provision bandwidth by manipulating the wavelengths of optics.

Mat Mathews, co-founder and vice president of product management at Plexxi, said his company is starting  a limited private beta with select customers who have been working closely with Plexxi on the development of its products. Mathews describes Affinity-Driven Networking as an integrated software and hardware solution consisting of a a top-of-rack network switch and a software-based controller. Although Mathews describes the product as a software-defined networking (SDN) solution, he said Plexxi is not using OpenFlow.

Plexxi customers will be able to build out an entire data center network using only the company’s top-of-rack switches and its software, although customers will have the option of integrating a network domain built with Plexxi technology into an existing legacy ntwork.

Mathews said Plexxi is looking beyond the decoupling of the control and forwarding planes that other SDN vendors champion in order to focus on a neglected issue in the data center.

“Networks are fundamentally disconnected from applications and application workloads,” he said. “We can use tools and software to understand application workloads in a data center. The first part of Affinity Networking is getting an understanding of those workloads and what they require. The second part is building a physical network that can implement these workloads exactly with the direct requirements we understand from either the orchestration tools, the applications themselves or the data center operator.”

So just how does Plexxi deliver a network that is tailored to the needs of application workloads? The company isn’t sharing too much information on that, at least until its products become generally available at the end of this year or early next year. But Mathews did drop some hints.

“We’re leveraging some optical technologies to allow flexibility in how we interconnect racks together without the overhead traditionally associated with the aggregation and core layers [of a data center network]. We can connect racks directly together and enable direct east-west capacity. Servers want to talk to each other, so our physical topologies are optimized for east-west traffic. And we use software-defined networking to flexibly orchestrate that bandwidth based on where it’s actually needed.”

Plexxi’s secret appears to focus on the physical layer of the network stack. The company is virtualizing the physical layer with optical technology somehow.

“We set out to build a network where you can ‘move the wires,’” he said. “That’s where we brought in optical technology, because we can use things like wavelengths and lambdas that are provisioned in software and say, ‘OK, this rack needs to be connected to this rack. And it doesn’t just need a 20 gigabit connection. It needs a 100 gigabit connection.’ Those kinds of dynamic capacity issues are only possible where you get down to virtualizing the physical layer. Optical technology allows us to view those physical layers as wavelengths of light.”

“We can move capacity by changing the way wavelengths of light are distributed across the network,” he said. “Therefore, we can say, ‘You need 20 gigabits now. We’ll take the 10 gigabits you’re not using over here and put it there. That’s not possible today with just a [SDN] flow table.”

The industry is waiting for Juniper to offer customer success stories with the full QFabric architecture, which includes: the QFabric Node, a top-of-rack device also known as the QFX3500; the QFabric Interconnect transport device; and the QFabric Director, which serves as the management and control plane.  This is the system that Juniper is trying to sell to the market.

And yet, the QFX3500 is also a very good top-of-rack Ethernet switch that can be deployed in a traditional data center network. Juniper hopes that some of the customers who buy the QFX3500 and use it as an Ethernet switch will eventually buy into the overall QFabric architecture, but there’s no guarantee that they will.

Given that IT organizations are eager to talk to reference customers who have deployed a full QFabric architecture, each press release about a new QFabric customer draws scrutiny. But the tech media can find it tough to parse press releases. For instance, Juniper just announced that the Hong Kong Exhanges and Clearing, Hong Kong’s stock exchange, is building a new data center with QFabric top-of-rack technology. The press release states:

Juniper Networks QFabric technology will be deployed to provide 10 Gigabit per second Ethernet (GbE) top-of-rack connectivity…

Meanwhile, the core of the network will be a “consolidated core network with traffic isolated across each system.” This sounds like a traditional network with QFX3500 switches at the server access layer. This is not a QFabric architecture.

The press release does say that this is a “carrier-class switching infrastructure based on the Juniper Networks QFabric architecture.” That does confuse the issue a bit. Is this network based on the QFabric architecture or a traditional network architecture that just happens to feature the QFX3500s that can operate in either environment?

Nowhere in the press release does Juniper mention the QFabric Interconnect or Director. This is a customer win for Juniper but it is not a QFabric win. Light Reading Asia suggests otherwise with the headline “Juniper’s QFabric Lands in Hong Kong:”

Juniper Networks has landed another QFabric customer in Asia, announcing Thursday that Hong Kong Exchanges and Clearing (HKEx) will use the platform. QFabric will be at the heart of a new data center due for completion by the third quarter of 2012, according to Juniper’s release.

It’s important to distinguish between QFabric architecture deployments and QFX3500 sales. I’m very much looking forward to talking to production QFabric customers when Juniper makes them available, but HKEx doesn’t appear to be one.

In yesterday’s first quarter 2012 earnings call, Juniper revealed the first customers who have deployed a full QFabric system. According to a transcript of the earnings call via Seeking Alpha, Stephan Dyckerhoff, Juniper’s EVP, Platform Systems, said:

We now have over 150 customers for the QFX product line, and are seeing them embrace the solution in a variety of different configurations, ranging from top-of-rack installations to full fabric deployments.

We are pleased to have the first full fabric deployments running in live production. Those deployments include Qihoo 360 in China and Australia-based Oracle [Orica]. In Q1, we also had a QFabric win in Europe at Jan Yperman hospital in Belgium. Customer feedback overall is good, and we are encouraged with the pipeline we are building.

Juniper has caught some flack in the industry for the slow roll-out of its full data center fabric and a general lack of reference customers who have deployed a full fabric. Most initial customers of QFabric have been deploying the QFX3500 as a traditional top-of-rack switch. This device operates as a “node” in a full QFabric solution. It’s reasonable to assume that all of those QFX3500 customers are at least considering a full-fabric deployment, but it’s not guaranteed.

Juniper did put me on the phone with a healthcare-focused cloud provider (Codonis) a few months ago to discuss its plans for a full-fabric QFabric installation, but that implementation was mostly in the planning stage. Juniper has also announced that Deutsche Boers (operator of the Frankfurt Stock Exchange), Thomson Reuters, Bell Canada and Terra (Brazilian online media company) are all designing full-fabric deployments of QFabric, but none of those companies have announced whether they have put the system into production yet.

The lack of North American customers with production deployments is troubling. Juniper needs reference customers that U.S. companies can talk to. Qihoo 360 is a Chinese web security software developer. Will a stateside network architect be impressed by that reference? I doubt it. Jan Yyperman Hospital is a former Nortel Networks reference customer, so I’m assuming Juniper displaced a legacy Nortel network in its data center. That could be a promising reference when it eventually gets QFabric in production. Oracle Australia is a nice win. Will Oracle adopt the technology elsewhere? Network architects will want to know. Orica is an Australian chemical company. (A transcription error by Seeking Alpha suggested Oracle is a customer).

A Goldman Sachs analyst on the earnings call asked Juniper to specify how many of its 150 QFabric customers have deployed a full fabric. Juniper Dyckeroff declined to be specific:

…[W]e have a mix of deployments for the customers who have adopted the QFX product line. They range from top-of-rack to full fabric. The reason they adopt the product line is because we have strategic alignment with them on the architecture that they want to deploy going forward. And so the focus for us is to give them a great experience as they adopt the key pieces of technology and there’s a good number of them that actually adopt the full fabric…

Juniper’s slow roll-out of QFabric has been unfortunate, especially since much of the early hype surrounding the technology has been usurped by the rise of software-defined networking. The two technology’s aren’t necessarily interchangeable, but web-scale companies and cloud providers (a sweet spot for QFabric) are looking hard at software-defined networking, which has got to be a challenge for Juniper.

But what about the technology strategy that is coalescing around Insieme and the other moves Cisco is making with software-defined networks? Shouldn’t the bigger concern be that Cisco might be making a strategic blunder?

Last week Cisco circulated an internal memo that confirmed for employees its $100-milllion investment in Insieme, the spin-in that will form part of Cisco’s “build, buy, partner” strategy for software-defined networking (SDN). The Cisco memo, published by Om Malik, claims that the networking industry hasn’t yet settled on a definition for SDN, let alone a value proposition:

Because SDN is still in its embryonic stage, a consensus has yet to be reached on its exact definition. Some equate SDN with OpenFlow or decoupling of control and data planes. Cisco’s view transcends this definition.

As Brad Casemore points out, here is Cisco’s opening salvo. It’s going to resist, or at least play down the value of, one of the core attributes of software-defined networking: the decoupling of the control and data planes. There is a little bit of cognitive dissonance with this statement. This decoupling of the control and data planes is an essential foundation of SDN. It enables centralized, flow-based networking. It enables programmability. It enables organizations to deploy third-party applications on a network through an SDN controller. But Cisco claims to transcend this idea. This vague dismissal should be troubling to SDN proponents.

The memo goes on to quote Cisco CTO Padmasree Warrior to support this notion:

“If you ask five customers what SDN means to them, you may get five different answers. Customer motivations and expectations are different based on their business problem or deployment scenario,” Warrior says.

It’s true that some people new to the subject initially perceived OpenFlow as an architecture, rather than just a protocol that enables SDN. Once they get educated on the subject, few networking pros express much confusion on the matter. However, is Cisco’s view really transcending the current SDN definition. This memo muddies the waters a bit by claiming that Cisco’s Nexus 1000v virtual switch is an example of SDN?

While SDN concepts like network virtualization may sound new, Cisco has played a leadership role in this market for many years leveraging its build, buy, partner strategy. For example, Cisco’s Nexus 1000V series switches—which provide sophisticated NX-OS networking capabilities in virtualized environment down to the virtual machine level—are built upon a controller/agent architecture, a fundamental building block of SDN solutions. With more than 5,000 customers today, Cisco has been shipping this technology for a long time.

Sure, the Nexus 1000v introduces a version of SDN to the extreme edge of a virtualized data center, but it doesn’t come close to achieving the network agility and programmability promised by software-defined networks enabled, or not enabled, by OpenFlow. What about the rest of the data center LAN, filled with physical switches that are so constrained that both the IETF and the IEEE are re-engineering Ethernet in order to eliminate a legacy protocol like spanning tree?

Proponents say that SDN has the potential to eliminate spanning tree by defining flow routes centrally in a  server-based controller, thus eliminating the risk of loops. Why upgrade to Shortest Path Bridging (SPB) or Transparent Interconnections of Lots of Links (TRILL), when an SDN network that can do it? If you want to use TRILL or SPB in your data center network today, you need to upgrade to the newest generation of your vendor’s switches, and you won’t be able to reverse course midway through. These vendors won’t play together. You can’t mix Brocade’s iteration of TRILL with Cisco’s. You can’t mix Avaya’s iteration of SPB with Cisco or Brocade. You probably wouldn’t want to mix vendors in your data center, but you also want investment protection with these new data center fabrics, don’t you? Five years from now when you need to refresh the server access layer, you’re locked into whatever vendor you’ve chosen.

You can ditch spanning tree in an OpenFlow-based SDN network using any combination of switches that support OpenFlow. Heck, Nicira Networks claims its product can get you there without even using OpenFlow switches. Just leave your legacy network in place. You know who is using OpenFlow? Google. You know who is using Nicira? eBay. Fidelity. Rackspace. NTT. Concerns about scalability with SDN may be justified, but some heavyweight companies have put it into production.

But never mind that for now. The Cisco memo expounds on the virtues of open, programmable networks (something that Arista Networks has offered for a couple years now). Toward the end, the memo lifts the veil off of Cisco’s SDN approach.

“Our strategy is to continue to offer choices to our customers so that they are not forced to go down a single path,” Warrior says. “We have a multipronged approach that goes beyond current perceptions of SDN, leveraging business-based use cases as building blocks so that we achieve architectural consistency and bring to bear the richness of all our capabilities.”

Warrior adds that Cisco already builds a lot of intelligence into its network silicon and software. Making them open and programmable will further unlock the value, while enabling further application awareness.

I will give Cisco credit here. the industry needs more “business-based use cases” for SDN. Midsized enterprises and even many large enterprises do not need SDN today. The networking pros at these smaller companies who ask me about SDN are interested in the technology, but mostly they just want to stay current with technology. They don’t need it. Today the emerging SDN market is focused on serving the needs of larger enterprises and web-scale companies. Broader business cases for the technology are years away. Many SDN start-ups are focusing on cloud providers and web giants rather than enterprises.

However, the mention of network silicon above (translation: ASICs) worries me. Here we have Cisco saying that it will make its ASICs and its software (IOS, NX-OS) open and programmable. Just how open and programmable will Cisco’s technology be? Look at this job posting for a software engineer at Cisco (It may not last long. It’s been scrubbed of certain details since I first reported its existence a couple weeks ago. This and another job posting (which disappeared from Cisco’s website a few days ago) made many references to a ConnectedApps team that is developing APIs for a software development kit (SDK) that will open up Cisco’s technology to third-party developers as part of a SDN initiative.

Just how open and programmable will an initiative based on APIs be? This doesn’t sound like an API for OpenFlow. It sounds like something else, given Cisco’s downplay of OpenFlow. APIs are a way to allow third party developers to hook their software to another vendor’s proprietary software. There’s nothing particularly open about it. SDN is about more than hooking third-party software to the edge of Cisco’s black box, whether that black box is in the form of software or an ASIC. SDN is what it is: Networks defined by software rather than hardware. How do you do that? By opening up the black box of networks and letting  engineers build their networks in new ways. There is a control plane and there is a data plane. SDN decouples them and opens up the network to a whole new world of possibilities. It’s as simple as that.

In a few years, more IT organizations will want an open, software-defined network. Cisco needs to find a way to be relevant in such a world. APIs won’t cut it.

In other words, you can pack 2,304 ports of 10 GbE into a single rack containing three BDX8 chassis. Other vendors might offer somewhat comparable density but only in an oversubscribed configuration. To get this amount of wire-speed 10 GbE ports with Cisco Nexus 7010 switches, you would need to fill six racks with 12 chassis. That’s a lot of capital expense, a lot of switches to manage and a lot of real estate in a data center. Also, note that the Nexus 7010 is a half-rack chassis. The 18-slot Nexus 7018 has higher density (768 wirespeed 10 GbE ports) but you’re only going to squeeze one of those into a single rack.

Extreme disclosed that Microsoft has been beta testing the chassis in the data center for its Executive Briefing Center in Redmond.

Prior to this release, Arista Networks’ 7508 chassis had the most impressive wire-speed port density (albeit only with 10 GbE). Arista’s 7508 packs 384 wire-speed 10 GbE ports into a chassis that is only 11 rack units with 8 I/O slots.

Then you have some of the newer data center fabrics, like Juniper’s QFabric, which you can’t really compare to the BDX8 from a pure speeds and feeds perspective, since Juniper positions an entire QFabric deployment as a single, logical switch chassis that has been exploded into scores of individual devices.

Not a lot of people need port density like this yet, let alone this kind of 40 GbE port density. And if they do need this kind of density, chances are they can live with oversubscription. While Extreme has a flashy flagship switch to show off, a lot of enterprises will be looking at Extreme’s overall network architecture, rather than just the impressive density. Cloud providers, high performance computing environments and financial services companies will give it a look. It leaves me wondering what will come next from competitors like Cisco, Dell-Force10, etc.

When I spoke to Jim Metzler about the hot networking trends to look out for at the show, he concluded our conversation with some market insight: “This is a critical Interop. The fact that Cisco is no longer BFF with HP and IBM is kind of a cloud that overhangs a lot of what’s going on.”

No doubt there is a pall cast over Cisco and its major partners as they gear up for Interop and strategize to keep their top dog status. Logic, and a memo from John Chambers himself, would dictate that Cisco will focus more on core routing and switching, as well as winning back network engineers who make up a significant percentage of the Interop attendee list. Most Cisco users and spectators, yours truly included, are willing to cut Cisco some slack despite recent problems. Any company with expectations as high as Cisco’s is bound to make some missteps, especially during an extended recession.  And, hey, I like my Flip, so I can forgive and forget. But early indicators suggest the company may not be seizing the opportunity to fully redeem itself,  instead allowing the competition to creep in and steal customers and market share.

So we’ve all had our eye on Cisco, and in the past month the company has made some interesting moves, some that seem extremely smart, and some that are just insulting to our intelligence.

Fast forward to today. This morning at Interop, Cisco CIO Rebecca Jacoby has a primo keynote slot and a chance to boost her company’s image with the folks who buy the bread and butter of its existence, networking hardware. The captive audience pensively anticipates her arrival onstage to talk about those boxes they love….Oh, wait, she isn’t talking about switches and routers. She’s talking about IT services, lots of business productivity statistics, and about someone who had a heart attack but can Facebook about it in the hospital. Huh?

Luckily this is not my first confounding keynote, so I can connect the dots here. Yes, IT shops are building private clouds that rely on networks. So networks will be a delivery platform for services, and the networking team will be responsible for meeting certain requirements for applications and service performance. And mobility and access control are important. But we have been hearing this same reasoning for years. What networking pros really want to know is how to build and troubleshoot the nuts and bolts of the network underneath. I can understand conceptually why Cisco might have chosen to talk about this, but I seriously doubt a vague romp through the land of service delivery will help to restore faith in the biggest network equipment maker in the world. Enough vendors are on the cloud/services bandwagon — can’t we get back to networking?

Not only may the Cisco keynote miss the mark on rallying the troops but it’s possible that the company’s show floor booth will  linger under a haze of gloom. Yet I predict quite another atmosphere in the booths of HP, Juniper, Brocade, and Arista, to name a few. These companies — many sporting former Cisco employees at very high levels –could capitalize even more than they already have on any weakness Cisco reveals.

HP has gained significant market share, partly due to its acquisition of 3Com, but no one can dispute its aggressive attack on the networking market. The company yesterday announced its HP Flex Network Architecture, which includes — you guessed it — actual core switches aimed at flattening the campus LAN. And Juniper’s QFabric  is being recognized as a finalist in the Best of Interop awards, as is Alcatel-Lucent for its data center switching fabric. Brocade also announced a new offering (some real live hardware components included) for building data center fabric last week.

The networking marketplace is exciting once again. Cisco may have fumbled the ball, but we should be grateful because that has opened up the field for more innovation and competition, eventually resulting in better technology and products. Attendees at Interop will be able to see the vendors duking it out live for a few days, and we’ll be following it on our Interop 2011 special coverage page.

Given the angst over the FWSM, I was surprised to see how little fanfare Cisco gave the unveiling of its new ASA (Adaptive Security Appliance) Services Module for the Catalyst 6500. It merited a one sentence reference in Cisco’s press release and just a bullet point in the slide-deck I was shown this week as Cisco rolled out a huge slate of new data center technologies. Cisco gave more publicity to a new Application Control Engine (ACE) module for the 6500 that can do dynamic load balancing of VM workloads across data centers.

The ASA Services Module has 20 Gbps of maximum firewall throughput and it supports 300,000 connections per second, 10 million concurrent connections and 1,000 VLANs. You can install four of them in a single Catalyst 6500.

It’s nice to see these new service modules for the Catalyst 6500, but customers want to see comparable products for the Nexus 7000 products. Cisco hasn’t offered any guidance on what the future holds for bringing such functionality to its newer switch line. However, Cisco has developed a Virtual Security Gateway product which runs as software on the Nexus 1010 box, a command and control appliance for the Nexus 1000v virtual switch. Perhaps Cisco plans on doing all this stuff in software rather than hardware with Nexus.

TRILL and SPB promise to solve several architectural issues in data center networks today. Extreme aims to emulate just one of the benefits of the emerging standards.  TRILL and SPB free up unused bandwidth in a network caused by spanning tree protocol (STP). STP prevents loops from forming in a network topology by closing off redundant paths. Those redundant paths only open if the primary link fails. TRILL and SPB allow all redundant links to be open, which allows Ethernet frames to take the shortest path to their destination. SPB and TRILL also allow multiple links to be in active-active mode, with data traffic aggregating across them.

Both TRILL and SPB are available today in a small amount of pre-standard products from some vendors. The use of TRILL and SPB will require hardware upgrades, so enterprises that want to benefit from the technology will have to replace their network infrastructure.

Extreme Networks has introduced a software upgrade across its switching portfolio that can give enterprises a portion of the functionality TRILL and SPB promises. And it delivers this capability without requiring new hardware.

Extreme has combined its Direct Attach Virtual Machine switching feature with its Multi-System Link Aggregation (M-LAG) feature to deliver a new “M-LAG Direct Attach” architecture. Basically, this software upgrade allows a customer to set pairs of upstream links in active-active mode, which enables upstream link aggregation.

“This provides enterprises the ability to have an active-active path in the data center today,” said Shehzad Merchant is the Senior Director of Strategy for Extreme. “Link aggregation technology has been around a long time. We’ve taken that technology and extend it. Now you can take a server with two NICs and bond those NICs with link aggregation and dual-home those into two upstream switches. If one switch or one NIC goes down, traffic automatically migrates to the second link. But if both are up, traffic aggregates across both those links.”

Unlike TRILL and SPB’s ability to work with arbitrary, multi-homed topologies, Exteme’s M-LAG Direct Attach only works with dual-homed links. M-LAG Direct Attach is also a proprietary technology, so you will need Extreme switches both upstream and downstream to make it work.

Of the 100 attendees the analysts surveyed at the show 27% said they are already converging with NAS and iSCSI, 23% are planning to use NAS and iSCSI and 32% plan to  use FCoE in the next three years. No one reported using FCoE today.

In the conversations I’ve had with data center and networking pros, it sounds like the convergence path a company takes will mostly depend on the infrastructure they already have in place. Fibre Channel shops will want to use FCoE in order to get more out of their storage area network investments. iSCSI shops will see no reason to invest in FCoE. They’ll just upgrade to lossless 10 Gigabit Ethernet and converge iSCSI and production traffic onto the same wire.