My Thoughts on Dell, EMC, and Networking

The IT world is buzzing about the news that Dell is acquiring EMC for $67 billion. Storage analysts are talking about the demise of the 800-lb gorilla of storage. Virtualization people are trying to figure out what will happen to VMware and what exactly a tracking stock is. But very little is going on in the networking space. And I think that’s going to be a place where some interesting things are going to happen.

It’s Not The Network

The appeal of the Dell/EMC deal has very little to do with networking. EMC has never had any form of enterprise networking, even if they were rumored to have been looking at Juniper a few years ago. The real networking pieces come from VMware and NSX. NSX is a pure software networking implementation for overlay networking implemented in virtualized networks.

Dell’s networking team was practically nonexistent until the Force10 acquisition. Since then there has been a lot of work in building a product to support Dell’s data center networking aspirations. Good work has been done on the hardware front. The software on the switches has had some R&D done internally, but the biggest gains have been in partnerships. Dell works closely with Cumulus Networks and Big Switch Networks to provide alternative operating systems for their networking hardware. This gives users the ability to experiment with new software on proven hardware.

Where does the synergy lie here? Based on a conversation I had on Monday there are some that believe that Cumulus is a loser in this acquisition. The idea is that Dell will begin to use NSX as the primary data center networking piece to drive overlay adoption. Companies that have partnered with Dell will be left in the cold as Dell embraces the new light and way of VMware SDN. Interesting idea, but one that is a bit flawed.

Maybe It’s The Network

Dell is going to be spending a lot of time integrating EMC and all their federation companies. Business needs to continue going forward in other areas besides storage. Dell Networking will see no significant changes in the next six months. Life goes on.

Moving forward, Dell Networking is still an integral piece of the data center story. As impressive as software networking can be, servers still need to plug into something. You can’t network a server without a cable. That means hardware is still important even at a base level. That hardware needs some kind of software to control it, especially in the NSX model without a centralized controller deciding how flows will operating on leaf switches. That means that switches will still need operating systems.

The question then shifts to whether Dell will invest heavily in R&D for expanding FTOS and PowerConnect OS or if they will double down on their partnership with Cumulus and Big Switch and let NSX do the heavy lifting above the fray. The structure of things would lead one to believe that Cumulus will get the nod here, as their OS is much more lightweight and enables basic connectivity and control of the switches. Cumulus can help Dell integrate the switch OS into monitoring systems and put more of the control of the underlay network at the fingertips of the admins.

I think Dell is going to be so busy integrating EMC into their operations that the non-storage pieces are going to be starved for development dollars. That means more reliance on partnerships in the near term. Which begets a vicious cycle that causes in-house software to fall further and further behind. Which is great for the partner, in this case Cumulus.

By putting Dell Networking into all the new offerings that should be forthcoming from a combined Dell/EMC, Dell is putting Cumulus Linux in a lot of data centers. That means familiarizing these networking folks with them more and more. Even if Dell decides not to renew the Cumulus Partnership after EMC and VMware are fully ingested it means that the install base of Cumulus will be bigger than it would have been otherwise. When those devices are up for refresh the investigation into replacing them with Cumulus-branded equipment is one that could generate big wins for Cumulus.

Tom’s Take

Dell and EMC are going to touch every facet of IT when they collide. Between the two of them they compete in almost every aspect of storage, networking, and compute as well as many of the products that support those functions. Everyone is going to face rapid consolidation from other companies banding together to challenge the new 800-lb gorilla in the space.

Networking will see less impact from this merger but it will be important nonetheless. If nothing, it will drive Cisco to start acquiring at a faster rate to keep up. It will also allow existing startups to make a name for themselves. There’s even the possibility of existing networking folks leaving traditional roles and striking out on their own to found startups to explore new ideas. The possibilities are limitless.

The Dell/EMC domino is going to make IT interesting for the next few months. I can’t wait to see how the chips will fall for everyone.

2 thoughts on “My Thoughts on Dell, EMC, and Networking

  1. Hi Tom,

    I think there might be another perspective that could arise from this deal (just an idea). What if VMware, at least the NSBU, started to develop an NOS (Network Operating System) specialised on top of Dell hardware switches on its own?

    I know they would have a lot of work to do, but the result are worth it. Actually, VMware could leverage its partnership with Dell to either mix FTOS/PowerConnectOS to address the hardware part (drivers) and add its SDN sauce on top of it ((U)DLR, (U)LS, …), building a Unified “VMNOS” or “NSXOS” or they could acquire a startup to do this faster (and in this case, the natural way would be Cumulus Networks). From a startup perspective, VMware would have to choose between the lightweight OS provided by Cumulus and the beauty of the Fabric from BSN (not sure that the scale of BSN will fit VMware’s perspective) and especially their Big Monitoring Tap (great visibility tool).

    Furthermore, the recent OpenSwitch project in which some of the top VMware NSBU’s leaders are involved in let me think that this idea is not so dumb.

    This approach would give VMware the total control of networking gears in the DC (they wouldn’t be forced to rely on partners like HP, Arista or others to have hardware and software NSX implementations). And further, they could also enter this new world of Network Hypervisor to develop L4 to L7 services on top of software AND hardware infrastructure (today broadcom chips are not suitable for deep packet inspection, you need to have x86 CPUs to do that). In this way, they would be able to enforce network and security policies in every part of the DC.

    But I totally agree with you, this may take a tremendous amount of time to consolidate all these ideas and build the best strategy for Dell/VMware networking tomorrow…

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