Will Dell Networking Wither Away?

chopping-block-Dell-EMC

The behemoth merger of Dell and EMC is nearing conclusion. The first week of August is the target date for the final wrap up of all the financial and legal parts of the acquisition. After that is done, the long task of analyzing product lines and finding a way to reduce complexity and product sprawl begins. We’ve already seen the spin out of Quest and Sonicwall into a separate entity to raise cash for the final stretch of the acquisition. No doubt other storage and compute products are going to face a go/no go decision in the future. But one product line which is in real danger of disappearing is networking.

Whither Whitebox?

The first indicator of the problems with Dell and networking comes from whitebox switching. Dell released OS 10 earlier this year as a way to capitalize on the growing market of free operating systems running on commodity hardware. Right now, OS 10 can run on Dell equipment. In the future, they are hoping to spread it out to whitebox devices. That assumes that soon you’ll see Dell branded OSes running on switches purchased from non-Dell sources booting with ONIE.

Once OS 10 pushes forward, what does that mean for Dell’s hardware business? Dell would naturally want to keep selling devices to customers. Whitebox switches would undercut their ability to offer cheap ports to customers in data center deployments. Rather than give up that opportunity, Dell is positioning themselves to run some form of Dell software on top of that hardware for management purposes, which has always been a strong point for Dell. Losing the hardware means little to Dell if they have to lose profit margin to keep it there in the first place.

The second indicator of networking issues comes from comments from Michael Dell at EMCworld this year. Check out this short video featuring him with outgoing EMC CEO Joe Tucci:

Some of the telling comments in here involve Michael Dell’s praise for the NSX business model and how it is being adopted by a large number of other vendors in the industry. Also telling is their reaffirmation that Cisco is an important partnership in VCE and won’t be going away any time soon. While these two things don’t seem to be related on the surface, they both point to a truth Dell is trying hard to accept.

In the future, with overlay network virtualization models gaining traction in the data center, the underlying hardware will matter little. In almost every case, the hardware choice will come down to one of two options:

  1. Which switch is the cheapest?
  2. Which switch is on the Approved List?

That’s it. That’s the whole decision tree. No one will care what sticker is on the box. They will only care that it didn’t cost a fortune and that they won’t get fired for buying it. That’s bad for companies that aren’t making white boxes or named Cisco. Other network vendors are going to try and add value in some way, but the overlay sitting on top of those bells and whistles will make it next to impossible to differentiate in anything but software. Whether that’s superior management capabilities, open plug-in model, or some other thing we haven’t thought of will make no difference in the end. Software will still be king and the hardware will be an inexpensive pawn or a costly piece that has been pre-approved.

Whither Wireless?

The other big inflection point that makes me worry about the Dell networking story is the lack of movement in the wireless space. Dell has historically been a company to partner first and acquire second. But with HPE’s acquisition of Aruba Networks last year, the dominos in the wireless space are still waiting to fall. Brocade raced out to buy Ruckus. Meru offered itself on a platter to anyone that would buy them. Now Aerohive stands as the last independent wireless vendor without a dance partner. Yes, they’ve announced that they are partnering with Dell, but have you been to the Dell Wireless Networking page? Can you guess what the Dell W-series is? Here’s a hint: it rhymes with “Peruba”.

Every time Dell leads with a W-series deployment, they are effectively paying their biggest competitor. They are opening the door to allowing HPE/Aruba to come in and not only start talking about wireless but servers, storage, and other networking as well. Dell would do well at this point to start deemphasizing the W-series and start highlighting the “new generation” of Aerohive APs and how they are going to the be the focus moving forward.

The real solution would be for Dell to buy a wireless company and take all the wireless expertise they are selling in-house. That would show they are serious about both the campus network of the future and the data center network needed to support their other server and storage infrastructure. Sadly, with Dell being leveraged due to the privatization of his company just two years ago and mounting debt for this mega merger, Dell is looking to make cash with spin offs instead of spending it on yet another company to ingest and subsume. Which means a real non-partner wireless solution is still many years away.


Tom’s Take

Dell’s networking strategy is in maintenance mode. Make switches to support faster speeds for now, probably with Tomahawk support soon, and hope that this whole networking thing goes software sooner rather than later. Otherwise, the need to shore up the campus wireless areas along with the coming decision about showing support fully behind NSX and partnerships is going to be a bitter pill to swallow. Perhaps Dell Networking will exist as an option for companies wanting a 100% Dell solution? Or maybe they are waiting for a new offering from Dell/EMC in the data center to drive profits to research and development to keep pace with Cisco and Arista? One can only hope that their networking flower doesn’t wither on the vine.

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My Thoughts on Dell, EMC, and Networking

Dell.EMC.logo.storage

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.

Does EMC Need A Network?

EMCnetwork

Network acquisitions are in the news once again. This time, the buyer is EMC. In a blog article from last week, EMC is reportedly mulling the purchase of either Brocade or Arista to add a networking component to its offerings. While Arista would be a good pickup for EMC to add a complete data center networking practice, one must ask themselves “Does EMC Really Need A Network?”

Hardware? For What?

The “smart money” says that EMC needs a network offering to help complete their vBlock offering now that the EMC/Cisco divorce is in the final stages. EMC has accelerated those plans from the server side by offering EVO:RAIL as an option for VSPEX now. Yes, VSPEX isn’t a vBlock. But it’s a flexible architecture that will eventually supplant vBlock when the latter is finally put out to pasture once the relationship between Cisco and EMC is done.

EMC being the majority partner in VCE has incentive to continue offering the package to customers to make truckloads of cash. But long term, it makes more sense for EMC to start offering alternatives to a Cisco-only network. There have been many, many assurances that vBlock will not be going away any time soon (almost to the level of “the lady doth protest too much, methinks“). But to me, that just means that the successor to vBlock will be called something different, like nBlock or eBlock.

Regardless of what the next solution is called, it will still need networking components installed in order to facilitate communication between the components in the system. EMC has been looking at networking companies in the past, especially Juniper (again with much protesting to the contrary). It’s obvious they want to have a hardware solution to offer alongside Cisco for future converged systems. But do they really need to?

How About A BriteBlock?

EMC needs a network component. NSX is a great control system that EMC already owns (and is already considering for vBlocks), but as Joe Onisick (@JOnisick) is fond of pointing out, NSX doesn’t actually forward packets. So we still need something to fling bits back and forth. But why does it have to be something EMC owns?

Whitebox switching is making huge strides toward being a data center solution. Cumulus, Pluribus, and Big Switch have created stable platforms that offer several advantages over more traditional offerings, not the least of which is cost. The ability to customize the OS to a degree is also attractive to people that want to integrate with other systems.

Could you imagine running a Cumulus switch in a vBlock and having the network forwarding totally integrated with the management platform? Or how about running Big Switch’s Big Fabric as the backplane for vBlock? These solutions would work with minimal effort on the part of EMC and very little tuning required by the end user. Add in the lowered acquistion cost of the network hardware and you end up with a slightly healthier profit margin for EMC.

Is The Answer A FaceBlock?

The other solution is to use OpenCompute Project switches in a vBlock offering. OCP is gaining momentum, with Cumulus and Big Switch both making big contributions recently at the 2015 OCP Summit. Add in the buzz around the Wedge switch and new Six Pack chassis and you have the potential to have significant network performance for a relative pittance.

Wedge and Six Pack are not without their challenges. Even running Cumulus Linux or Open Network Linux from Big Switch, it’s going to take some time to integrate the network OS with the vBlock architecture. NSX can alleviate some of these challenges, but it’s more a matter of time than technology. EMC is actually very good at taking nascent technology from startups and integrating with their product lines. Doing the same with OCP networking would not be much different from their current R&D style.

Another advantage of using OCP networking comes from the effect that EMC would have to the project. By having a major vendor embrace OCP as the spine of their architecture, Facebook gains the advantages of reduced component costs and increased development. Even if EMC doesn’t release their developments back into the community, they will attract more developers to the project and magnify the work being done. This benefits EMC as well, as every OCP addition flows back into their offerings as well.


Tom’s Take

We’re running out of big companies to buy other companies. Through consolidation and positioning, the mid-tier has grown to the point where they can’t easily be bought by anyone other than Cisco. Thanks to Aruba, HP is going to be busy with that integration until well after the company split. EMC is the last company out there that has the resources to buy someone as big as Arista or Brocade.

The question that the people at EMC need to ask themselves is: Do we really need hardware? Or can we make everything work without pulling out the checkbook? Cisco will always been an option for vBlock, just not necessarily the cheapest solution. EMC can find solutions to increase their margins, but it’s going to take some elbow grease and a few thinking caps to integrate whitebox or OCP-style offerings.

EMC does need a network. It just may not need to be one they own.