VMware and VeloCloud: A Hedge Against Hyperconvergence?

VMware announced on Thursday that they are buying VeloCloud. This was a big move in the market that immediately set off a huge discussion about the implications. I had originally thought AT&T would buy VeloCloud based on their relationship in the past, but the acquistion of Vyatta from Brocade over the summer should have been a hint that wasn’t going to happen. Instead, VMware swooped in and picked up the company for an undisclosed amount.

The conversations have been going wild so far. Everyone wants to know how this is going to affect the relationship with Cisco, especially given that Cisco put money into VeloCloud in both 2016 and 2017. Given the acquisition of Viptela by Cisco earlier this year it’s easy to see that these two companies might find themselves competing for marketshare in the SD-WAN space. However, I think that this is actually a different play from VMware. One that’s striking back at hyperconverged vendors.

Adding The Value

If you look at the marketing coming out of hyperconvergence vendors right now, you’ll see there’s a lot of discussion around platform. Fast storage, small footprints, and the ability to deploy anywhere. Hyperconverged solutions are also starting to focus on the hot new trends in compute, like containers. Along the way this means that traditional workloads that run on VMware ESX hypervisors aren’t getting the spotlight they once did.

In fact, the leading hyperconvergence vendor Nutanix has been aggressively selling their own hypervisor, Acropolis as a competitor to VMware. They tout new features and easy configuration as the major reason to use Acropolis over ESX. The push by Nutanix is to get their customers off of ESX and on to Acropolis to get a share of the VMware budget that companies are currently paying.

For VMware, it’s a tough sell to keep their customers on ESX. There’s a very big ecosystem of software out there that runs on ESX, but if you can replicate a large portion of it natively like Acropolis and other hypervisors do there’s not much of a reason to stick with ESX. And if the VMware solution is more expensive over time you will find yourself choosing the cheaper alternative when the negotiations come up for renewal.

For VMware NSX, it’s an even harder road. Most of the organizations that I’ve seen deploying hyperconverged solutions are not huge enterprises with massive centralized data centers. Instead, they are the kind small-to-medium businesses that need some functions but are very budget conscious. They’re also very geographically diverse, with smaller branch offices taking the place of a few massive headquarters locations. While NSX has some advantages for these companies, it’s not the best fit for them. NSX works optimally in a data center with high-speed links and a well-built underlay network.

vWAN with VeloCloud

So how is VeloCloud going to play into this? VeloCloud already has a lot of advantages that made them a great complement to VMware’s model. They have built-in multi tenancy. Their service delivery is virtualized. They were already looking to move toward service providers as their primary market, but network services and managed service providers. This sounds like their interests are aligning quite well with VMware already.

The key advantage for VMware with VeloCloud is how it will allow NSX to extend into the branch. Remember how I said that NSX loves an environment with a stable underlay? That’s what VeloCloud can deliver. A stable, encrypted VPN underlay. An underlay that can be managed from one central location, or in the future, perhaps even a vCenter plugin. That gives VeloCloud a huge advantage to build the underlay to get connectivity between branches.

Now, with an underlay built out, NSX can be pushed down into the branch. Branches can now use all the great features of NSX like analytics, some of which will be bolstered by VeloCloud, as well as microsegmentation and other heretofore unseen features in the branch. The large headquarters data center is now available in a smaller remote size for branches. That’s a huge advantage for organizations that need those features in places that don’t have data centers.

And the pitch against using other hypervisors with your hyperconverged solution? NSX works best with ESX. Now, you can argue that there is real value in keeping ESX on your remote branches is not costs or features that you may one day hope to use if your WAN connection gets upgraded to ludicrous speed. Instead, VeloCloud can be deployed between your HQ or main office and your remote site to bring those NSX functions down into your environment over a secure tunnel.

While this does compete a bit with Cisco from a delivery standpoint, it still doesn’t affect them with complete overlap. In this scenario, VeloCloud is a service delivery platform for NSX and not a piece of hardware at the edge. Absent VeloCloud, this kind of setup could still be replicated with a Cisco Viptela box running the underlay and NSX riding on top in the overlay. But I think that the market that VMware is going after is going to be building this from the ground up with VMware solutions from the start.


Tom’s Take

Not every issues is “Us vs. Them”. I get that VMware and Cisco seem to be spending more time moving closer together on the networking side of things. SD-WAN is a technology that was inevitably going to bring Cisco into conflict with someone. The third generation of SD-WAN vendors are really companies that didn’t have a proper offering buying up all the first generation startups. Viptela and VeloCloud are now off the market and they’ll soon be integral parts of their respective parent’s strategies going forward. Whether VeloCloud is focused on enabling cloud connectivity for VMware or retaking the branch from the hyperconverged vendors is going to play out in the next few months. But instead of focusing on conflict with anyone else, VeloCloud should be judged by the value it brings to VMware in the near term.

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Sorting Through SD-WAN

lightspeed

SD-WAN has finally arrived. We’re not longer talking about it in terms of whether or not it is a thing that’s going to happen, but a thing that will happen provided the budgets are right. But while the concept of SD-WAN is certain, one must start to wonder about what’s going to happen to the providers of SD-WAN services.

Any Which Way You Can

I’ve written a lot about SDN and SD-WAN. SD-WAN is the best example of how SDN should be marketed to people. Instead of talking about features like APIs, orchestration, and programmability, you need to focus on the right hook. Do you see a food processor by talking about how many attachments it has? Or do you sell a Swiss Army knife by talking about all the crazy screwdrivers it holds? Or do you simply boil it down to “This thing makes your life easier”?

The most successful companies have made the “easier” pitch the way forward. Throwing a kitchen sink at people doesn’t make them buy a whole kitchen. But showing them how easy and automated you can make installation and management will sell boxes by the truckload. You have to appeal the opposite nature that SD-WAN was created to solve. WANs are hard, SD-WANs make them easy.

But that only works if your SD-WAN solution is easy in the first place. The biggest, most obvious target is Cisco IWAN. I will be the first to argue that the reason that Cisco hasn’t captured the SD-WAN market is because IWAN isn’t SD-WAN. It’s a series of existing technologies that were brought together to try and make and SD-WAN competitor. IWAN has all the technical credibility of a laboratory full of parts of amazing machines. What it lacks is any kind of ability to tie all that together easily.

IWAN is a moving target. Which platform should I use? Do I need this software to make it run correctly? How do I do zero-touch deployments? Or traffic control? How do I plug a 4G/LTE modem into the router? The answers to each of these questions involves typing commands or buying additional software features. That’s not the way to attack the complexity of WANs. In fact, it feeds into that complexity even more.

Cisco needs to look at a true SD-WAN technology. That likely means acquisition. Sure, it’s going to be a huge pain to integrate an acquisition with other components like APIC-EM, but given the lead that other competitors have right now, it’s time for Cisco to come up with a solution that knocks the socks off their longtime customers. Or face the very real possibility of not having longtime customers any longer.

Every Which Way But Loose

The first-generation providers of SD-WAN bounced onto the scene to pick up the pieces from IWAN. Names like Viptela, VeloCloud, CloudGenix, Versa Networks, and more. But, aside from all managing to build roughly the same platform with very similar features, they’ve hit a might big wall. They need to start making money in order for these gambles to pay off. Some have customers. Others are managing the migration into other services, like catering their offerings toward service providers. Still others are ripe acquisition targets for companies that lack an SD-WAN strategy, like HPE or Dell. I expect to see some fallout from the first generation providers consolidating this year.

The second generation providers, like Riverbed and Silver Peak, all have something in common. They are building on a business they’ve already proven. It’s no coincidence that both Riverbed and Silver Peak are the most well-known names in WAN optimization. How well known? Even major Cisco partners will argue that they sell these two “best of breed” offerings over Cisco’s own WAAS solution. Riverbed and Silver Peak have a definite advantage because they have a lot of existing customers that rely on WAN optimization. That market alone is going to net them a significant number of customers over the next few years. They can easily sell SD-WAN as the perfect addition to make WAN optimization even easier.

The third category of SD-WAN providers is the late comers. I still can’t believe it, but I’ve been reading about providers that aren’t traditional companies trying to get into the space. Talk about being the ninth horse in an eight horse race. Honestly, at this point you’re better off plowing your investment money into something else, like Internet of Things or Virtual Reality. There’s precious little room among the existing first generation providers and the second generation stalwarts. At best, all you can hope for is a quick exit. At worst, your “novel” technology will be snapped up for pennies after you’re bankrupt and liquidating everything but the standing desks.


Tom’s Take

Why am I excited about the arrival of SD-WAN? Because now I can finally stop talking about it! In all seriousness, when the boardroom starts talking about things that means it’s past the point of being a hobby project and now has become a real debate. SD-WAN is going to change one of the most irritating aspects of networking technology for us. I can remember trying to study for my CCNP and cramming all the DSL and T1 knowledge a person could fit into a brain in my head. Now, it’s all point-and-click and done. IPSec VPNs, traffic analytics, and application identification are so easy it’s scary. That’s the power of SD-WAN to me. Easy to use and easy to extend. I think that the landscape of providers of SD-WAN technologies is going to look vastly different by the end of 2017. But SD-WAN is going to be here for the long haul.

Hypermyopia In The World Of Networking

myopia

The more debate I hear over protocols and product positioning in the networking market today, the more I realize that networking has a very big problem with myopia when it comes to building products. Sometimes that’s good. But when you can’t even see the trees for the bark, let alone the forest, then it’s time to reassess what’s going on.

Way Too Close

Sit down in a bar in Silicon Valley and you’ll hear all kinds of debates about which protocols you should be using in your startup’s project. OpenFlow has its favorite backers. Others say things like Stateless Transport Tunneling (STT) are the way to go. Still others have backed a new favorite draft protocol that’s being fast-tracked at the IETF meetings. The debates go on and on. It ends up looking a lot like this famous video.

But what does this have to do with the product? In the end, do the users really care which transport protocol you used? Is the forward table population mechanism of critical importance to them? Or are they more concerned with how the system works? How easy it is to install? How effective it is at letting them do their jobs?

The hypermyopia problem makes the architecture and engineering people on these projects focus on the wrong set of issues. They think that an elegant and perfect solution to a simple technical problem will be the magical panacea that will sell their product by the truckload. They focus on such minute sets of challenges that they often block out the real problems that their product is going to face.

Think back to IBM in the early days of the Internet. Does anyone remember Blue Lightning? How about the even older MCA Bus? I bet if I said OS/2 I’d get someone’s attention. These were all products that IBM put out that were superior to their counterparts in many ways. Faster speeds, better software architecture, and even revolutionary ideas about peripheral connection. And yet all of them failed miserably in one way or another. Was it because they weren’t technically complete? Or was it because IBM had a notorious problem with marketing and execution when it came to non-mainframe computing?

Take A Step Back

Every writer in technology uses Apple as a comparison company at some point. In this case, you should take a look at their simplicity. What protocol does FaceTime use? Is it SIP? Or H.264? Does it even matter? FaceTime works. Users like that it works. They don’t want to worry about traversing firewalls or having supernodes available. They don’t want to fiddle with settings and tweak timers to make a video call work.

Enterprise customers are very similar. Think about WAN technologies for a moment. Entire careers have been built around finding easy ways to connect multiple sites together. We debate Frame Relay versus ATM. Should we use MPLS? What routing protocol should we use? The debates go on and on. Yet the customer wants connectivity, plain and simple.

At the recent Networking Field Day 9, two companies that specialize in software defined WAN (SD-WAN) had a chance to present. Velocloud and CloudGenix both showcased their methods for creating WANs with very little need for user configuration. The delegates were impressed that the respective company’s technologies “just worked”. No tuning timers. No titanic arguments about MPLS. Just simple wizards and easy configuration.

That’s what enterprise technology should be. It shouldn’t involve a need to get so close to the technology that you lose the big picture. It shouldn’t be a series of debates about which small technology choice to make. It should just work. Users that spend less time implementing technology spend more time using it. They spend more time happy with it. And they’re more likely to buy from you again.


Tom’s Take

If I hear one more person arguing the merits of their technology favorite again, I may throw up. Every time someone comes to me and tells me that I should bet on their horse in the race because it is better or faster or more elegant, I want to grab them by the shoulders and shake some sense into them. People don’t buy complicated things. People hate elegant but overly difficult systems. They just want things to work at the end of the day. They want to put as little thought into a system as they can to maximize the return they get from it. If product managers spent the next iteration of design focusing on ease-of-use instead of picking the perfect tunneling protocol, I think they would see a huge return on their investment in the long run. And that’s something you can see no matter how close you are.