Koruta, which I profiled last November, makes a photonics chip that allows signals to pass between chips using light (photons) instead of electrons. This makes communications between chips faster, something becoming more important inside the data center as networks become flatter, faster and fatter.

The Kotura chip is a fiber-based transceiver that can deliver 100 gigabits per second inside the data center. The transceiver could live on a board next to the CPU or inside a switch and could eventually expand to deliver a terabit per second (Tbps). Currently it’s used in high-performance compute clusters, which are also the most-popular home for Infiniband. From my post in November:

While one 1 Tbps is crazy fast when you consider that many data centers are currently upgrading to 10 gigabit Ethernet between servers, it’s going to be necessary. Arlon Martin, VP of Marketing, Government Contracts & Industry Relations at Kotura, tells me that customers are building products for the high-performance computing sectors but also for real-time data processing. The goal is bringing a low-power and less expensive optical part into a rack of servers, able to scale up to terabit per second capacities.

Kotura isn’t the only company trying to bring fiber optics into the data center. Plexxi is building fiber-based switches, while Facebook and the Open Compute Project in January announced their own plans to integrate photonics into their open hardware program. Intel, Cisco and IBM all have research or have acquired startups in this space as well. With its emphasis on fast networking, it makes sense for Mellanox to follow suit.

The company plans to continue offering the Kotura transceiver and open a research center in Monterrey Park, Calif., where Kotura is headquartered. From the Mellanox release:

“Operating networks at 100 Gigabit per second rates and higher requires careful integration between all parts of the network. We believe that silicon photonics is an important component in the development of 100 Gigabit InfiniBand and Ethernet solutions, and that owning and controlling the technology will allow us to develop the best, most reliable solution for our customers,” said Eyal Waldman, president, CEO and chairman of Mellanox Technologies.

At the time of my profile, Kotura had raised undisclosed millions from ARCH Venture Partners, Fuse Capital, GF Private Equity and others. It has an established customer base in the telecommunications business where it has sold product since 2006. But last year it began targeting the data center, where it apparently attracted Mellanox’s eye.

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The project, in a presentation by Frank Frankovsy at Interop, said it was taking a slightly different tack with its design, deciding to get input from others before actually making and releasing the hardware to the community. However, just because the hardware isn’t designed yet, Facebook isn’t going to twiddle its thumbs for a traditional multi-year design cycle. Frankovsky told me in an interview that he expects the hardware to b out in 9 to 12 months.

“We have built these islands of openness in the data center but the last element, and the one that was connecting the compute and storage, was the network,” said Frankovsky. “And there is a lot of pent-up passion out there for breaking open this appliance model.”

Networking is the last bastion of proprietary profits

Prepare to be disaggregated, switch!

For those who don’t dwell in data centers, the top-of-rack switch is the networking gear that sits on the top of a rack of servers directing traffic between those boxes and between the other racks in the data center. While the networking world is all aflutter over the promise of OpenFlow and software-defined networking, very little real progress has been made in building switches for the webscale data center.

Google, a few years back, had famously issued a request for a new type of switch that would fit its very specific scaled-out needs and no one responded. Now the search giant makes its own hardware. But soon after that, Andy Bechtolsheim saw the need for Google-like speeds and scale and started Arista, a switch company that has dominated in the webscale, financial and high-performance switching space. Meanwhile, at the lower end, Cisco’s cheaper Nexus line of switches have done really well.

Facebook’s Najam Ahmad.

Yet, these options aren’t palatable for Frankovsky or Najam Ahmad of Facebook (Ahmad will be at our Structure conference in June discussing more about Facebook’s networking strategy). On the existing product side, Frankovsky is frustrated by hardware that doesn’t play nicely at scale. He specifically mentioned that the side venting of heat on switches means he can’t place them right next to another switch. Ahmad, who is in charge of the social-networking giant’s network, is concerned about getting out of the proprietary OS model.

“We want it to be OS-agnostic so we can use one from our existing provider or build our own,” he said. He added that he’d prefer an open Linux-based implementation. These proprietary OSes — Cisco has IOS, Juniper has Junos and Arista has EOS — are one of the reasons that companies are locked into one networking gear provider. They are also stuck using proprietary code to make changes.

Who will be the Red Hat of the networking OS?

Networking cables along the ceiling at Facebook HQ.

If you are chock full of technically savvy people, losing the agility that comes from writing your own code as well as paying higher prices for the proprietary hardware and software combination is probably maddening. Hence Facebook’s interest in the open source OS. Of course, building out the underlying hardware is only the first step, the next will be supporting an OS that runs on top of that system.

While Facebook might build its own OS, not every company will want to do that, and Facebook may not open source its own networking OS if it ever makes one. That leaves a market opportunity. Perhaps a firm like Arista might move in here with an open source version of EOS, although given that Arista uses merchant silicon in its boxes, putting up an open-source version of its software would eat into its margins.

This is neither Open Flow nor SDN

But let’s go back to the box. Facebook is working with Broadcom, Intel, The Open Daylight Foundation, the Open Networking Foundation and Big Switch as some of its collaborators on this project. The box itself might run x86 hardware or a proprietary ASIC, according to Frankovsky. As for the protocols, Open Compute is going to see what the other collaborators want.

Software-defined networking

But for those wondering about Open Flow support, it’s likely. Frankovsky said that the Open Networking Foundation asked Facebook to get involved via the Open Compute Project with making open networking hardware. While Frankovsky and Ahmad didn’t cop to it, I know there has been frustration in many areas of the webscale and networking world that the promise of commodity hardware that Open Flow could offer has not really hit the market in a way that offers the most flexibility for data center operators.

Frankovsky said that the ONF approached Open Compute (Facebook is a founding member of both organizations) in part because it believed it could move quickly on this. And it will. But it’s worth noting that this announcement is about an open source top-of-rack switch, not a controller and not some type of software-defined networking play.

Other companies may take this box and perhaps an open source OS if one is developed, and then layer on some type of controller software to make a software-defined network, but this is just a box.

That being said, this is a box that could seriously disrupt the existing players in networking, from giants like Cisco and Dell all the way to smaller startups like NoviFlow or even Pica8. Much like Facebook is changing the server market with Open Compute, we’ll see if it can tweak the model and do the same in networking.

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But there’s also the question of how to measure the market or the value. Do we count the devices themselves? The dollars spent on platforms and services that tie connected devices together? What about subscriptions to wireless networks? In GE’s case it’s counting dollars saved by implementing better data gathering systems. But the whole idea of trying to measure what is fundamentally a technological shift as a market baffles me.

There’s no question the internet of things is going to be big, but to separate the reality from the hype its worth looking for hard data. If not at market size or potential profits, then let’s just try to see where people are in terms of interest in the products. For example, check out these numbers from a March Yankee Group survey of about 2,300 people.

That seems like a relatively small percent of the population planning on buying a new connected device in the next six months. And the numbers are somewhat odd, in that I don’t think even 5 percent of users are planning to buy a new smart meter –something utilities tend to provide. So I’m taking this data with a grain of salt, but I am looking for good ways to think about the market size and understand how rapidly people and companies are adopting connected devices into their homes and business processes.

This is a real trend, but it’s clear we’re still at the beginning of the massively hyped shift that will lead to real value creation. I just don’t know how to measure how much.

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Intel is showcasing its networking silicon, but it’s also offering two reference designs — one for new switches and one for new servers that would use Intel’s new chips. It’s also showing of a software layer called the Intel Data Plane Development Kit for OpenVSwitch that will accelerate packet processing on Intel’s CPUs instead of on dedicated network processors. One of the reference designs is aimed at the data center and the top of rack switches made by Cisco, Juniper, Arista and Force10 (owned by Dell), and the other is more of a punch for Cisco and Juniper in that it’s aimed at service providers. In fact, at the event Intel said Verizon was testing a prototype version of its reference design.

With these offerings, Intel is putting Broadcom, a popular maker of merchant silicon, on notice that it’s going directly after its business. That’s not surprising. The only question is how low Intel will go in pricing to put the hurt on Broadcom. But it’s also providing designs and capabilities that could obviate the need for special-purpose silicon that Cisco and Juniper currently rely on in their high-end boxes. Intel has gone after special purpose hardware before when it took on Sun and IBM in the server world with its x86 chips for personal computers.

Intel’s moves into the networking world are a symptom of the broader shift in computing. On the consumer side, mobility is changing the devices we use. In the enterprise, considerations of power consumption can now trump performance. In fact, super chips like the ones Intel traditionally sells can cause their own challenges in a virtualized world because using all of that capacity requires data center operators to virtualize the hardware and complicate their lives.

On the enterprise side the architecture to support our computing needs is changing as well as the workloads. The business considerations are changing too. This is a trend that’s shifting the ground underfoot all of the large IT vendors. So to see Intel going after its fellow chipmakers is perhaps unsurprising, but to see it going after Cisco’s and Juniper’s markets is like watching a rat resort to cannibalism during a time of starvation.

IT companies aren’t starving yet, but they are under stress, as Intel’s lackluster earnings indicate. The very real disruptions caused by a new generation of computing and web infrastructure are going to eat away at the margins and business models supporting today’s giants. Seen in this context, Intel’s moves aren’t surprising, but they are a symptom of the overall disruption in the IT world.

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Last night I attended the opening cocktail reception for a radically different ONS and had the chance to reflect on how rapidly the once-staid field of networking is changing. There were about 1,500 people registered, which was the limit of the venue. The event had grown to the Santa Clara Convention Center and attendees were a fairly even mix of suits and engineers.

The biggest change was the exhibitor section. Where in 2011 the exhibitor hall was a narrow corridor at the Stanford conference center where a little more than a dozen students, companies and non profits had set up “booths” to showcase their ideas for Open Flow, there was now a few rows of booths — most of which were quite professional.

In October 2011, I attended the show for one day and moderated a panel where I recall asking Dave Ward, who was then CTO and Chief Architect of the Platform Systems Division at Juniper, what he would do if Stuart Elby, the VP of digital architecture at Verizon, a Juniper customer, got so excited about the promise of OpenFlow and SDN that it stopped buying expensive Juniper gear.

Ward danced a bit but essentially said that Juniper had the features and expertise to pull networking gear together that Verizon would pay for. The subtext (and knowing Ward, it may have been directly stated) was that he wasn’t an idiot and he was well aware that the networking industry was shifting. But his company would figure it out.

Six months later, the same conference had grown to 700 people and had Google showing off its own networking coup — it had built a software defined network using OpenFlow that connected its data centers. And Ward was still on a panel I moderated, only now he was at Cisco: preaching the same ideas but now at a company with the resources to carry it through.

Fast forward to the opening of the summit this year on Tuesday, and I’m eager to see what awaits. All I can tell is that so far the industry has moved from the excitement of translating a new technology into a commercial endeavor — one that scored a $1.26 billion transaction when VMware purchased Nicira — to one where use cases are more common and vendor fighting has started capturing a bit of the event conversation.

Indeed, mixed among the many case studies I’ve heard so far is speculation about the vendor-led Open Daylight Foundation that includes IBM, Cisco and VMware as strange bedfellows trying to build an open source controller for the software defined data center.

Just eighteen months removed from its inaugural event, software-defined networking has clearly learned to walk — if not run.

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Last week Cisco offered an update on the beta customers using its new OnePK program to implement software-defined networking on its gear, and it’s an exercise in realpolitik that Kissinger would have admired, if Kissinger cared about networking hardware. I spoke with Dave Ward, Cisco’s CTO of Engineering (pictured above) about the network giant’s strategy, and he told me there are more than 50 beta customers using the Cisco software (and gear) to implement everything from load balancers to a cloud-based DVRs.

Cisco’s big plans tie the network to the data center

The how is more interesting than the what. Last year I wrote a post about Cisco’s strategy, saying it would focus on big vendors such as Cisco’s core service-provider customer base and that it would be open in as much as an exclusive nightclub is open. This is still true, although Cisco is supporting protocols such as OpenFlow in its gear and is also supporting all of the big hypervisors with its controller software. And remember, Cisco has a lot at stake here.

So let’s look at what Cisco has pulled together. There are two prongs in an enterprise SDN strategy — one inside the data center and one associated with traffic between data centers (or between the data center and an enterprise office). Cisco has both and has tied them together. For SDN on the wide-area network, it had purchased Carriden as the orchestration layer. Here it competes with vendors such as BTI or Alcatel-Lucent but also is solving problems similar to what Google solved with its homegrown OpenFlow network between data centers in 2011.

Inside the data center, where companies like Nicira and Big Switch are focused, Cisco has built something it calls the elastic service control. The software works on all of the popular hypervisors and can handle networking gear that doesn’t belong to Cisco. But because this is Cisco, and CEO John Chambers had warned that his plan to deal with the threat of SDN would rest in the ASIC, Cisco also had introduced new hardware containing specialty silicon.

Custom ASICs to save the day!

In many of its routers, the Cisco-design ASIC tracks data about the application running on the network and transmits that information to other routers containing that same chip. This hardware gives Cisco the ability to deliver service-level agreements and enforce rules for apps at the hardware level without IT intervention. Of course, other firms are trying to build this capability into software, but Cisco is trying to maintain its edge on the box market, so it makes sense that it wants to retain this capability in the hardware.

Its overall pitch is that is can basically wed the WAN virtualization with the data center virtualization to deliver exactly the resources an app needs when it needs it. This is a hot area with startups teaming up to offer similar capabilities or software to make this happen. The hardware containing its ASIC allows buyers with the right boxes at each end a level of control that Cisco hopes will justify the need to purchase its boxes — at least at some points in the network. And because Cisco knows that blindly shutting out all hopes of OpenFlow and cheaper gear would be crazy, it is supporting other protocols and even controllers through its orchestration software.

In Cisco’s ideal scenario, its customers will continue to buy Cisco hook, line and sinker and use it to deploy SDN. Undoubtedly some will. But what’s more likely is that customers, even those afraid to get their hands dirty messing around with complicated OpenFlow or open-source SDN controllers will buy Cisco gear like I might buy a Hermes scarf or a Gucci bag to accessorize my outfit from The Gap. Thus, they might pick up some boxes running merchant silicon and tie that into some Cisco gear.

“There isn’t going to be some flag day for a conversion to SDN,” Ward noted. And he’s aware that there will also be new and open protocols that Cisco will have to support. “It does appear that there are going to be more [protocols], and we don’t want to be trapped, waiting for them to mature,” he said. That’s why Cisco is going to support those protocols through agents on its OnePK platform. Customers will leave the engineering to Cisco, giving Cisco the opportunity to add value and keep its margins.

Will it work? That’s the $64,000 question.

However, much of this still seems like a stopgap measure that relies on service-provider customers deciding that they’d rather stick with Cisco than let their own network engineers build out products that might help lower costs. Cisco has already done a restructuring to help put its business in line with the new infrastructure realities, but my hunch is that it will have to continue adapting to a new sales environment (and style) as well as see margins erode.

Guido Appenzeller (left) and Kyle Forster of Big Switch

“They are copying the innovation that they see in the outside world, and are bringing it in,” Forster said. “But they are competing against much more open architectures that can contribute faster and offer more choice.” In Forster’s opinion, Cisco will find itself paddling like hell to keep up with the more open, software-oriented market and will fall farther and farther behind. Eventually, even the customers who want to do it themselves will see the benefits of switching over to more innovative hardware and software. Obviously, Forster is hoping that those customers will also pick up Big Switch’s software and support when they make their move.

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Midokura, an SDN startup with overlay-based software for creating load balancers and other virutal devices in Infrastructure-as-a-Service (IaaS) clouds, is closely watching the vendor-led consortium and could join depending on what happens, said Midokura’s chief strategy officer, Ben Cherian. IBM is contributing to OpenDaylight a version of the architecture underlying its virtual overlay product for connecting virtual compute and storage resources, according to the OpenDaylight announcement.

That could pose a problem for Midokura if it’s approved for inclusion in OpenDaylight, particularly if OpenDaylight code is able to do what Midokura’s does but for free. “Are they (OpenDaylight) going to be an eventual competitor? Maybe. But it’s too early to tell until we see how some of these things map out,” Cherian said.

There are similar questions about competition around OpenDaylight’s expected controller code, which Cisco and Big Switch Networks are contributing. The Cyan SDN product runs applications on top of its Blue Planet controller. Rafael Francis, senior director of service provider solutions at Cyan, said he views OpenDaylight as less of a threat and more of a validation of an open, vendor-neutral approach. At the same time, Cyan could get involved with the consortium if customers demand it, he said. Beyond that, OpenDaylight controller code could turn out to work best with Cisco gear, said Mike Bushong, vice president of technical marketing at Plexxi. In that case, developers at multiple participating companies would have to work on maintaining code.

Relations among the many companies involved in OpenDaylight looked copacetic on Monday, with no parties quitting the consortium and with even the Open Networking Foundation feeling good about the OpenDaylight premiere. Dan Pitt, its executive director, said in a statement that the organization is glad to hear that OpenDaylight will support the OpenFlow protocol.

But the relative calm is only based on what’s happened before. Jason Edelman, a solutions architect at New York-based channel partner Presidio, pointed out that only Cisco and Citrix appear to have contributed code, while others seem to be planning to do so. Unity could fracture as companies start unveiling their proposals. For example, what will VMware put forth? The official announcement doesn’t say. When that information comes to light, executives at Cisco and other sponsors might change their minds about participating.

Meanwhile there are questions about the fairness of OpenDaylight’s current organizational structure. Jo Maitland, research director for cloud and infrastructure at GigaOM Research, noted in an email that OpenDaylight “will need an elected board, much like the OpenStack Foundation, to offset the competing interests of the more powerful vendors who will throw lots of money and people to make sure the ‘standard’ evolves to suit their position.”

Although the formation of OpenDaylight seems like a significant development on its own, it ought to seen as the beginning of a story. At this rate, the middle and end will be dramatic to witness.

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Amazon and Google trade price cuts. Again

The incumbent public cloud champ and its wanna-be rival took turns cutting prices again last week.

Amazon Web Services sliced the price on Windows on-demand EC2 instances by 26  percent – although as the price still depends on region. That move came within hours of Google cutting prices of most of its GCE instances by an average of 4 percent — that little tidbit was buried in larger news that Google is opening up access to Google Compute Engine to any customer willing to pay $400 a month for Google Gold Support. But because the AWS price cuts were for Windows, that move may have been directed at Microsoft Windows Azure more than Google, but why quibble? NetworkWorld has more as does the Motley Fool.

ProfitBricks, another cloud contender, extended its scale up vs. scale out cloud pitch last week as well, making its biggest instance bigger. The new super-duper instance weighs in at 62 cores and 240GB of RAM up from 48 cores and 196GB of RAM.

“By offering variable instance sizes, which now tip the scales at 62 cores and 240GB of RAM, ProfitBricks continues to define Cloud Computing 2.0. ProfitBricks customers can now run massive computational processes at a lower cost while taking advantage of better speed and performance. It also enables users of databases and big data software to scale their virtual servers vertically rather than horizontally.

Talkin’ Cloud has more here.

When is AWS not the cheapest option? More often than you think

Over the past week several conversations with tech vendors have come around ot the fac tthat, when it comes to actual production workloads, the most cost-effective deployment model — repeated price cuts notwithstanding — is not AWS at all.

For example, the venerable analytics company SAS Institute, when it was testing out its new visual analytics tool, did so on AWS because it couldn’t deploy its own hardware fast enough. But that lasted about a month. “Amazon was way too expensive, so we brought it in-house,”  SAS CEO and founder Jim Goodnight told me in a recent interview. “Amazon doesnt’ give it away for free,” he said.

Once companies start deploying higher end services and run advanced analytics, other options are cheaper, Goodnight and his CMO and SVP Jim Davis told me.The two execs  were on a nationwide road show to show off the company’s new visual analytics service which will be widely available within months. and will eventually be available from SAS’s own data centers or via private clouds, as the New York Times reported.

If a company uses the vendor’s new visual analytics applications for six months or more,  it’s cheaper to run on SAS infrastructure rather than AWS, they said.

I was talking about this conversation last week with Buzzient CEO Timothy Jones, and he agreed wholeheartedly with that assessment that AWS if fine to get going, but less than price optimal for actual production use. AWS  is a “honey pot,” he noted. “You can get in cheap but pretty soon it’s not very cheap at all.”

I would love to hear from readers in the comment field about specific scenarios when the AWS public cloud goes from being a great cradle for new applications to a less-than-optimal site to run them.

OpenStack crowd gears up for summit

The new OpenStack Grizzly release was ready for download last week, two weeks before the OpenStack Summit kicks off in Portland, Ore. This, the seventh OpenStack release, adds better support for VMware and Hyper-V hypervisors; support for multiple storage options; and some software defined networking (SDN) perks.

As Lew Tucker, VP of cloud computing for Cisco  told InformationWeek, Grizzly’s updated  Quantum componentlets networking companies create applications that will programmatically control the underlying network based on rules and policies.

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Small cells are effectively tiny cellular base stations that offload mobile data traffic onto a wired backhaul service. Along with good old Wi-Fi, they are seen as essential to warding off the so-called mobile data crunch, as they free up capacity on the macrocells that form the basis of cellular networks. Ubiquisys is something of a leader in the field, having recently been ranked number one (ip.access was number three) by ABI Research for enterprise and residential femtocells.

Ubiquisys is also into self-optimizing network architecture (SON). It also offers a “smart cell” system called EdgeCloud, delivered in partnership with Intel, that combines server and small cell functionality to deliver cloud applications from the edge of the network, a bit like a content delivery network (CDN) for mobile rather than fixed-line surfers.

This is the third major acquisition Cisco has announced in the last four months that is aimed at boosting its portfolio for mobile carriers — in December it was Broadhop (policy management) and in January it was Intucell (SON). According to a blog post on Wednesday from Cisco business development chief Hilton Romanski, the Ubiquisys deal “complements Cisco’s mobility strategy along with the recent acquisitions of BroadHop and Intucell, reinforcing in-house research and development, such as service provider Wi-Fi and licensed radio”:

“As carriers around the world increase cellular data capacity to serve the rapidly growing population of smartphone and tablet users, adding small cells is one of the most cost-effective ways to multiply data capacity and make better use of scarce spectrum assets. Ubiquisys’ indoor small cells expertise and its focus on intelligent software for licensed 3G and LTE spectrum, coupled with Cisco’s mobility portfolio and its Wi-Fi expertise, will enable a comprehensive small cell solution to service providers that supports the transition to next generation radio access networks.”

Ovum analyst Daryl Schoolar issued a statement after the deal was announced, pointing out that Ubiquisys would give Cisco “much greater market credibility when it comes to 3G and LTE small cells” — after all, Cisco currently has one big femtocell customer in AT&T, while Ubiquisys has over 50 vendor and operator customers including Japan’s Softbank and France’s SFR.

“Cisco will also benefit by having greater control over Ubiquisys’ product development cycle, freeing Cisco from having to rely on the development cycle of third-party partners like IP access,” he added. “Small cell vendors should take Cisco very serious. Not only is Cisco greatly improving what it can offer mobile operators in terms of a licensed small cell, Cisco can also offer those mobile operators other tools, like data analytics, SON, and evolved packet core needed to build a mobile network. This isn’t something all of Cisco’s competitors can claim.”

Assuming the deal goes through, it is expected to close in the fourth quarter of this year. The Ubiquisys employees, who are based in the English town of Swindon, would join the Cisco Service Provider Mobility Group.

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