He began with a rueful acknowledgment that back in the early 70s, when creating the addressing scheme for the internet, 32 bits were enough. The point of the story — we ran out of 32-bit addresses two years ago — was to illustrate how the common knowledge at the time influenced the architectural decisions the creators of the internet made.

Yet, 40 years later, the internet is still the valuable foundation of our communications infrastructure, and Cerf hopes that in building out this next generation networks we learn a bit from the creation of the internet. For example, he calls for the creation of open standards where differentiation doesn’t come from companies patenting protocols, but rather from branding their services or branding their unique implementations of a standard protocol. That’s because interoperability is important for building networks that are stable and resilient. As Cerf said: “Stability is your friend in networking environments.”

“If you want things to interoperate, standards are important,” Cerf said. “That’s not to say you can’t explore new ideas, but when you want something big to happen then you need to think about standards.”

In that same vein, Cerf also explained how as companies build out software defined networks they should consider the things that made the internet a success: the loose coupling of the gear that underlies the internet as opposed to a heavily integrated and brittle solution; a modular approach allowing new companies to develop solutions that might work between layers in the stack; and open source solutions, which are recommended but not required.

SDN can build a web for the future.

Cerf then went into some of the opportunities that SDN can offer to improve some of the shortcomings of the internet. For example, the current way we route traffic relies on the network having a physical port to send a packet to, but the OpenFlow protocol changes the destination address from a physical port to a table entry, which enables a new type of networking. One that might be more suited to the collaborative web we’re building today.

Content based routing also could be an option — something we’ve covered at our Structure conference in 2011. In content based routing you take the content of a packet and use that to determine what to do with it. It turns routing into something that’s closer to the way Twitter works as opposed to how the U.S. Postal System does. For example you would look at the content of a packet and route it to people who said they want to receive that information. It becomes multi-cast instead of a one-to-one connection.

As for the core tenet of software defined networking, separating the control plane from the data plane, Cerf said. “I wish we had done that in the internet design, but we didn’t.”

But that also means people can build new networks that resemble older networks while sneaking in revolutionary new features. Cerf is excited about the ability of those building SDN products and networks to mimic the core functions of today’s networks in order to drive adoption but then introduce something new like content-centric routing. Or perhaps they can implement better security to protect people from identity theft, from inadvertently becoming zombies in a botnet attack or from any number of security threats that exists online.

Cerf is confident that SDN can help address those issues and more. He envisions using SDN to perhaps define areas where people can access intellectual property in a controlled manner that may prevent people from making illegal copies. SDN might also be a way to bridge the divides between different networks today.

He pointed out that when the internet was developed researchers built different networks depending on the medium, so a mobile network and a wireline network today don’t look the same to software running over those networks. You can’t run traffic seamlessly across both at the same time. With SDN you could.

He closed with a few examples of how SDN is helping Google, from its implementation of an intra-data center WAN to using software defined networks to boost the utilization of spectrum through tools like Google’s white space broadband database. This example, as well as the idea of creating a unified network using different medium, has me really excited to see what Google might do with its own fiber network and a corresponding Wi-Fi network.

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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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• The promise of SDNs in the enterprise
• Takeaways from the second quarter in cloud and data
• Cloud computing infrastructure: 2012 and beyond

In addition, Cisco can buy the start-up for upto $750 million. Insieme, which has been aggressively trying to woo engineers from its rivals, is hoping to build new kinds of switching gear to compete with current market leaders such as Arista Networks and emerging players.

Cisco has made an investment of $100 million in Insieme, an early-stage company focused on research and development in the datacenter market. It was founded by Mario Mazzola, Luca Cafiero, and Prem Jain in February 2012. Cisco also has the right to purchase the remaining interests of Insieme, with a potential payout range of up to $750 million that will be based primarily on the sales and profitability of Insieme products through Cisco. [Full Internal Cisco Memo below]

Cisco has used this concept of spin-ins before and often they involved the same three founders — Mazzola, Jain, and Cafiero. However, when I read this memo, I see a company making a tactical admission that it has become so big, so bureaucratic and so broken that it cannot count on internal teams to build any ground breaking products. The SDN memo, at least from my perspective, sends the wrong message to Cisco’s engineering corps: you are worth more outside than you are inside Cisco.

Cisco which has made a fortune from selling routers and switches should be thinking about developing next generation platforms. The fact it can’t shows that as a company it has become addicted to the old way of doing things.

Cisco boasts that nearly 70 percent of the Internet runs on its gear. Except Google and Facebook don’t use Cisco. And neither do many of the emerging web scale companies. Cisco, of course dismissed Juniper Networks and later the Chinese threat. Anyway that is a story for another day.

SDN: Evolving the Network as a Platform

2012-Apr-17

Market trends such as cloud, mobility and video and the proliferation of data highlight the vital role the network plays today. The network is no longer a cost center; it is central to revenue generation and strategy execution. This has led to an increased need for customers to have greater control over the network (and IT infrastructure, in general) paving the way for emerging trends such as software defined networking (SDN), which promises to make the network more agile, scalable, and cost-effective.

While there is debate over whether this evolution is occurring today or coming in the near future, one thing is certain: Cisco intends to lead this change.

“Cisco believes SDN is part of our vision of the intelligent network that is more open, programmable, and application aware—a vision in which the network is transformed into a more effective business enabler, says Padmasree Warrior, CTO and co-leader Engineering.

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.

“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.

Unlike any other company, Cisco is unique in its experience, expertise, and breadth to help customers evolve their networks in a phased manner, offering both innovation and investment protection.

Playing to Cisco Strengths, Priorities

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.

“SDN plays into at least two of Cisco’s top five priorities—core routing/switching and data center/virtualization/cloud,” says Warrior.

Cisco has the opportunity to shape and define the SDN market because it is still perceived as an emerging technology, Warrior says. In fact, Cisco innovation will be much deeper than just SDN.

Cisco is operating from established positions of strength, which include the scale of its operating systems, superior ASICS, unique embedded intelligence, experienced engineering expertise, and an expansive installed base—most of which has no interest in completely replacing what it has already invested in so heavily.

“When you look at the breadth of our customer base—from universities to large enterprises to Service Providers —you quickly see that there is no one-size-fits-all solution in terms of implementing SDN,” says Warrior. “So it’s a matter of ‘turning on’ this functionality in a use-case led manner that allows customers to tailor their infrastructure to business priorities, while maintaining as much investment protection as possible.”

“Many of our peers are just starting to recognize the strategic value of the network that Cisco has always articulated—and the majority of them are still at the starting line,” says Warrior. “We understand this is a marathon—not a sprint—and Cisco has the most comprehensive set of capabilities to address the emerging requirements under the SDN umbrella, better than any other company.”

Investing in SDN Through Build, Buy, Partner Strategy

Cisco’s innovation strategy continues to leverage a build, buy, partner approach. Our network programmability efforts align with this strategy.

Cisco has made an investment of $100 million in Insieme, an early-stage company focused on research and development in the datacenter market. It was founded by Mario Mazzola, Luca Cafiero, and Prem Jain in February 2012. Cisco also has the right to purchase the remaining interests of Insieme, with a potential payout range of up to $750 million that will be based primarily on the sales and profitability of Insieme products through Cisco.

Insieme’s product development efforts are complementary to that of Cisco’s current and planned internal investments. Insieme and other internal programs will be components of Cisco’s broader programmability framework. These types of investments have strongly benefitted Cisco in the past, and we will continue to look for similar ways to complement our internal development capabilities.

More details regarding Cisco’s investment in Insieme will be disclosed in Cisco’s upcoming 10Q filing in May.

Defining the Strategy

Warrior says Cisco’s SDN strategy is part of our on-going investment to ensure that the networks we deploy are the most agile, open, and programmable. This includes everything from silicon to software, as well as supporting industry-developed protocols such as OpenFlow and OpenStack.

Collaboration will be key. Cisco’s SDN strategy is led by Engineering with involvement from experts from various teams such as Network Operating Systems Technology Group (NOSTG), Data Center Group, Service Provider Architecture Group, Global Marketing and Corporate Communications (GMCC), Sales, as well as support teams from Finance and Legal. As it is tied to several of the company’s key foundational priorities, progress will be reviewed and monitored by the Operating Committee in regular quarterly business reviews.

“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.

“Cisco understands networking better than any other company,” Warrior says, noting that Cisco-built networks that power majority of the Internet today. “Whether we partner, build or buy, Cisco is well positioned to continue to lead with the evolution of SDN.”

Over the next 6-12 months, Cisco is expected to unveil its external approach with new products and solutions, including SDN capabilities that make the network more open and programmable. Stay tuned for more information on Cisco’s strategy in this space.

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• The promise of SDNs in the enterprise
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We at GigaOM talk to a lot of startups, VCs and big companies buying up cloud startups — and the some names keep coming up again and again. Some of these guys (yes, they are all guys) have specialities within infrastructure, like networking or chips, while others are particularly skilled at building companies. With the list below, we’ve picked the VCs that are doing deals and real knowledge and influence in the space. On the up-and-comers list are newer VCs and those working with very early-stage companies, which means they haven’t had any exits yet.

If you’re building an infrastructure startup, these are the guys you’d want on your team.  (They’re listed in alphabetical order.)

The tried and true.

Alex Benik: General Partner at Battery Ventures
Current deals: Cumulus Networks, VSS Monitoring and Traceltyics
Exits: Anobit, which sold to Apple and Optichron, which was acquired by Netlogic.
Our take: Networking and semiconductors are some of Benik’s favorite topics, and he also has a lot of connections into Wall Street’s IT shops where enterprise meets webscale. He’s one of the few VCs (along with others at Battery) who still invests in semiconductors.

John Connors: Partner at Ignition Partners
Current deals: Opscode, Splunk, Tier 3
Exits: Heroku, which sold to Salesforce.com, Xensource which sold to Citirx, Likewise which sold to EMC
Our take: His experience as the former CFO of Microsoft means he has business savvy and plenty of connections (he’s on the board at Nike), plus his track record in the cloud space as an investors speaks for itself.

Satish Dharmaraj: General Partner at Redpoint Ventures
Current deals: MapR, StorSimple
Exits: Cloud.com which sold to Citrix and Posterous, which was acquired by Twitter
Our take: Dharmaraj has a special affinity for where the cloud meets the consumer, especially on a mobile device. He’s also part of the team that scouts for investments that Verizon can make to populate and better its 4G network.

Peter Fenton: General Partner at Benchmark Capital
Current deals: EngineYard, New Relic, DotCloud, Twitter
Exits: SpringSource, which he sold to VMware, and JBoss, which he sold to RedHat.
Our take: Fenton is super connected, and he understands large webscale platforms better than anyone.

Ben Horowitz: General partner at Andreessen Horowitz
Current deals: Factual, Nicira, Okta
Exits: Andreesen Horowitz is new enough that Horowitz doesn’t have infrastructure exits associated with it yet, except for Fusion-io’s public offering in 2011.
Our take: He has a lot of operational experience and built a cloud company before it was cool. On top on that he has a breadth of investments that help him understand the big picture.

Ping Li: General Partner Accel Partners
Current deals: Nimble Storage, Nimbula and ScaleXtreme
Exits: Reactivity which cold to Cisco and Fusion-io which went public in 2011
Our take: Li gets webscale at the consumer level and also understands what it takes from the infrastructure side to build it. He’s also in charge of Accel’s Big Data Fund and will have a front row seat to the infrastructure requirements of the big data era.

John Vrionis: Managing director at Lightspeed Venture Partners
Current deals: Embrane, Tintri, Niciria, Boundary
Exits: IO Turbine which sold to Fusion-io and Pliant which sold to SanDisk
Our take: Vrionis has a very clear view of the changes happening in the networking world inside the data center, but he’s also thinking big thoughts on big data and the infrastructure to support it.

The up-and-comers.

Mike Abbott: Investment Partner at Kleiner Perkins
Current deals: Abbott joined KPCB in December of 2011 so we’re still waiting on his portfolio
Our take: Abbott is a practitioner who helps grow Twitter’s infrastructure and engineering team. He also helped create Palm’s next-generation webOS platform and while new at the VC game, he has connections and knowledge to help entrepreneurs find their way in a mobile and cloud world.

Puneet Agarwal: Partner at True Ventures (see disclosure)
Current deals: Puppet Labs, Loggly, Urban Airship, Piston Cloud
Our take: Agarwal is best at the ooey-gooey middle layers between the hardware and the software. Think configuration management software or PaaSes, and with he’s comfortable working at the early stages, so is a good place to start when you’re tossing around an idea.

Frank Artale: Partner at Ignition Partners
Current deals: ServiceMesh, Bromium, AppFog, ScaleXtreme
Exits: He’s only been at Ignition since 2011.
Our take: Artale is one of two Ignition Partners team members on the list. His experience building sales channels at Citrix and focus on making cool tech into a marketable product is invaluable for starry-eyed entrepreneurs who think they have something cool, but don’t know how to make money off of it.

Jonathan Heiliger: General partner at North Bridge Venture Partners
Current deals: none yet at North Bridge, but he is invested in Tango and Sonus Networks
Exits: Last.fm which sold to CBS and Contendo, which sold to Akamai
Our take: His investments remain to be seen, but when it comes to scaling infrastructure and knowing the people who know how to build at webscale, Heiliger has the contacts and the knowledge base. Plus, he’s a nice guy.

Mike Volpi: Partner at Index Ventures
Current deals: Big Switch Networks, StorSimple and Path
Exits: Cloud.com, which sold to Citrix
Our take: Volpi is not exactly and up and comer in the investment space, but he hasn’t done that many cloud deals. But as networking rises in importance we expect him to make a splash. He also knows the enterprise sales channel better than anyone else thanks to his time at Cisco.

Disclosure: Puneet Agarwal is a partner at True Ventures which is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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One is the rise of merchant silicon that can deliver the performance of custom chips made by the likes of Cisco and Juniper but at a lower cost. Another is the rise of software-defined networking, which separates the physical network infrastructure from management of that network. Finally, networks are getting bigger, and doing so faster, which is creating pressure on systems adminsitrators to find a way to scale their networks faster and buy the gear more cheaply.

Pica8, a two-year-old startup that spun out of server maker Quanta last month, hopes to become the anti-Cisco by pushing networking gear made on merchant silicon available from Broadcom, Marvell and Fulcrum. The promise of cheaper boxes is enough for some folks, but James Liao, the CEO of Pica8, has a more disruptive plan — to build software for the white-box networking gear and then open that up to the industry as a whole. It’s taking one step further the vision of Arista, which began in 2008 and puts its own software on top of boxes it builds using merchant silicon. And in the process, Pica8 will shave away at industry margins.

Liao wouldn’t disclose the price of the Pica8 boxes, but sources say they will run from 20 percent to 60 percent less than gear from Cisco, Force10 or others. Already, Pica8 has customers, including NTT communications and Baidu, as well as a strategic partner in Quanta, which is making the Pica8 boxes. Pica8 will also work with another Taiwanese or Chinese white-box maker to deliver its software to another vendor.

Liao would like to work with more, but with 15 engineers and himself, he’s strapped for resources. To help, he’s hoping to complete a $5 million round of funding in a few months that will help the company expand.

The new networking trend

Networking has been somewhat of a black box for businesses for years. The boxes contained proprietary chips known as ASICs that were able to handle the speeds required to send packets around a network, and used proprietary software that required specialized skills to program. All this specialization made networking both pricey (for customers) and profitable (for providers). But about two years ago, the chips from providers like Broadcom and Fulcrum, which Intel bought, began to match that quality and performance of the specialized ASICs made by Juniper and Cisco.

And with those chips came an opening for a change in the network. Arista picked up on it and began selling boxes built on the commodity silicon, while Google built its own switches using merchant silicon as well. With these cracks in their chip business, it became possible to build boxes that didn’t require a multi-million-dollar chip investment inside. From there, it becomes a question of software.

Commodity hardware opened up the chance for a vendor like Arista to differentiate with its software. But with OpenFlow controllers and companies like Pica8 pressuring the proprietary software running on networking gear, many companies are seeing an opportunity to get in on the ground floor of a revolution. Pica8 hopes to be one of those startups, and with backing from Quanta, which itself is disrupting the server business, it’s one to watch.

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IBM and NEC laid out some case studies of real customers using their gear inside their data centers, providing a much-needed affirmation that software-defined networking, and more importantly the OpenFlow protocol, is moving outside academia and trials. The OpenFlow protocol is a way to separate the intelligence required for routing packets in a network from the device actually doing the routing. Using the protocol, one can create a programmable network that is abstracted from the physical hardware underneath, a so-called software-defined network.

I have covered NEC’s efforts in this area and its controller, which handles the actual intelligence inside a software-defined network. IBM’s switch, which it launched last November, handles sending the packets. The two companies are working together to provide a level of hand-holding and predefined networking configurations to enterprise and corporate clients that might otherwise shy away from the nascent OpenFlow protocol and the legion of startups building opportunities around it.

On Tuesday, the two companies said that Stanford, the home of the OpenFlow protocol, is using their gear to make a programmable network campus-wide. Stanford is using the network programmability to provision bandwidth on demand for areas of campus or researchers that need it. Other companies using the IBM and NEC gear are data providers Tervela and Selerity, a financial information provider. For the most part, it sounds like IBM and NEC are trying to help explain what OpenFlow is good for: namely adding the same agility to a company’s networking operations that server virtualization has enabled for its development efforts.

This is a welcome shift from breathless coverage about the benefits of the OpenFlow protocol that dominated last year. Now we are to the point where products are out, and we will finally see what a software-defined network can do. Bandwidth on demand, prioritizing certain types of traffic so they get the most resources, and improvements in network security are all on their way — and for a fraction of the investment made in previous generations of gear.

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Guido Appenzeller (left) and Kyle Forster of Big Switch

Big Switch Networks, a startup using the OpenFlow protocol to help companies build software-defined networks, has open-sourced its controller software, dubbed Floodlight. The company, which is one of several startups trying to solve networking issues that arise from virtualization and webscale systems, said on Wednesday that it would release the source code for the controller it developed on its website and will focus on developing an ecosystem of applications around the Floodlight code.

The idea of software-defined networks gained ground in 2011 with companies such as Big Switch, Nicira, Embrane, Juniper and others promoting the concept of adding flexibility and agility to networks by making them programmable. Companies such as Juniper offer a proprietary flavor of this, while others promote the use of the open-source OpenFlow protocol. At its heart OpenFlow takes the intelligence required to move packets out of the switch, which actually moves the packets, and then puts them on commodity hardware.

That is all it does. So other companies are building controller software that gives the commodity server the intelligence to move packets around, while others are building firewalls, load balancers and other network applications that work in a software-defined environment. Big Switch wants to be one of those application companies, but first it wanted to put a controller out there so programmers could play with it and make it better. Then they could build applications on top of it. Kyle Forster, a co-founder at Big Switch, said in an interview, “Since networking is dominated by one big company we think it’s going to take a whole ecosystem to make a change.”

He likens the Floodlight controller to the MySQL code and says that’s what he hopes Big Switch can promote through its efforts and through its partners’ efforts — a solid core chunk of code that other companies can add functionality to. Floodlight is offered under the Apache 2.0 license used by other fast-growing projects such as Hadoop and OpenStack. With this news and Embrane’s release of its heleos software late last year, it looks like network engineers will have plenty to play with over the coming months. Perhaps this year is when software-defined networks will become real.

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Dante Malagrino (far right) at Structure 2011.

Embrane, the not-so-stealthy startup that’s one of several hoping to make it big on the concept of virtualizing the network, launched on Sunday. The company, founded in 2010 by Dante Malagrinò, has raised $27 million from Lightspeed Venture Partners, NEA and North Bridge Venture Partners with the goal of providing software that will deliver services over software defined networks.

The idea of software defined networks is finally coming into its own. Startups including Big Switch, Nicira, ConteXtream and large companies such as VMware, Cisco and Juniper all espouse the need to change the network to make it more flexible to gain the efficiencies the computing side of the business has already gained with virtualization. The goal is to abstract the physical elements of the network so it can keep pace with the virtual machines that spin up and down inside a virtualized environment. One way of doing this is via the Open Flow protocol, but other companies such as Cisco, Juniper and HP  are also trying out different ways of creating such a virtualized network.

The goal of any software defined network is to help companies scale their networks in line with their compute resources and reduce the need for a network engineer to manually reconfigure boxes to handle fluctuating server workloads. For more on the topic, please read our research report on software defined networks and Open Flow. (sub req’d).

In line with this new network vision, Embrane wants to provide services such as firewalls, load balancers and whatever else might be required over a software defined network. So while it can work on networks using Open Flow, it can also work on other virtualized networks. Denis Martin, the chief technology officer at hosting company, NaviSite, said his company is replacing Cisco and Citrix   load balancers and firewalls with Embrane’s software in its cloud product because Embrane’s software can scale along with the new virtual machines NaviSite’s clients spin up and down on demand.

“We have extreme density in the compute layer with 50 or 60 machines on a single blade and with 10 to 15 per customer but we still needed a dedicated firewall pair for them on each blade. So then I have five customers and 10 dedicated firewalls on a single blade,” Martin said. “[The firewalls and load balancers] were overrunning the floor space.”

Embrane’s heleos software is aimed at cloud service providers, and as Martin pointed out, it scales, unlike some of the dedicated hardware or even appliances currently available for network services. However, even with $27 million and big-name backers, Embrane is going up against some tough competition in Cisco, Citrix and other networking vendors. Its expected client base is used to buying from large vendors and might not rush to take a chance on a startup, even a startup with an executive team that comes from the established networking companies.

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Joe Weinman at GigaOM Structure 2011

The public Internet and the cloud shouldn’t mix, according to a paper out today from Joe Weinman of HP. Cisco seems to agree, if Tuesday’s announcement of its CloudVerse suite of products is any indication. A growing number of endpoints, the multiple services built within web applications, and the infinite variety of demands made on any web-based service mean the network can’t be trusted to run over the top.

The network is the cloud, so it needs to be agile, smart and billed based on usage.

Instead, the industry will need to move to pay-per-use, dynamic networks where possible to improve the economic benefits of cloud scenarios and deliver defined quality-of-service for applications that will require low latency, argues Weinman. Weinman, who moved over to HP from AT&T last year, is a deep thinker on the economics of cloud computing. He also argues that bandwidth will eventually be charged on a pay-per-use model for both consumers and enterprises.

He makes a good case for the importance of a smarter network in the context of delivering cloud services, something Cisco’s CloudVerse announcement Tuesday also supports. CloudVerse basically organizes Cisco’s existing networking products for the data center and links them back to the networking gear already in carrier and service provider networks, with the idea being that an intelligent network can take the fuzziness out of managing applications in the cloud.

Complex apps and infinite endpoints make quality of service more important.

It’s true that applications are growing more complex and relying on more protocols to deliver a variety of services over the web. Take, for example, an application like Google+. There are real-time streaming elements, a video conferencing set-up and document sharing. Each different element requires different levels of network quality, which is why Weinman argues for networks that run faster, not just on a megabit-per-second basis, but also with less latency. From the paper:

Human performance studies show that 200 to 250 milliseconds is acceptable for multimedia conferencing and collaboration applications. However, interactive tasks such as keystrokes and mousedowns must be responded to within about 150 milliseconds [10], and emerging online games require even lower latencies.
There are also empirical results showing the importance of low latency not just in terms of user experience, but in terms of revenue. Lower latency directly correlates with increased revenue [11].

Add in the complexity at the end point in terms of the number of devices that connect to the network and it gets worse. Sensor networks, plus more devices per person and more concurrent streams coming in per device (as in personal video recorders) require more bandwidth. It also requires more intelligent bandwidth that can allocate resources and deal with emergent effects like in-office or in-home congestion and odd spikes in traffic in case of unexpected events. For example, a pipe breaking in a sensor-equipped home in the middle of the afternoon when the house is empty may create a sudden spike in traffic as humidity sensors activate, power gets shut in certain areas and you check in via a home camera system to see why your home network is going crazy. But because that’s an unexpected spike in a normally dull time, will your service provider have the bandwidth capacity to meet that event?

Of course, there’s something on cloudbursting and software-defined networks.

Weinman also offers the Holy Grail of true cloudbursting as an example where adding network intelligence makes it easier to scale a workload from one data center to another in times of peak demand. He lists five ways of doing this, beginning with the simplest idea of dividing up tasks between various clouds, which requires little to no network intelligence. He concludes with a network that can push a huge amount of data as needed and very quickly, but which would require infinite bandwidth. Since this last approach is impractical, he suggests providing pay-per-use bandwidth as the easiest way to instantly replicate data while keeping costs in line.

To help deliver the type of fine-grained control that intelligent networks will need, Weinman believes software-defined networks, such as those created using protocols like OpenFlow, are a way to add intelligence and flexibility. Using open protocols to create the networks are a good way to make sure that the added intelligence doesn’t act as a way to lock in users. Weinman also covers additional topics that will require research in bringing forth these new networks for cloud computing, and I highly recommend folks check out his paper.

This sounds great; so how do we co-opt it to sell products?

So what does this have to do with Cisco’s marketing effort around CloudVerse? Essentially, with the suite of products that wrap data center networking in with the networks of service providers for wireline and mobile broadband, Cisco is recognizing that a holistic, intelligent network could be a huge selling point for those concerned about piecing together their own fragmented network elements to deliver web services and cloud services. A quote from the Cisco release sums up the news nicely:

“Until now cloud technology resided in silos, making it harder to build and manage clouds, and to interconnect multiple clouds, posing critical challenges for many organizations,” said Padmasree Warrior, Cisco senior vice president of engineering and chief technology officer. “Cisco uniquely enables the world of many clouds – connecting people, communities and organizations with a business-class cloud user experience for the next-generation Internet.”

Cisco and Weinman are not alone. Alcatel-Lucent recently outlined its vision of as service provider cloud that adds intelligence to the network in a way that many enterprise and business customers will find appealing.

Could someone build a fully functioning network without resorting to all-Cisco gear, or perhaps even Weinman’s view of the intelligent network? Yes, but it takes skill and dedication that places such as Google, Yahoo, Facebook and other webscale operators have, and other companies just don’t seem to want to bother with.

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