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Amazon, Facebook, Google give Cisco's switches the COLD shoulder

Microsoft and cloudy pals go DIY as networking giant's stock plummets

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'Networking is so ridiculously expensive' – Amazon exec

Clearly, Cisco will be around for a long time, but resentment has built up against the company and its contemporaries like Juniper and Brocade for maintaining high prices and high service fees at a time when the cost of storage and servers has plummeted.

Now, people working at places like Amazon are lighting the blue touch paper that could blow up core elements of Cisco's business.

"Networking is so ridiculously expensive... Look at the ratio of all servers, networking and everything - server cost is going down very rapidly and networking cost is frozen in time," says Amazon Web Services distinguished engineer James Hamilton. "What that means is ratio of costs for networking are skyrocketing."

For this reason, Amazon is building its own networking gear and software. Since then, "the price has phenomenally changed. We're now on the right glide path – it's now on a Moore's law path," he said.

Both Amazon and Facebook have also been frustrated by the slow turnaround time for getting requested features put into products. This, and undocumented features playing havoc in its facilities, motivated Facebook to start an Open Compute Project scheme to design new switches.

"Nothing in the data center stack should be immune from [the] impact of open source," says Facebook's hardware and supply chief Frank Frankovsky. "There was already a lot of pent-up demand for something like this."

Microsoft, also, has lifted its networking control features within Azure up and away from its underlying switches. Though we don't know whether Redmond is building its own hardware, we do know that it's trying to reduce its software dependency (and licensing cost) on Cisco.

Cisco's response to all of this has been the creation of "Application Centric Infrastructure" which will closely couple hardware and software together in a proprietary, obscured manner. One Cisco employee said you could possibly term the tech "hardware-defined networking".

Since some of the industry's most advanced customers – ones who deal with problems that appear at scale years before the rest of the world – are going in the opposite direction, seeking freedom where Cisco seeks control, we suspect Cisco's strategy may be borne of the necessity to support shareholders rather than punters. ®

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