Bechtolsheim: The server is not the network
Whatever Cisco says
If you are thinking that Arista might be tempted to jump into the server racket, forget it. Yes, Bechtolsheim has a background in servers at Sun. There's his efforts to create a converged server and storage platform at Kealia that became the Constellation System. And Cisco is ramping up its "California" Unified Computing System. But Andy's not going there.
"Arista is not a server company," Bechtolsheim said with a certain amount of finality. "We want to partner with server companies."
This, of course, begs the question of why Cisco would be interested in jumping into the server business itself, at least partially alienating its server partners by offering a converged server and storage networking platform, putting Fibre Channel over Ethernet and converged network adapters inside homegrown server blades and racks. Cisco has covered its bases by offering free-standing Unified Communications products that can work with anyone's servers, and it seems intent on maintaining the 70 per cent margins it has enjoyed historically with its networking products.
The company no doubt believes that it can offer a converged server-storage-network platform, with integrated management and virtualization, and still maintain margins, or it would not have launched the California boxes. Plenty of people are skeptical, most especially the x64 server markers who know that a 20 per cent margin is about all you can get these days out of volume boxes, with blades doing a little better because of account control and integration benefits.
"People are shifting IT spending to where it is most urgent," explains Bechtolsheim, adding that this is one reason why server spending is down this year. "The other effect is that servers are getting cheaper. We may be seeing the end of the utility function. In the past, when servers got more powerful, companies used to still buy more. Now, as servers get more powerful and less expensive, companies want to spend less. This is a very dramatic downshifting of server size and server price."
By the way, it is that 70 per cent margin that Cisco loves to command that has allowed other players, like Juniper Networks, Blade Network Technologies, Arista Networks, Voltaire, Brocade Communications, and a slew of other firms to jump into the market, find niches, and get their slice of the pie. The lack of margin in the server racket is what has compelled consolidation.
While Bechtolsheim has no doubt that FCoE and converged networking for servers and storage like Cisco is pitching will happen over the long run, he is skeptical about what Cisco is trying to do.
And while he would not admit it, part of that has to be Sun's experience with the Constellation System and its integrated InfiniBand switched fabric for servers and storage. Given the bandwidth and scalability of the servers and storage, you would think this would be the preferred box for all kinds of workloads. Not that the Constellations haven't landed some big deals and help keep Sun in the game. But the silos where servers and storage sit are still real, and you have to cope with that.
"If you ask a server vendor, they will say servers are servers and networks are networks, let's not get confused," Bechtolsheim says with a laugh. "The network sale isn't really about running applications, but about network bandwidth and fixing it if it is broken. Combining these functions is not as obvious as Cisco's California makes it out to be. We cannot change something just by proclaiming that it is different. Storage managers are the most risk adverse people of anyone in the data center. And FCoE is in the early phase, and we are not aware of any production customers yet. Over time, customers will adopt it, but we are not expecting it to take the market by storm."
Bechtolsheim adds that the Nexus unified communications switches - which put Fibre Channel storage protocols on a 10GE backbone so servers link to storage on the same box as they link to each other and the outside world - are significantly more expensive than buying 10GE switches and FC switches and running them side by side. (Cisco would no doubt argue with this statement, and has. And will continue to do so). And it is academic anyway, since Arista's switches will be able to support FCoE and Converged Enhanced Ethernet (CEE) protocols as soon as the standards settle down a bit and customers start asking for them.
It may be that Cisco learns the hard way a lesson that Bechtolsheim learned with the Kealia/Constellation products. He says that in the HPC market, the interconnection fabric for the server nodes was typically sold as part of a cluster, and that InfiniBand has never been a separate distinct sale. The Ethernet connectivity market has always been completely distinct, and corporate data centers are still thinking about servers and networks as separate domains. Even when they use blade servers with switches integrated into the chassis.
There is, of course, a distinct possibility that Cisco is, in fact, correct about the convergence of servers, storage, and networks, that companies will want to have one vendor selling them an integrated system. In that case, Arista will either have to sell servers, closely ally itself with server makers, or get eaten by a server maker. It will be interesting to see what happens. ®