Facebook's New Data Center Is Bad News for Cisco

http://www.wired.com/2014/11/facebooks-new-data-center-bad-news-cisco/

by smacktoward • 12 years ago

83 38 12 years ago

ihsw• 12 years ago

Not really. I'm sure they're happy they don't have to pour so much R&D into engineering ever-growing core switches.

They're quite aware of the trend towards decentralization. Where Facebook et al lead, other's will follow -- and Cisco will be right there to take your money to give you what Facebook has accomplished.

kordless2• 12 years ago

What's interesting is the 'decentralization' here is actually a centralization of compute for a single company, in a single location. Data gravity sucks.

adventured• 12 years ago

I've seen an awful lot of 'bad news for Cisco' type stories over the last dozen years. Cheap Chinese clones were supposed to kill them, Juniper or another domestic was going to cut deep into their business, Dell or some other enterprise company in tandem with China / Taiwan or South Korea would build generic 'good enough' products and undercut them and steal all their market share....

And yet here they are, still doing $8+ billion per year in profit, $47b in revenue, carrying $61b in cash, and maintaining substantial market share.

Facebook's new data center, and its implications, is not a meaningful concern for Cisco.

chii• 12 years ago

yep. If you're a small to medium enterprise (approx 100-1000 users), you're not going to have the expertise of facebook's engineers. It's still going to be much cheaper (in totality) to just buy cisco.

capkutay• 12 years ago

Does Facebook have a fleet of 50,000 sales people going out and selling their data center software to companies? Has anyone considered the fact that there are probably a handful of companies that can staff huge, extremely skilled developers to implement what facebook put it into place? Even if you can download it and its free and open source, most companies want someone they can call when their IT software doesn't work. Cisco isn't just a technology company. They're a giant sales and services organization.

virtualwhys• 12 years ago

They're a giant sales and services organization

Case in point: SmartNET is tech support on steroids. It's truly unfathomable how knowledgeable the person on the other end of the line is; they've been thoroughly trained in 1 particular area of Cisco networking related to the class of device you own, and without fail have the solution to your problem.

Cisco is the only company I've encountered where the support contract is laughably worth the price.

hyperbovine2• 12 years ago

Back in high school a bunch of us ran an ISP. One day it came to pass that our main Cisco router and the access switch which housed all the dial-up modems (made by a company called Shiva iirc) stopped playing nicely together, resulting in all of our dial-up users (i.e. almost every paying customer we had) not being able to log in. Needless to say, this was a problem. Fortunately for us our ISP was technically owned by the very large metropolitan school district of which we were a part, which allowed us to use their platinum-clad service contract with Cisco tech support in order to diagnose the problem. We got the Cisco guy and the Shiva guy on the phone all at once. To cut a long story short, a) the problem was with the Shiva box, b) the Cisco guy knew more about the inner workings of that box than did their (Shiva's) own tech support, and c) the Cisco guy fixed it over the phone in 5 minutes. As an impressionable 17-year old, this display of competence left quite an impression on me :)

crazypyro2• 12 years ago

It helps that they have an entire educational line of courses to build up the specific skills. I took the CCNA classes (and tutored for them at a local community college) in high school and while they do go over basic topics like 7 layer model, its highly Cisco hardware specific and it helps to have funnels like that into your support operations. It is similar to how Microsoft was (still is?) in the operating systems industry.

packetized• 12 years ago

Asking as someone with extensive familiarity with Cisco TAC, Advanced Services, et al... have you interacted with them lately? Anecdotally based on my interactions, the average knowledge level of any given set of 1st/2nd tier support engineers seems to have dropped precipitously in the past two years. Once you get to a platform-specific support group (say, the ACE group in Framingham, MA), the knowledge level is outstanding - but it also seems to have gotten much more difficult to escalate cases to that level without an extraordinary amount of effort on the part of customer engineers.

leoc• 12 years ago

Even if you can download it and its free and open source, most companies want someone they can call when their IT software doesn't work. Cisco isn't just a technology company. They're a giant sales and services organization.

This was also true of IBM back in the day, though.

es09• 12 years ago

That could be said of Microsoft in the server business as well, but Linux still managed to gain a big share. It's possible for a RedHat model to develop in networking - sell services and support, but not hardware. See Cumulus for example. (Disclaimer: I work for a Cisco competitor, but not Cumulus).

lmg643• 12 years ago

I had the fortune to speak directly with people who have been through the Cisco training program, and it is pretty rigorous. Pretty impressive how they can not just answer my question about the equipment, but put it in context with how networking "works" overall.

Regarding the Facebook move - I think it's funny how people are going to try and copy Facebook here. Facebook has a very unusual business problem they need to solve, and they are very creative and clever about solving it.

A lot of folks are going to look at Facebook from the outside, ignore the unique business problem they are solving, and say "we should insource all our network gear etc." Next thing you know they have a whole mess of new problems on their hands, support and staffing at the core. I saw this with an insourced VOIP phone system. Yes, it is cheaper but when it stops working you wind up paying for support, plus the features fall behind without care and feeding over time.

The downside for the companies that aren't Facebook (or Google, Amazon) is that you can miss out on a whole range of technology that will solve your problems just as easily, with support and the "ecosystem" to go along with it. If you don't have a unique problem (and this is part of the vanity in these decisions IMHO) then you are well served to leverage the options available.

bdunbar2• 12 years ago

Cisco isn't just a technology company. They're a giant sales and services organization.

I recall hearing that about Sun, too. Now they're just a minor cog of a database maker.

kyllo• 12 years ago

Database maker, ha. Oracle is a much bigger sales and service organization that swallowed up Sun.

hammock• 12 years ago

Scaling sales and service is one of the easier things to do. Groupon went from 10 to 10,000 employees in less than two years. About half of that sales, the other half technical

product50• 12 years ago

You are missing the point. The idea is that, as Facebook's and Google's way of managing their large networks become more popular (due to it being more efficient and less expensive), eventually all companies will move towards it. This will negate the need for the expensive Juniper and Cisco switching/router gears which the companies relies on for their revenues.

A sales team is only as good as the product they sell. They can continue to sell a product which is not competitive but only for a while before the market catches up and pushes them down. The effect will not be short term but could be long term (assuming that what article is saying is true).

new299• 12 years ago

Cisco's future maybe bleak but not because we'll all move to Facebook's and Google's model. The systems they build are at massive scale, and heavily optimized to their workflow. Cisco equipment is in general designed to handle a heterogeneous workload, in a variety of deployment scenarios.

001sky2• 12 years ago

Cisco stock has a flat to negative 10 year return (2004-2014).

Tells you everything you need to know.

Nothing has proven durable for them.

- Broadband explosion

- Two bull markets

- Social media revolution

- etc.

hyperbovine2• 12 years ago

Well, they would not be the first company to competently churn out well-engineered products year after year and fail to become the darling of the stock market. Also, I really fail to see how dialing on the social media revolution would have magically caused they stock price to rise. Start calling them "routr"s, perhaps?

001sky2• 12 years ago

The focus on the "widget engineering" is misleading. Are these the right widgets? dunno. The bigger questions are about the widget business. The stock is under-performing the market, despite major influexs of market inflation (ie, price bias), and huge shifts in the secular demand for bit-throughput.

The company has had the leading position in the widget business for a generation. But this raises questions about the future viability of the widget business if ROI is essentially zero (?).

Is the widget business inherently not-profitable? Or is the company mismanaged (outside of widget engineering?) I don't know the answers, but it seems people should be thinking about them.

The engineering teams are mostly like not the main issue. The lack of more lucrative product/market fit seems to be a perrenial issue for the higher level exevutives.

jason46• 12 years ago

Perhaps the company is poorly managed, but I can't see any company "replacing" cisco, especially in the light this article presents, show me where I can buy a google switch.

jlgaddis3• 12 years ago

How much of the enterprise and service provider market share do they have again?

kordless2• 12 years ago

"You are going to see a brutal, brutal consolidation of the IT industry where out of the top five players, only two or three of us will be meaningful in as quick as five years." - John Chambers, CEO of Cisco

http://www.businessinsider.com/cisco-ceo-brutal-times-for-it...

throwawayaway• 12 years ago

Nice to see a bit of contrarianism for once.

jobu• 12 years ago

This blog post by Alexey Andreyev goes into a lot more detail:

https://code.facebook.com/posts/360346274145943/introducing-...

blrgeek• 12 years ago

The original link needs to be replaced by this blog post. Wired has very little detail, has some details incorrect (traffic within the network is NOW more than outside the network? It always was :)

jlgaddis3• 12 years ago

It was posted a few days ago:

https://news.ycombinator.com/item?id=8609391

Alupis2• 12 years ago

This is nothing new. The "Just buy Cisco" mentality has been unnecessarily draining funds from IT departments for years. Things like a $1,300 USD Mikrotik router with 36 cors @ 1.2Ghz + 16GB ram[1] easily go toe-to-toe with "heavy-weight" $5,000-10,000+ Cisco equipment, both in features and actual throughput.

You do gain additional support when buying a "name brand" since there may be more community resources available, however you really do your company a disservice by not even considering far less expensive but equal alternatives.

[1] http://routerboard.com/CCR1036-8G-2SplusEM

scott_s• 12 years ago

I think you are being unfairly dismissive. The novelty here is not in just buying generic routers. It is in changing the architecture of their network: https://code.facebook.com/posts/360346274145943/introducing-...

jlgaddis3• 12 years ago

I'm pretty sure he didn't even RTFA.

And, related to what he wrote, yes, you can buy a more powerful Mikrotik router for less than one with the Cisco name on it. The software on 'em sucks, though, and they have some weirds things about them. Additionally, they used to flagrantly skirt around the GPL although I'm not sure if they still do.

jhallenworld• 12 years ago

Interesting that the Mikrotik router uses Tilera's interesting CPU.

$877 on Amazon: http://www.amazon.com/Mikrotik-RouterBoard-CCR1036-12G-4S-Pe...

I see EZchip bought Tilera for $130M in Sept.

Alupis2• 12 years ago

(not the same one I linked to, that one has a max throughput of 16Gbps while the one i linked to is max of 28Gbps) The one you linked to is MSRP $995 USD.

Still an incredible deal for what you get.

walterbell• 12 years ago

Not many details in this article - what defines a boundary between two "pods" and how are they internetworked?

nbm• 12 years ago

More details on the official FB announcement - https://code.facebook.com/posts/360346274145943/introducing-...

Facebook's New Data Center Is Bad News for Cisco

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