Great things are happening in the networking market. We’re transitioning from vertically integrated mainframe-like economics to a model similar to what we have in the server world. In the server ecosystems, we have Intel, AMD and others competing to provide the CPU. At the layer above, we have ZT Systems, HP, Dell DCS, SGI, IBM, and many others building servers based upon whichever CPU the customer choses to use. Above that layer, we have wide variety of open sources and proprietary software stacks that run on servers from any of the providers which include any of the CPU providers silicon. There is competition at all layers in the stack.
The networking world is finally heading down the right path with competing merchant silicone providers for the core data plane processing engines used in networking gear (Application Specific Integrated Circuits or ASICs). These ASICs are supplied by Broadcom, Fulcrum, Marvel, and others. A given ASIC will be built into switch gear by many competitors. Above that layer, there are open source networking protocol stacks (Quagga and Xorp) as well as ASIC independent commercial protocol stacks (IP Infusion and Ariscent) and also proprietary stacks.
This is all good news. In fact, things are moving so fast we’re already starting to see some consolidation in the industry with Broadcom acquiring Dune Networks in November 2009 and just last week Intel acquired Fulcrum Microsystems. The Intel acquisition of Fulcrum is a potentially a good thing for the industry in that Fulcrum may now have even more investment capital. However, Fulcrum were hardly starving before having been through five rounds of venture funding netting a booming $102M. Broadcom remains the biggest player in the networking merchant silicon market with a market capitalization of $19.1B.
Hopefully this major acquisition will even further ramp up the pace of innovation and competition in the networking world. I suspect it will even though it feels early for this market to be consolidating.
Related press articles:
· CNET
Related blogs:
· Andy Bechtolsheim: The March to Merchant Silicon in 10Gbe Cloud Networking
· Datacenter Networks are in My Way
–jrh
b: http://blog.mvdirona.com / http://perspectives.mvdirona.com