Cisco CEO to Facebook: There's room for both of us (CSCO, FB)
Business Insider
An unexpected company has been producing one game-changing innovation after another in computer networks: Facebook.
But networking giant Cisco isn't worried.
On Tuesday, at Business Insider's Ignition conference in New York, the CEO of networking giant Cisco, Chuck Robbins, said that he thought there's room for both companies.
Facebook has been inventing so many unique ways to build computer networks, it's arguably been putting the multibillion computer networking industry to shame, including market leader Cisco.
Facebook leads an organization called the Open Compute Project, where all participants give away hardware designs, and then lots of engineers can work on them and create new hardware of their own, with no fear of violating anyone's intellectual property. Contract manufacturers are standing by to produce OCP hardware.
Business InsiderFor instance, Facebook has redesigned network hardware to be more modular, where you can replace parts of it, the chips or the boards, allowing the network to be controlled with more sophisticated software. It's a trend in the network industry called software-defined networking, or SDN.
And just last month Facebook revealed designs for a very sophisticated optical switch for data centers, which uses light to transfer data instead of copper wiring achieving really high speeds. That's something that hasn't been done affordably in the data center before, Facebook says.
Robbins: This isn't 'binary'
When asked about Facebook's work, Robbins pointed out that Cisco is a member of OCP and has even participated in giving away technology to the organization. Membership in OCP is just plain necessary for Cisco. It would be foolish for Cisco to ignore the organization doing so much work in its primary business, given that its major competitors, including Arista and Hewlett Packard are involved in OCP, too.
But Robbins' view is more holistic than that. He Business Insiderdoesn't see Facebook's OCP project as a direct threat to Cisco's way of building computer network equipment, which has traditionally centered around designing custom chips (known as ASICs) that cost more, but do very specific tasks fast and well. And then including Cisco's own proprietary software, that only Cisco can modify.
"That gets into this whole discussion of hardware and software," Robbins said on stage, adding:
"This is one of those buzz discussions where hardware doesn't matter anymore. I for one having been in this business since routers were invented, I'm not sure what's going to if we don't have high performance hardware. Nothing is fundamentally changing except workloads are increasing and more video is hitting these networks.
"All of these open source activities are great and we can learn from them. We tend to be binary about these discussions, either it's that or it's not. In reality, there may be places were low-performance hardware with feature-rich software gets the job done, and that's great. Then there will be places, like the core of the internet, where high-performance hardware, with custom ASICs with high performance software is going to be needed. You can't have religion about this. You just have to provide whatever your customers need."
Cisco has made some moves to enter this SDN market itself. Its flagship switch, the biggest and fastest one that Cisco sells, has an option to use SDN software with a commodity chip. That switch, the Nexus 9000, has been selling well, Cisco says.
But there's also been controversy surrounding it, including complaints that customers that bought the software found it too difficult to install and use.
Last summer the legendary engineers that created and ran this product for Cisco left the company. They built it under the "spin-in" model espoused by Cisco's previous CEO, John Chambers. That's where Cisco funds a project as if it were a startup, then buys the startup once the product is ready.
Sources have told Business Insider that these engineers, now separate from Cisco, are working on a new startup and a new product and have been looking for investors outside of Cisco. Rumor is that they've approached Microsoft — a big participant and user of OCP hardware — to invest.
In the meantime, Robbins doesn't sound too worried.
Here's the conversation:
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