I was going through old blog posts and stumbled on this article where I explained my views on the state and future of the Networking Industry in Jan’17. In this article, I’d like to do the same for 2018. The year of 2017 was the year of hype, I believe 2018 is going to be a competitive year.
To start, the first specs for 5G are out. Spectrum auctions are happening. That means new players are coming and markets will be shaking, folks with better network management systems like Google will definitely make a huge investment.
Other than the chase for 5G, reducing costs and increasing revenue are still main drivers of innovation. Nothing changed there. It won’t change in the next 100 years. In 2017, we’ve seen an increasing demand for network innovations for Enterprises. This is happening due to the maturation of SDN-like technologies.
The biggest achievement of 2017 is network disaggregation started by OCP. Broadcom keeps announcing jaw-breaking specs for upcoming chipsets. Still, competition in that area looks healthy, from Mellanox, Cavium, and P4. On the OS side, Cumulus, Big Switch, SnapRoute, Arista and even OpenSwitch offer plenty of choices and are still growing steadily. Additionally, AT&T is putting an effort into an open-source OS for themselves.
I wish the industry would move towards open-source and extremely low-cost networking solutions. But, although folks want cost to be moving down, that’s not the sole priority. By embracing open-source ISPs expose themselves to risks and extra costs. It’s common for businesses to transfer risk and they are willing to pay good money for that. Enterprises are as risk-averse as ISPs.
I think there’s an opportunity for commercial support of open-source solutions. The challenge lies in finding proper incentives. Entrepreneurs have little motivation in investing in a specific technology like OpenStack or Kubernetes because it’s ephemeral, thus their incentive lies in cultivating relationships with the customer and learning the technology as necessary. Further, companies seem to find it hard to hire labor specialized in open-source projects
(some would argue Corporations are terrible at hiring in general) and end up crossing those options from the beginning. Winning players like Amazon, Google and Facebook ignore that cost and feast on those benefits by hiring skilled labor running on agile teams, increasing learning rate.
I may be wrong here, but I see Juniper is doing a strong move into software with Contrail, and even Junos Space and Cisco is still Cisco. In another word, the biggest factor ensuring market dominance is customer relationships rather than winning technology, and technology always wins in the long-term. In raw networking specs, I doubt they will catch up to BCM. Only time will tell.
All of this leads me to believe 2018 will start big changes in the industry. We won’t see these changes transform financial results until at least 2019, but I bet the winning ISPs in 2020 will be the ones who make the right technological choices now. Also, notice that the market share in the industry has not changed much in the last 5 years.