Why haven’t white box vendors penetrated the large enterprise market? How can they change that?

According to IDC's latest survey data, global Ethernet switch sales in 2016 increased by 3% year-on-year to $24.4 billion. This is a very large market. IDC pointed out that Arista's share in the entire data center switching market increased from zero in 2010 to 9% in 2016, making it the biggest winner in the new Ethernet switch market. IDC data shows that Cisco's market share has dropped from 80% to 58%. Huawei, Juniper and HPE all have a place in this market. The white box network switch market accounts for less than 1% of the entire network switch market.

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Back in 2013, there was a lot of talk in the industry about the disaggregation of the network switching market, that hardware would become commoditized, and that a new network software industry would emerge that would bring new opportunities for IT business leaders to create network infrastructure. Network disaggregation occurred, but it was concentrated in the hyperscale and large service provider markets. There were many options for buying network switches, running open or closed switch operating systems.

Pure white box switching companies include Agema Systems, Edgecore Networks, Pica8, IP Infusion, Foxconn Technology, Accton Technology, Celestica, Quanta Computer, Centec, etc. Users can run proprietary switch operating systems from existing manufacturers such as Arista, Cisco, Pluribus, Extreme, Juniper, HPE, Dell, Nuage and Huawei on white box switches. Some providers also package hardware switches with commercial chips and open operating systems, and some companies focus on network software running on commercial hardware, such as Big Switch, Cumulus, SnapRoute, etc. Since users have so many choices, why are white boxes not widely adopted in the large enterprise market?

For the ONUG community, most ONUG IT business leaders believe that the white box market (commercial silicon running an open switch operating system) is highly fragmented and unorganized, and therefore high risk. However, if the ecosystem of vendors demonstrates the capabilities they need, the barriers to entry for white boxes in the large enterprise market will be eliminated. The following are some high-risk factors:

Difficulty

Buying switch hardware from one company and using switch operating systems and other software functions such as monitoring, management, security, etc. from other companies is unacceptable to many IT business owners and operators. Their main concern is if they have the ability to build such a network infrastructure, and most importantly, how to achieve it on a large scale. Large enterprise IT departments have not yet invested in the skills to build and manage such an infrastructure. Take a data center as an example, with 1,000 switches from 10 to 20 hardware and software providers, all of which rely on each other to provide solutions. How to operate a data center? How difficult is it to identify faults and solve problems? Will a company's software update affect the entire system? What are the reference designs and best practices? How scalable is this model?

Service and Support

The white box market is best suited for service and support companies to solve the above problems. Dell provides service and support to its white box ecosystem partners. Companies like Red Hat can maintain version control, ensure reference design support, and provide best practice guidance. Without the service and support model of the white box market, large enterprises have limited chances of success.

In addition, many IT leaders do not understand how to integrate white box solutions into existing network infrastructure. As an ONUG community member said: "I can buy a Wedge switch, but I can't integrate it into my infrastructure and service and support system."

Company Outlook

IT business leaders are used to buying technology from startups with good company prospects. Startups may do the technology well, or they may not do it well, or they may even be acquired. The same is true for white box switch startups, but IT business leaders need to consider the development prospects of key parts of their network infrastructure.

While these barriers to entry are high, some, such as Big Switch, have found success in the large enterprise market thanks to their holistic approach to the network software stack, with a focus on monitoring plus cloud-based architectures.

The network switch market will continue to develop, and mature market players such as Arista will continue to innovate their EOS software due to API access, container versions, and CloudVision for automating NetOps tasks. Cisco recently announced its cloud scale switche, which will provide high-performance and low-cost switches. Extreme has acquired several network switch companies in an effort to expand its market share, and Juniper has also seen significant growth in its share of the network switch market.