Startups played a pivotal role in disrupting the business of network switching. Today, they're on track to do the same to routing.
Software under development by upstarts Arrcus, DriveNets and Volta Networks represents a new routing architecture, industry analysts agreed. Cloud service providers, SaaS providers, telcos and the largest financial institutions are the most likely candidates for deploying the networking startups' technology in the data center and at the edge.
The vendors' software could also be useful for Peering among internet service providers and for data center interconnects (DCIs). Colocation companies like Equinix, Digital Realty Trust and Global Switch use DCIs to connect their facilities to customer data centers.
Market research firm IDC recently named the three companies 2019 innovators for their work in decoupling routing software from its underlying hardware. Separating management, control and data planes from the device make it possible to run the software on commodity products powered by Merchant silicon from companies like Broadcom and Intel.
Severing software from hardware and running it on commodity gear -- a process called disaggregation -- reduces operational expenses. Companies can lower labor costs by managing multiple routers at once, instead of each one separately. The architecture also adds flexibility by making it possible to distribute and manage physical and virtual routers across data centers or at the network edge.
"Effectively, you've got a Lego that you can mix and match based on your requirements," said Brad Casemore, an analyst at IDC. "It leads to a standardized environment where you can run the same software across all of it."
Disaggregation from switching to routing
Disaggregation in network switching, a nearly 10-year trend, forced incumbents Cisco and Juniper Networks to acquire startups that had developed software capable of providing centralized network management. The transition led to an overhaul in the way the companies' products manage switching fabrics.
New technologies developed by Arrcus, DriveNets and Volta show that there's "an evolution in disaggregation to the routing layer," Casemore said. Each of the vendors is initially targeting their products at communication and cloud service providers.
Here is a brief description of each of the networking startups, including the key differentiators and market challenges listed in the 2019 IDC Innovators report on disaggregated routing platforms:
-- Arrcus built a network operating system, called ArcOS, with extensive routing protocol support. This year, for example, the vendor incorporated the Link State Vector Routing (LSVR) protocol into ArcOS for organizations running hyperscale data centers and large cloud environments.
Arrcus has built its data plane adaptation layer to separate ArcOS from the underlying hardware. ArcOS is also the first independent NOS to support devices powered by Broadcom's Trident 3, Tomahawk 3, Jericho+ or Jericho2 network silicon. The Jericho2 platform is for 100 Gb and 400 Gb routing.
Despite its innovative technology, Arrcus still has to prove it can deliver significant cost savings and ROI. The company also has to show a simple process for buying and supporting the underlying hardware.
Arrcus, based in San Jose, Calif., has more than 60 employees and has raised $45 million in funding.
-- DriveNets developed a container-based router control plane for merchant silicon-based white boxes. Hardware manufacturers bundle the software with their products and sell it under a license that is free from capacity constraints.
The architecture provides carriers with a routing model that uses a cluster of low-cost white boxes capable of scaling to any size. DriveNets based the model on the one used in hyperscale data centers.
DriveNets' hurdles include convincing communication service providers to change how they procure, deploy and manage router infrastructure. "The adoption of the DriveNets architecture might be slowed by the need for communication service providers to redesign internal processes and management systems," IDC said.
DriveNets, based in Ra'anana, Israel, has more than 200 employees and has raised $117 million in funding.
-- Volta built a cloud-native, cloud-hosted control plane that can spin up and manage as many as 255 instances of virtual routers on a single, on-premises commodity switch. The use of switching gear provides a "significant cost advantage," while also making Volta technology useful for provider edge routing. Volta's technology could be helpful to carriers overhauling cell sites to support next-generation 5G wireless technology.
Volta's technology and its subscription model that covers support, maintenance and hardware warranty could provide significantly lower capital and operational expenses. However, as a startup, in a competitive industry, it faces a "significant challenge" in winning deals over better-known competitors with more money.
Volta, based in Cambridge, Mass., has 51 employees and has raised $3.3 million in funding.
Moving toward software-based routing
Companies with hyperscale data centers, like Amazon, Facebook, Google and Microsoft, have favored disaggregated networking software on standardized hardware for years. Today, major service providers and financial institutions use the same white box switches. Users include AT&T, Comcast, Verizon, JPMorgan Chase and Fidelity Investments.
As a result, in 2018, the share of the global Ethernet data center switching market held by Cisco and Juniper fell, while that of bare-metal switching manufacturers increased, according to IDC.
Analysts believe the same dynamics will likely play out in routing. "People are now noticing and realizing that white box approaches can work. They're mature," said Roy Chua, a principal analyst at AvidThink.
Potentially, these companies become M&A targets if they have traction in some high-value accounts.
Brad CasemoreAnalyst, IDC
Analysts expect carriers to seriously consider white box routers as they build out their network edge to deliver 5G services.
"They're actually trying to move away from [physical] routers and toward software-based routing," said Lee Doyle, principal analyst at Doyle Research. "None of this has been hugely deployed yet. But I think we're going to see significant deployments in 2020 and 2021 in the 5G market."
Routing sales for Cisco and Juniper have been declining. However, the decrease is primarily due to carriers cutting back on spending after they found they couldn't wring any more revenue from consumers, Casemore said.
But with 5G deployments on the horizon, incumbents like Cisco and Juniper are probably watching networking startups closely to see which ones are winning deals for routing technology.
"Potentially, these companies become M&A targets if they have traction in some high-value accounts," Casemore said.
