A new enterprise technology called software-defined networking is still in its infancy. But it's already created some billion-dollar success stories, capturing the imagination of Silicon Valley's savviest investors and inventors.
Consider the $1.26 billion acquisition of Nicira by VMware last summer.
Or the $176 million acquisition of Contrail Systems by Juniper Networks last month, a mere two days after Contrail came out of stealth.
Software-defined networking, or SDN, changes the way companies build their IT networks. Instead of buying expensive routers and switches with a lot of fancy features from the likes of Cisco, companies can buy simpler, cheaper hardware, and less of it, and those fancy features are handled by a new layer of software.
SDN will continue to be a hot area for startups for years. The market is projected to grow from $360 million in 2013 to $3.7 billion by 2016, according to market researcher IDC.
This has led to a whole crop of startups ready to take on market leader Cisco and cash in.
Before we get into the startups, let's take a look at the old world of networking that's getting replaced ...
Here's a look at how a typical small network is designed today. The routers and switches are at the center and everything hooks directly to them.
If you change your network, you must reconfigure your routers and switches — a sometimes difficult process.
... and the new world SDN is creating.
SDN adds a layer of software between the network hardware and the applications. If you want to change your network, you just change the software.
This creates several areas where startups can play: the "control plane," which is the new SDN software, and the "data plane" which is the hardware, like routers and switches.
On top of the control plane is another area of opportunity: networking apps. These weren't previously possible to write for proprietary networking hardware and software, but SDN opens things up for developers.
The main enabling technology today for the control plane is called OpenFlow. It was created by the founders of Nicira, a startup bought by VMware last summer.
But there are alternatives to OpenFlow, too, and startups are making money creating them.
Now let's look at the top upstarts in this market.
Big Switch Networks
Big Switch Networks was generally considered the No. 2 startup in the SDN world after Nicira, before VMware bought Nicira. It offers SDN software and switches.
Cofounder Kyle Forster was formerly a rising star at Cisco.
In October, Big Switch landed a $25 million financing round from Redpoint Ventures, Goldman Sachs, Index Ventures, and Khosla Ventures. That brought its total funding to $39 million.
Forster has close ties to Index Ventures partner Mike Volpi, who sits on the company's board. Volpi hired Forster at Cisco when he was a top executive there.
See the rest of the story at Business Insider
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