Amazon Web Services may throw its considerable weight into the white box ring, which could have large implications for Cisco and other vendors.
Amazon is currently testing white box switches that connect directly to its cloud services, such as servers and storage, according to an article posted Friday by The Information. Amazon Web Services (AWS) would sell its own white box switches to its business customers at price points that would be 70% to 80% lower than comparable switches from Cisco, The Information said, citing a person that was familiar with the program.
White boxes allow carriers, cloud providers and enterprises the ability to lower the cost of ownership by combining generic switch hardware with open source software. By being able to buy white boxes off the shelf, telcos not only pay less but also gain operational efficiencies such as flexibility and scalability.
By using the white boxes, AWS customers could more easily connect private clouds to AWS' public cloud to create a hybrid cloud environment. The white boxes could also serve as a means for AWS to further lock in business customers to its cloud services.
AWS could start offering its own white box switches over the next 18 months, according to The Information. AWS is working with white-box vendors Celestica, Edge Networks and Delta Network, and is also looking for more vendor partners.
While AWS is making a more concerted push into networking, "security and networking workloads take more support and drive less compute consumption so (I'm) not sure how long they will stay interested," a service provider employee commented on background to FierceTelecom, who added that white boxes were a "natural place for them to drive out margin."
"(It will be) interesting to see if they can get cost versus performance at higher throughput. I am guessing they will get there," they added.
Microsoft Azure the true competitor?
Cisco's shares dropped 5% on Friday, while shares of switch vendors Juniper Networks and Arista Networks both dropped 4% as investors expressed their concern that AWS' market power would cause upheaval in the sector.
During last month's Cisco Live event, Cisco CEO Chuck Robbins said that his company hadn't "seen massive scale production deployments of that model" when asked about white boxes. But with AWS being the top cloud provider that could change if it goes through with selling its own white box switches.
In a report today on Stratechery, Ben Thompson wrote that AWS' switches would compete more directly with Microsoft Azure and not traditional switch vendors such as Cisco. Thompson noted that Azure Stack, which was released last fall, provided Microsoft with a hybrid cloud strategy.
Service providers are deploying white boxes
Verizon first deployed white box routers two years ago. Earlier this year, Verizon announced that it had worked with Cisco and Juniper Networks to decouple those vendors' software from hardware to create a multiservice edge platform using an x86 architecture.
In March, AT&T said it would install 60,000 white box routers in its cell towers over the next several years. BT is using white boxes to split up elements on its network while working toward cloud-native and container deployments down the road. Facebook has also been active in the white box space by founding the Open Networking User Group.