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Big Switch CEO: We're Not for Sale

Mitch Wagner
2/13/2014
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Doug Murray, the CEO of software-defined networking (SDN) startup Big Switch Networks, has a message for the market: "We're not for sale!"

In the latter part of 2013, rumors circulated that Big Switch Networks was being lined up for an acquisition, with Cisco Systems cited as the prime potential buyer, but a takeover never happened.

Instead, Big Switch appointed Juniper alumnus Murray as CEO in November.

So, was he hired to find a buyer?

"I've been brought in to ramp up this company and make this company a success," Murray told me in a phone interview, during which I pushed him hard on the acquisition question. The company is not being shopped around for buyers, he stated firmly.

Murray, who has given Light Reading the lowdown on his current strategy, said last year's Cisco acquisition talk was just "rumors and speculation" and "a lot of FUD" that pre-dated his joining the company. (See Murray Leads Big Switch Into Bare Metal Battle.)

Big Switch was handicapped by early hype, and now needs to prove its mettle, said Christian Renaud, analyst for 451 Research. "They got so much early exposure they were the poster children for OpenFlow and SDN," he said. "They burned through a lot of their operating capital quickly and ran themselves short on runway. They didn't get the adoption needed to become self-sustaining," he added.

Big Switch, which was founded in 2010 and launched what it claimed was the first "open" SDN product suite in late 2012, came to customers before the customers were ready to deploy, Renaud said. "They were ahead of the market." (See Big Switch Ships Open SDN Product Suite.)

Financially, Big Switch is in good shape today, Murray said. It concluded its Series B financing in late 2012, for a total $47 million. Big Switch is also bringing in revenue from sales of its products. Running out of money is "not on the short term radar," Murray said. (See Intel Invests in Big Switch.)

Far from running out of money, Big Switch is adding headcount, though Murray was cagey about revealing total numbers. He said Big Switch is looking to increase its total employee count by double-digit percentage points through hiring in engineering, sales, and marketing, and that the company has between 50 and 200 employees.

Big Switch views VMware's purchase of Nicira and Juniper's of Contrail, both in 2012, as validation of the SDN technology model, Murray said.

In other words: Customers are ready.

In addition to Murray, Big Switch has a new management team to execute the new product and strategy vision. These include Prashant Gandhi, who joined in May as VP of product management, Joe Palazola, VP operations and customer support, hired February 4, as well as Jeffrey Wang, hired in December as VP engineering after stints at Cisco and Brocade. (See Big Switch Names Palazola Operations Chief, Big Switch Appoints VP of Engineering, and Cisco Exec Goes to Big Switch.)

"The shift we've made is to move to physical and virtual" -- Murray calls this "P+V" -- "and not just do overlays. Overlays don't scale as effectively. You don't have control over the whole infrastructure."

To help customers achieve operational efficiency, Big Switch couldn't just control the overlay, as it had been. It needed to control the underlying switches as well. So it switched to a "bare-metal" strategy, shipping its Switch Light software that runs on commodity hardware.

As part of its strategic shift, Big Switch is developing Cloud Fabric end-to-end cloud operations management software. The service is now in beta with five customers, including carriers and datacenter companies. Big Switch expects to ship this year, and will have a firm date for that in the next quarter, Murray said.

Murray spent a lot more time talking with Light Reading recently, explaining the SDN company's direction and plans.

Check out all he had to say by reading Murray Leads Big Switch Into Bare Metal Battle.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to mwagner@lightreading.com.

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MarkC73
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MarkC73,
User Rank: Light Sabre
2/17/2014 | 2:52:23 AM
Re: Pioneer proudly displays arrows in his back
I remember deploying a few UMC-1000s back in the day, I can't remember any complaints so it they must have been good enough!  Then Tellabs bought them out, and in my personal opinion, the Vz deal pushed their margins too far south.

Back to Big Switch, anyone know where they've been deployed, trial or otherwise?

 

 
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
2/17/2014 | 2:39:37 AM
Re: Pioneer proudly displays arrows in his back
Seven, 

Yes, many times one don't think VCs have much to do with innovation, but they are what startups have in mind when deciding on their product, or service. 

Many times they also want o repeat a particular success story and there is when much of innovation. 

-Susan

 
brookseven
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brookseven,
User Rank: Light Sabre
2/16/2014 | 12:51:53 PM
Re: Pioneer proudly displays arrows in his back
Susan,

AFC was the first Access Player to focus on the Tier 3 and Tier 2 Carrier Markets.  Although it followed the standards, the architecture was differentiated and created a cost structure that was attractive.  This was true on both a hardware and software standpoint.   Additionally, the business structure was advantageous to the small carriers (like AFC used to write USF applications for their customers).  

What happens today is that VCs flood the market with startups in the same market spaces (see SDN and NFV).  The other thing is that I see startups who would require the telcos to be completely different companies and are stunned by how slow adoption goes (see SDN and NFV).

seven
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
2/16/2014 | 2:00:50 AM
Re: Pioneer proudly displays arrows in his back
Thanks, Seven.

What do you think made them different from their competition?

Being different from the rest is, indeed, a big plus. There are some good telecom startups in Europe these days. Some of them obviously want to make a difference being innovative, or proposing a change. 

-Susan 
PaulS681
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PaulS681,
User Rank: Light Beer
2/15/2014 | 5:44:02 PM
Re: HR policy suggests long game
Big Switch seems to have their act together. But I agree with Mitch... Everything is for sale if the right price is offered. By Murray saying we are not for sale, he is basically upping the price.
brookseven
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brookseven,
User Rank: Light Sabre
2/14/2014 | 8:07:21 AM
Re: Pioneer proudly displays arrows in his back
 

Susan,

Advanced Fibre Communications....by the way both Ciena and Pairgain were pretty similarly successful,

The point of all 3 is that they were vastly differentiated from their competition.  Most startups today...not so much.

seven

 
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
2/14/2014 | 3:00:27 AM
Re: Pioneer proudly displays arrows in his back
Seven, 

"I worked for a company that (in the telecom business) went from 0 to $260+ M in revenue in 3 years (where 0 is the date of founding).  That is successful."

More than successful. I believe that's impressive. Is it possible for you to share the name of the company? 

-Susan
brookseven
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brookseven,
User Rank: Light Sabre
2/13/2014 | 9:03:49 PM
Re: Pioneer proudly displays arrows in his back
Can you define "widely successful"?

I worked for a company that (in the telecom business) went from 0 to $260+ M in revenue in 3 years (where 0 is the date of founding).  That is successful.

 

seven

 
DOShea
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DOShea,
User Rank: Blogger
2/13/2014 | 8:54:57 PM
Re: Pioneer proudly displays arrows in his back
Their Floodlight-based controller really was very widely successful, and it's kind of amazing that less than a year later they were changing strategy amid the prospect of Cisco, Juniper and everyone else getting into that business and taking out the biggest customers. You have to think they had plenty of chances to make a Nicira-type deal early on--I'm guessing especially with Juniper, which later bought Contrail, or maybe Dell or HP.

The new strategy does open things back up for them, but I think can be truly successful only if customers aren't interested in Cisco's ACI story
Carol Wilson
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Carol Wilson,
User Rank: Blogger
2/13/2014 | 6:17:25 PM
Re: Pioneer proudly displays arrows in his back
In the telecom space, yes, it often does. Being the first company to create a new technology doesn't mean you can deliver it at the scale needed by telecom giants or convince them to buy it from a small player. 

But I always thought Big Switch had a wide swath of possible customers. 
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