Light Reading
Embrane will help Cisco in its pie-fight against VMware.

Embrane Helps Cisco Build Its SDN Strategy

Mitch Wagner
2/7/2014
50%
50%

With its investment in Embrane, Cisco gets a stick it can use to whack VMware Inc. (NYSE: VMW).

Cisco Systems Inc. (Nasdaq: CSCO) plans to invest $6 million in the software-defined networking (SDN) startup, part of a C round of funding by Embrane Inc. that will exceed $12 million, according to a source familiar with the deal. (See Cisco Investing $6 Million in Embrane: Reports.)

So what's Cisco up to with this investment?

SDN is at first glance a big risk to Cisco, which makes its living selling expensive, proprietary networking hardware -- precisely the kind of thing SDN is designed to make obsolete. CEO John Chambers "asked his top executives to do an analysis on what would happen if Cisco plunged into the SDN market. They concluded it would turn Cisco's '$43 billion business into a $22 billion business,' our source said," according to a report on Business Insider.

But SDN can be good for Cisco, ZK Research analyst Zeus Kerravala tells Light Reading. The real cost for IT budgets isn't hardware; that's less than 10% of IT spending. Operational costs account for 30%, and customers will pay a pretty penny to simplify network management. "Making products easy is difficult to do," says Kerravala.

$6 million isn't actually a lot of money for Cisco.
$6 million isn't actually a lot of money for Cisco.

He adds: "Cisco is trying to create a seamless automated datacenter stack through use of a lot of integration. Customers will pay up for technology that makes things easy to manage."

To that end, "Cisco poured a lot of money into SDN," Kerravala says. "Most of their portfolio revolves around Layer 2-3. Now, with the Embrane investment, it gains a stronger foothold in the higher layers of the stack rather than the lower layers."

Part of that investment was on Insieme Networks, the "spin-in" that Cisco brought back into its fold when it unveiled its Application-Centric Infrastructure in November 2013. (See Cisco Unveils Application-Centric Infrastructure and Cisco's ACI Gets Physical With SDN.)

(Who's responsible for "naming strategy" at Cisco? Insieme sounds like the name of a snooty French tailor, while spin-in sounds like something a hippie does after tuning in and dropping out.)

Embrane's expanded universe
What does Cisco bring to Embrane (aside from 6 million clams, of course)? A customer base. "The market being opened up for Embrane is huge," Kerravala said.

Embrane was founded in late 2009 by Cisco alumni, with staff from other companies. Its products focus on delivering network services as software, including firewall/VPN, and load balancers with SSL offloading. Companies can spin up a firewall, for example, in 90 seconds.

The Santa Clara-based startup has 40 employees, but had to lay off a handful in November. While there are customers and demand for Embrane's technology, the company got ahead of itself in hiring, marketing VP John Vincenzo told Light Reading. "We thought the hockey stick was going to happen because the hype was there, but the hype was a detriment," he said.

Embrane raised $18 million in Series B funding in 2011, for a total investment of $27 million. When Embrane cut jobs, it said a Series C round was under way.

Earlier reports suggested that next investment would be $12 million, but our source says it will be greater than that. Embrane and Cisco declined to comment on any investment activities.

Current Embrane investors include New Enterprise Associates, Lightspeed Venture Partners, and North Bridge Venture Partners.

Initial customers were cloud providers, such as Sungard and Peer1, looking to compete with Amazon, Vincenzo said, adding that he hopes the company will be able to announce enterprise customers in a week or two.

Embrane's philosophy is that there are two camps in SDN: The hypervisor-centric camp comes out of the enterprise, building on the momentum of success deploying virtual machines. VMware is the leading vendor there.

The other camp is the networking team, which has until recently been a bottleneck in deployments. "The reason the network team is the bottleneck is that they haven't actually had the tools to be more efficient and dynamic," Vincenzo said. But they can be more responsive with the right tools.

— 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.

(11)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Page 1 / 2   >   >>
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/13/2014 | 7:00:37 PM
Re: Who's responsible for naming strategy?
I grew up in New York. Italian-Americans were my neighbors and friends. The only language I learned from them is swear-words, though. 
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
2/11/2014 | 1:44:31 PM
Re: Klingon proverb
I see the hardware issue as capex, and management cost as opex.
DavidMcCullochCiscoPR
50%
50%
DavidMcCullochCiscoPR,
User Rank: Light Beer
2/10/2014 | 6:03:34 PM
Re: Who's responsible for naming strategy?
Trust me, my British and Dutch roots were equally useless in deciphering our Italian friends' naming preferences. Luckily, I know people....
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/10/2014 | 5:58:30 PM
Re: Market timing
DOShea - That's the big problem with the hockey stick. If demand is failing to materialize, it could be you're early, and it could also be the product is a turkey. 

You can see the same problem with the Gartner Hype Cycle. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/10/2014 | 5:56:17 PM
Re: Who's responsible for naming strategy?
Way to make me feel like a provincial American, David McCulloch! :)

 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/10/2014 | 5:55:15 PM
Re: Klingon proverb
Is proprietary hardware a big deal, or is management the real cost to customers?

 
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
2/10/2014 | 2:58:25 PM
Re: Klingon proverb
Whatever Cisco does at Layers 3 and above won't matter as far as SDN is concerned because it does nothing to resolve the tension arising from Cisco's proprietary hardware and SDN, which is about an open approach to the infrastructure.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/7/2014 | 5:16:55 PM
Klingon proverb
Cisco is basically following the old Klingon proverb: Keep your friends close and your enemies closer. 
DOShea
50%
50%
DOShea,
User Rank: Blogger
2/7/2014 | 11:19:32 AM
Re: Who's responsible for naming strategy?
Is it wrong that this makes me yearn for a startup to be named Osso Buco Networks?
DOShea
50%
50%
DOShea,
User Rank: Blogger
2/7/2014 | 11:15:19 AM
Market timing
Re: Vincenzo's comments about the hockey stick, seems like we have been hearing that for some time now, yet there still seems to be so much certainty throughout the industry that there will be some huge market impact in another two years or so. Hope they're right.
Page 1 / 2   >   >>
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Using Service Quality to Drive WiFi Monetization

10|22|14   |   6:51   |   (0) comments


Live from the SCTE conference: Heavy Reading's Alan Breznick explores the forces shaping the WiFi opportunity in an interview with CableLabs' Justin Colwell and Amdocs' Ken Roulier.
LRTV Custom TV
Distributed Access Architectures – 2

10|21|14   |   8:51:00 AM   |   (0) comments


ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
LRTV Custom TV
Distributed Access Architectures – 1

10|21|14   |   9:01   |   (0) comments


SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
LRTV Custom TV
The WiFi Road to Riches – 2

10|21|14   |   3:58   |   (0) comments


ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
LRTV Custom TV
The WiFi Road to Riches – 1

10|21|14   |   10:15   |   (0) comments


SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Is Health the Killer App for the IoT?
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/22/2014
Drones Hover Over the IoT Sector
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/23/2014
Analysts Warn of Major NFV Gaps
Carol Wilson, Editor-at-large, 10/22/2014
Roku Raises $25M, But for What?
Mari Silbey, Independent Technology Editor, 10/23/2014
AT&T: Merger Review Halt Won't Hurt Us
Alan Breznick, Cable/Video Practice Leader, 10/23/2014
Like Us on Facebook
Twitter Feed