Google (Nasdaq: GOOG) has built and deployed its own 10-Gbit/s Ethernet switches -- a move that could have implications for the systems, chip, and optical transceiver markets.
Analyst Andrew Schmitt of Nyquist Capital was trying to trace shipments of SFP+ optical components and found the trail led to a Google-built switch. Schmitt, an industry analyst who has financial positions in Broadcom, Vitesse, Finisar, and AMCC, reported his findings in a column earlier today.
"This decision by Google, while small in terms of units purchased, is enormous in terms of the disruptive impact it should have on 10-GigE switching equipment providers and their component supply chains," he writes.
Google took the same DIY approach with servers a few years ago. In this case, its work has implications for switch vendors like Force10 Networks Inc. and Woven Systems Inc. , since Google not only couldn't find what it needed, but also built its boxes from off-the-shelf chips.
Moreover, Schmitt believes Google is taking an unconventional approach with its choice of optical interfaces.
billy_fold, User Rank: Light Beer 12/5/2012 | 2:58:39 PM
re: Google Goes DIY With 10 GigE Content provider building networking equipment? I may be proven wrong, but it doesn't make much sense on the face of it. It would seem that with Google's purchasing power, they could persuade an existing 10 GigE vendor to tailor a product to what they want and need.
re: Google Goes DIY With 10 GigE It's not a question of what the switches are lacking, it's more about what the vendors' include in their switch that Google sees no value-add (i.e., Google refuses to pay for the useless extra stuff that they themselves don't need).
For example, look at their early DIY servers they built - a motherboard (with CPU and memory) sitting on static free pink foam pad connected to a power supply - all placed on a standard 'bread rack' type metal racking sysetm sitting inside a server room. Who needs to pay for sheet metal, fans, etc.
I can imagine exactly what their 10GigE switch looks like ;-)
mu-law, User Rank: Light Beer 12/5/2012 | 2:58:38 PM
re: Google Goes DIY With 10 GigE They are one of the few folks out there with the demonstrated initiative and the critical mass of smart people to solve these problems themselves. They are their own credible threat to their suppliers.
I don't think this means they actually want to, or will displace COTS network equipment, but wow, what a great way for them to create levarage against their vendors.
douggreen, User Rank: Light Beer 12/5/2012 | 2:58:37 PM
re: Google Goes DIY With 10 GigE I agree that Google's use of home grown equipment could give them an advantage, as long as they do it on a case by case basis and don't just do it internally for the sake of doing it internally.
I don't see the comparison with AT&T. AT&T was a monopoly with no need to be competitive. Their services were regulated and priced in effect on a cost-plus basis, so there was no need. Once AT&T had to be competitive, the use of their own equipment (and later Lucents) was certainly NOT a competitive advantage. There is a lot of evidence that it was a competitive disadvantage (more so in transmission than switching).
jepovic, User Rank: Light Beer 12/5/2012 | 2:58:36 PM
re: Google Goes DIY With 10 GigE The discussion around Google's ventures into just an++thing oozes with lack of understanding of the halo effect.
Google has a tremendously successful and profitable search engine. As for the rest of Google's acitivitites, who knows whether they are smart?
The comparison with ATT during the monopoly years cannot be easily dismissed. Google has so much money, and have been expanding its number of employees so rapidly, that they pretty much have to expand into every neighbouring area. How else can they keep all these people busy? My own connections into Google tell me stories of absolutely ridiculous projects, in the line of designing their own coffee machines.
There is very little pressure on them to proof that they are doing the right things, as Google is still considered generally flawless.
Building their own equipment might work, but I suspect mostly because of the classic case of not including everything in the calcualtions. Google compares the hardware and build costs with the complete cost from the vendors. In the long run they will have massive support costs, but internal costs are always harder to quantify.
douggreen, User Rank: Light Beer 12/5/2012 | 2:58:36 PM
re: Google Goes DIY With 10 GigE Actually, the lower the volumes the less attractive it is for Google to try to roll their own, unless there is some super function that they can't get a vendor to implement.
My guess is that the volumes are high, but the vendors aren't willing to drop their pants and bend over. Once you drop your pants for one customer, word gets around and everyone thinks you are easy.
As I used to say when I was in the business, we will bend over backwards to make our customers happy, but we will not bend over forwards.
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