Inkra Virtualizes Data Center

Just one day after data-center switch maker Nexsi Corp. ran out of money and went belly-up (see Nexsi Hits the Exit), another company in the same area is planning its coming-out party. Next week, Inkra Networks plans to introduce a family of data-center switches it claims go beyond what Nexsi had to offer.

The switches, the Inkra 4000 and the Inkra 1500, are meant to tie together with software, or virtualize, the hundreds of networking appliances data centers need to deliver IP services today. The switches have been in beta testing since January.

"Inkra gives you the ability to virtualize and decrease cost by using virtualization services," says Dave Roberts, Inkra’s vice president of Marketing, "but in a way where you don’t lose the best aspects of the existing system."

Roberts says data-center complexity has made it impossible for operators to respond quickly to service demands. One problem is that every customer requires its own dedicated equipment, which raises questions of cost-effective scaling and customer management. As more and more network appliances, such as firewalls, IPSec VPNs, and load balancers, are deployed, more management systems must be used, and it becomes more difficult for the data-center operator to manage them.

Many analysts concur: "It is hard to imagine the inefficiency that goes on in data centers. They are just so messy," says Michael Howard, an analyst with Infonetics Research Inc.. "[Inkra’s box] is almost as easy as turning dials."

The switch enables customers to turn on IP services through software commands, rather than with the deployment of hardware. Using ASIC-based processors and software, the switch can create "virtual racks" for the customers of a data center. Using a feature called HardWall, the switch can ensure that each customer can access services through a different virtual rack, separate from those of other customers or users.

One feature that analysts are raving about is called OpenRack, which allows for the integration of existing external equipment into the virtual rack. This means customers who are happy with certain vendors and appliances -- for example, a specific firewall -- can hold on to what they like and virtualize the rest.

According to John Morency, vice president of technology research for Sterling Research, Inkra’s switch is the only one announced that allows customers to pick and choose like this. "Inkra is the only one I know of that has that feature," Morency says. "One of the biggest questions enterprise customers ask when vendors call is, how are you going to be compatible?"

But it's the virtualization element that Inkra claims will save money. The company says using its switches can reduce operating costs 10 to 100 times. Analysts say that if the Inkra architecture improves efficiency as much as the company claims it does, it is worth the price. Pricing for the 1500 starts at $25,000, while the 4000 starts at $98,000.

"It doesn’t take a whole lot of people's salaries to pay back [the cost of the Inkra 4000]," says Dave Passmore, an analyst with the Burton Group. "It sounds like this product could pay for itself."

Despite the cost advantages, there are reasons to question whether Inkra can succeed where Nexsi so recently failed. One of these is money. While Nexsi managed to burn through $90 million building its switch, Inkra has received only $36.5 million in funding to date.

"From a market perspective, Inkra’s situation is very similar to Nexsi’s," says Sterling's Morency. "They will run into the same challenges."

Inkra's Roberts says he’s not worried, declaring that Inkra is fully funded through 2002. He also claims Inkra has a lot more customer traction than Nexsi ever had. The company has a list of 10 companies that have been beta-testing the switches, including Savvis Communications (Nasdaq: SVVS), Rackspace Managed Hosting, Morgan Stanley Dean Witter & Co., and Deutsche Telekom AG (NYSE: DT). Inkra claims many other firms have already voiced their interest.

Observers agree that if the customers materialize, they could certainly help Inkra survive. "What separates startups from grownups are the customers," Infonetics' Howard says. "That is certainly the first measure of whether or not a company will be successful." [Ed. note: Like, duh!]

Even with Nexsi gone, some observers say there are as many as 30 startups and incumbents that offer data-center Web switches, all fighting it out in a space that has been squeezed hard by the crunch in the market. Nauticus Networks Inc., for instance, has a switch that butts heads with Inkra's, except that it's designed for a single-enterprise infrastructure.

The Inkra 1500, a small pizza-sized box, supports 4-port GigE and will be available in the third quarter of this year. The Inkra 4000 is a 14-slot chassis that begins with a switch fabric/management card with 80 Gbit/s of switch fabric capacity and any combination of I/O and service-processing cards, depending on the services required. It will be available in the second quarter of this year.

— Eugénie Larson, Reporter, Light Reading
lo_mein_noodles 12/4/2012 | 10:34:50 PM
re: Inkra Virtualizes Data Center Let the death watch begin!!!
Factfinder 12/4/2012 | 10:34:49 PM
re: Inkra Virtualizes Data Center Two things. First, if Mr. Roberts really believe beta testing customer equal to customer tractions, this company is doom to failure. Or, if he doesn't actually believe it, he just wanted to hype it up the old fashion dot com way. Then, the company is doom to failure.

By the way, I thought from some other articles I read before, Nexsi actually has much more beta customer, and I thought they were actually selling. Anyway, those customers that was on Inkra's list, I think they are pretty much on everybody's list, play their " I will pretend to buy" card.
bayarea 12/4/2012 | 10:34:43 PM
re: Inkra Virtualizes Data Center that all the beta customers are on the TAB
and have shares...Not that it will amount to
sillyvalleyviewer 12/4/2012 | 10:34:23 PM
re: Inkra Virtualizes Data Center Hey at least Inkra knows what a network is. Some of there competitors thought it was all about the ASIC...

I hear they are renting out Nexsi's new huge building for the silcon valley farmers Market on Tuesdays and Thursdays!
BigDeal 12/4/2012 | 10:34:13 PM
re: Inkra Virtualizes Data Center That is good news for Inkra.

But I remember, there is another company Ranch Networks Inc. in East Coast, they already have a product with lot better performance.
uuallan 12/4/2012 | 10:34:08 PM
re: Inkra Virtualizes Data Center If this is the Ranch Networks you are talking about:


They don't even have a completed website, so I am not sure they would be much competition to Inkra.

I think Inkra is going to have a heck of a time in this marketplace. I am sure their box is a lot more expensive than an F5, Nortel, or Cisco box. Even if can do mroe, most hosting providers are not going to junk existing boxes to offer a much more expensive service to customers. Especially when the customers are already trying to cut costs.

In fact in cases where providers are abondoning Cisco and Nortel it appears they may be opting for Foundry boxes. The Foundry ServerIron is available for half the cost of a comparable Cisco or Nortel box.
Factfinder 12/4/2012 | 10:34:01 PM
re: Inkra Virtualizes Data Center Some insiders are getting defensive. It's easy to know the network, but it's hard to know the market.
BigDeal 12/4/2012 | 10:33:59 PM
re: Inkra Virtualizes Data Center Yes, this is the company I am talking about. Their Website was never up and they had a working product early this year. Inkra will realize when it will come to market in couple of months.
uuallan 12/4/2012 | 10:33:16 PM
re: Inkra Virtualizes Data Center "Yes, this is the company I am talking about. Their Website was never up and they had a working product early this year. Inkra will realize when it will come to market in couple of months."

I don't know, if they can't even get their own web site working, how can they be expected to provide web services for other companies?
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