Arista Buys SDN Pioneer Big Switch 'For a Song' – Sources

Formerly glam SDN startup does the walk of shame.

Mitch Wagner, Executive Editor, Light Reading

January 27, 2020

3 Min Read
Arista Buys SDN Pioneer Big Switch 'For a Song' – Sources

In a sad end to a formerly hyped SDN pioneer, Arista is buying Big Switch "for a song," according to multiple sources.

SDXcentral broke the news last week, which we've been able to confirm with four additional sources. Both Arista and Big Switch declined to comment.

Details of the deal are scant. Sources said the price tag was $70 million, plus $30 million for additional spending related to the transaction, including debt service. That's a steep discount over Big Switch's total funding of $119.5 million.

"They got it for a deal. They got it for a song," said one source.

Another person with knowledge of the deal said Arista isn't buying the company itself, but instead buying assets and hiring key employees, while other employees get walking papers. That person described the deal as "contentious," and said later investors are being paid while earlier investors and employees get a haircut (a.k.a. practically nothing). "Nobody makes money on the deal," they said.

It's unclear how Big Switch fits in with Arista. One source said Big Switch helps Arista broaden beyond hardware sales to automation and management. "You can't just be a box company. You have to tell a solution story on managing fabric," the source said.

Founded in 2010, Big Switch provides Big Cloud Fabric, for on-premises networking; Big Monitoring Fabric for network analytics; and Multi-Cloud Director for multicloud automation.

Figure 1:

Learn more about how the cloud is transforming the service provider sector at Light Reading's cloud content channel.

Big Switch's initial strategy was to deliver data center class software-defined networking (SDN) using white box switches, the same technology used by hypercloud providers like Amazon Web Services. Light Reading named Big Switch one of six SDN startups to watch in 2012. But white box SDN was untried and unknown to the vast majority of network operators a decade ago. Arguably, Big Switch was too far ahead of its time. Indeed, none of those six SDN startups to watch are around today as independent companies; they've all been acquired.

And Big Switch has had trouble competing. "SDN has evolved quite a bit," said analyst Scott Raynovich, founder and chief analyst of Futuriom. "There are some large and skilled competitors, including Cisco, VMware and [Nokia's] Nuage, which lead the data center networking market, where Big Switch started." SD-WAN has overshadowed the original SDN vision. "And Big Switch was not a competitor in that market," Raynovich said.

Big Switch is closely partnered with Dell Technologies, which might have been a more logical buyer than Arista, as Dell is also an investor in Big Switch.

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— Mitch Wagner Visit my LinkedIn profileFollow me on Twitter Executive Editor, Light Reading

About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

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