SDN Startup Pica8: We Will Take Share From Cisco

As software-defined networking (SDN) startup Pica8 continues to gain traction in the market, the San Jose, Calif.-based vendor is looking to give networking incumbents like Cisco a run for their money -- and is enlisting the help of the channel to help make that happen.

"This is a channel story of extraordinary scope," said Steve Garrison, vice president of marketing at Pica8, in a recent interview with CRN. "We are really trying to disrupt the supply chain and shift $20 billion, $30 billion [or] $40 billion away from Cisco to a whole bunch of other companies, and we're proud of trying to doing that. That's what this is really all about. It's not just about SDN."

Founded in 2009, Pica8 is looking to shake up the traditional IT infrastructure market with what it says is a more flexible, open and less costly approach to networking. The heart of that approach lies in PicOS, a Linux-based network operating system that can run on a range of white-box or bare-metal switches.

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The idea, according to Garrison, is that the Pica8 model gives customers more flexibility and choice, allowing them to not only customize the PicOS software to fit their specific needs, but to also choose the type of switching hardware on which that software runs.

It's a model that contrasts sharply with that of networking players like Cisco or Juniper, who sell their switches and operating systems as a single, vertically integrated package.

What's more, Pica8 said the white-box model is significantly cheaper than buying a switch from traditional networking vendors. The company, for instance, said its P3297 switch sells for about 70 percent less than the most comparable Cisco switch, the Nexus 3064.

"You save a ton of money, and there's nothing wrong with that," Garrison said.

When reached for comment by CRN, a Cisco spokesperson disagreed, stating that the operational management and troubleshooting required of white-box switches is "more expensive than the up-front costs of noncommodity hardware."

While still in its early days, the white-box switching market is starting to take hold, especially with large cloud providers and Web 2.0 companies like Facebook and Google. According to industry analyst Dell'Oro, the white-box switching market outperformed the overall Layer 2-3 Ethernet switch market in 2013, which exceeded $22 billion.

Pica8, for its part, now has more than 320 customers, and is adding them at about a clip of 20 per quarter, Garrison said.

Pica8 sells its software and switches in two models. In the first model, customers can purchase the PicOS software from Pica8 and then go out and acquire the white-box hardware from a PicOS-compatible Original Design Manufacturer (ODM), such as Quanta Computer or Edge-Core Networks, on their own.

Or customers can choose to buy one of Pica8's "preloaded" systems, which consist of white-box hardware Pica8 manufactures itself that runs the PicOS software.

Pica8, which in October closed a $12.5 million round of Series B funding, sells today through a network of roughly 20 partners, including U.S. distributor Synnex and systems builder Colfax International.

Garrison said the white-box model lends itself especially well to the channel because partners are often called on by customers to help with the integration of a network operating system like PicOS with the bare-metal hardware.

Pica8 Partners: There's A Networking Paradigm Shift

Pica8 has a partner portal with training resources and other materials to help solution providers ramp up with the white-box model. Garrison said, for now, the company doesn't have a formalized partner program, but will likely launch one in 2015.

"We are trying to incent a few to be successful before we convert that to many," he said.

Kaleb Jacob, owner of Eagle Network Solutions, a Bedford, N.H.-based solution provider, said his company decided to partner with Pica8 almost two years ago when they noticed the increasing buzz and opportunity around SDN.

"We love forklift upgrades. Those are great because they're big sales," Jacob told CRN. "But if the customer finds a way to do it better, more economically and in a way that puts them more in charge of what they are trying to do, they are going to do that anyway, and they are going to leave you in the dust."

Jacob said his Pica8 sales have been growing, particularly within the higher education market. He noted that many universities are deploying white-box switches like Pica8's as part of broader research initiatives around OpenFlow, the open-source communications and switching protocol that's become the foundation for many SDN solutions.

Pica8's PicOS supports the OpenFlow protocol.

"I really see the [white-box] market morphing and getting into the core and getting into the edge, because of the flexibility. You can take the software and go, and you can put it on any box you want," Jacob said.

Jacob added that white-box switches also tend to be less expensive than switches from traditional networking vendors. What's more, he said, it saves customers from having to perform a major rip-and-replace when they want to upgrade from one kind of hardware to another, such as moving from a 10-gig to a 40-gig switch.

"Everyone we talk to, there is no such thing as unlimited budget," Jacob said. "This helps with that."

Bryan Shook, senior account manager at System Resale Solutions, a Guelph, Ontario-based solution provider and Pica8 partner, said he is also seeing a lot of interest in white-box solutions from higher-ed organizations.

"Being able to have an influence, or manipulate the software to fit their specific needs – that's really attractive to them," Shook said.

Sales of Pica8 switches are still modest, but growing, Shook said.

"It can be difficult to get someone who is a loyal Cisco or HP or Juniper customer to move away from a technology that they are comfortable with," Shook said. "So it might be a slow process. But there are going to be the risk-takers and the early adopters who want to try it out. And because it's pretty affordable, I think it will grow."

Synnex, who signed on as a Pica8 partner earlier this year, told CRN in an emailed statement that it is definitely seeing a "paradigm" shift toward new networking technologies like those offered by Pica8.

"There is a noticeable shift away from traditional router [and] switch sales, and activity shows that a great number of network assessments are being performed with the newer technologies," a Synnex spokesperson told CRN. "Our goal is to help resellers understand that there is a paradigm shift and advise them on how to properly take advantage of it."

PUBLISHED NOV. 3, 2014