I was a bit surprised when heard this number and had to make sure I got it correct. That’s 57 billion with a big B. What costs $57 billion?
The cost of operating networks running Cisco network equipment annually
It’s not surprise that Cisco sells a lot of networking hardware every year. In fact, they sell about $25 billion a year according to their FY2016 annual report. Are you surprised that the network operators spend more on operating the gear than buying it?
In my career I have learned that it is easier to build a network element then integrate it into an existing network. There is lot of work to install, configure, integrate with management and business systems, connect users or customers and so on. It adds up; I just never heard the cumulative cost. As a result, networks are running into economic wall and bogging down the whole IT industry.
Without networks, there are no smartphones, online videos, search engines, social networks, distributed systems, no cloud, no serverless computing. In other words, there would be no modern IT systems that make our life easier, safer, more informed and entertained.
What is the problem?
Let’s go back into history, back to the 1990s when the first modern network elements were designed. Elements like switches and routers were designed to connect many endpoints for long periods of times. The goal was pushing through as much as possible traffic with minimal changes. When a server was connected, it used an Ethernet wire to an Ethernet switch and a router. This connection was expected to be there for many months, if not years. Changes were very infrequent. Of course, mobile phones were just phones and we all used wired desktops. But things changed.
As IT costs grew, the first generation of virtualization technologies came to market to reduce that cost. Servers became virtual machines. Wireless laptops slowly replaced wired desktops, phones slowly started to become smart phones, effectively mobile computers. Networks suddenly had to cope with an increasing number of connections that were not static and long living. The network element didn’t change, so the management became more complex. The number of endpoints per network elements increased and their connection time got shorter, dropping to days or less.
Fast forward to today. We are always online, as smart phones and tablets exploded. Second generation virtualization, in the form of containers, is delivered in the cloud on the way to serverless computing. The lifetime of an endpoint on the network is way down. How many times do you open/close your laptop in a day? How many times do you check your smartphone? In data centers average lifetime of a container is 5 minutes, yes 5 minutes. The number of hosts requesting network connection exploded. The hosts on the network are now much shorter lived and much more dynamic. However, the network element hasn’t changed and that has increased the cost of operating networks.
Oh, and did I mention IoT? Another tsunami forming to hit the networks.
Whole IT industry changed as cloud has become mainstream. CPUs became vCPUs, servers are VMs and containers grow with more capabilities and easier management. But not the networks. You can’t run this dynamic IT environment with hardware that was architected for a different time. We have to change the fundamental architecture of network element.
Networking is an orphan because of legacy networking vendors. They make money selling hardware. They bundle hardware and software as an appliance, either physical (preferred) or virtual (but not happily). The management of those is becoming more and more complex. The interfaces to those appliances are designed for humans, not for automation and programming. They too are based on concepts from the 1990s; NETCONF, which is now a standard for network management, was originally designed in 1997 and released as 1st draft to networking industry in 2002.
And you, network operator, you need container based micro services today. You need capability to quickly create a new service to answer your customer requests. You, network operator, need a way to simplify network operations, not to add complexities. You need to upgrade your whole network in a day, not months (some operators need a year to finish network upgrades). You have to bring up a new customer in minutes, not 30, 60 or 90 days. You need to create a new service in weeks, not years. If you obsolete a service, you don’t need to throw out the box. Reuse the hardware with new software.
All this is possible with new modern network element where the forwarding is done at line rate using merchant silicon (Broadcom, Melanox, Cavium, Barefoot). The control plane is a native cloud application that easily integrates into your existing network. Service can be provisioned via new declarative APIs using data models that are implemented from a service, and not implementation, point of view.
Using the Volta Cloud Routing Engine with its declarative APIs simplifies and lowers the cost of network operations. We’ve seen significantly reducing time to market for new services, cutting the time to provision a new customer (approx. 20min) and adding new services (in real time).
Looking forward to the near future when presentations from existing vendors will not have such bombastic, fatalistic titles and I will be writing different blogs about new services that make our life easier, safer, more entertained.
 Scott Harell, VP Product Management on Cisco Live in Berlin 2017