I’m going to start this post with a disclaimer. Firstly, I spent a decade working for a Value-Added Reseller (VAR) that focused on a specific market segment: K-12 education. Second, I’m working from the position that I disagree with Peyton Koran’s assessment of the market in this video:
If you read the link above summarized by my friend Greg Ferro (@EtherealMind), you’ll see that he believes there are four major areas where open source and whitebox switching are taking over. Let’s look at each one.
In It To Win It
Premise: Vendors and VARs are no longer working to benefit the customer but to benefit themselves with increased sales and services.
What is the point of a business? If I recall from my business degree, it’s to stay in business. Business provide a product or a service. In the networking world, that means you’re either making gear or you’re providing a service for that gear. Vendors make equipment, VARs provide a service to install it.
If you sell a thing, how much should you sell it for? Should you sell it for what it cost you to make it? That wouldn’t keep you in business. Should you sell it for a huge fat profit? That depends on your business model. Most people will tell you that you should sell it for the price that “the market will bear”. So, if you make a thing that costs X to build and the market will let you sell it for 3X, should you sell it for 2X just because it makes you feel good? Or should you take the money that you can make and use the profits to invest in other things? It’s a tough call, right?
As your shareholders how they feel about profit. Yes, the shareholders get a say in this too. If you’re a publicly traded company you find quickly that your path doesn’t always line up perfectly with your goal. Shareholders are fickle and driven by a number at the end of every quarter. They don’t care about altruism or goodwill. They want return on their investment, and that comes from beating profit estimates.
Ask a company like Electronic Arts (EA) how they feel about profit. Should they start offering cheaper games or free online service? What about loot boxes sold for real money? Businesses exist for profit. Even a non-profit organization covers the costs of operating the business, including paying salaries. To think that a networking vendor or VAR is working for the benefit of the customer first might mean your priorities for business are misaligned.
Premise: Customers don’t need all the features in a modern network operating system.
That’s actually a true point. Most everyone that ever installs a switch won’t touch 50% of the features that it uses. In the customers that I worked with, that number was closer to 75% of the features. What does that mean for the future of networking?
I’m fond of saying that every crazy feature you’ve ever seen in a network operating system was the result of a million-dollar sale that needed that feature to go through. If you’re evaluating a solution and it’s missing a key feature, you’re not going to buy that solution. If you’re a vendor and you’re in danger of losing a sale because you don’t support a key feature, you’re going to develop that key feature. That’s supply and demand in a nutshell from Macroeconomics.
So, if you need a feature and it’s not present, how are you going to get that feature? Well, there are some in the industry that think that you should have an army of programmers waiting in the wings to write a Linux app that runs on your switch and executes that feature when needed. That’s well and good for a feature that you need once a month or once a quarter. But what about those features you need daily? Or constantly? Do you and your programming team feel comfortable enough with the architecture of a switch to write a routine that won’t leak memory and cause the switch to reboot once a week? Do you feel confident that your program isn’t going to slow down the switch and cause network bottlenecks?
Telling an application developer that they’re good at coding operating systems is like telling me that because I took an intro course to programming that I should be able to code a video game. General knowledge in one area doesn’t always translate into the specialized areas needed for other places. Sure, we’re always going to have to deal with feature bloat in code bases. Desktop and server operating systems have it. Mobile operating systems have it. Protesting that networking operating systems should be immune from it is a rosy view of the world that doesn’t work in reality.
I Feel The Need For Speed
Premise: Customers can’t wait months or years for vendors to fix or update their software. Speed is what’s important.
If you’ll excuse my pointedness, this may be one of the more hypocritical statements of the whole argument.
You want a bug free software release to happen hours or days after a vulnerability is found. Or you want a new standard implemented in software as soon as it’s ratified. But you want it to be stable and not introduce any new bugs into the code. That’s a tall order.
Applications get patched all the time. In fact, Star Wars Battlefront 2 from EA launched with patch waiting to download. Seems they couldn’t fix all the bugs before it went live. And given that it got at least three patches during the open beta, you might say they didn’t deliver the most stable and entertaining code they could have if they had just waited to release it.
I’m highlighting video games here because they provide the perfect example of the patching process. You create a new feature and you need it tested. A small group of dedicated people test it and bless that it’s ready to deploy. Then, the larger population of users gets the new patch and finds out that when it is pushed to the limits it has bugs and breaks under certain special circumstances. Those circumstances weren’t possible to replicate in testing or were absent from the pool. Perhaps the setup only happens on old hardware or for someone who is using the software in an unintended way? You can’t test for every possible scenario. You have to do the best you can with the limited time you have to fix the issues and get the patch out the door.
All software development works like this. You can deliver a solid patch eventually or a “good enough” patch tomorrow. You can’t have both. And for those that might be crying about DevOps/CI/CD mentalities for delivering consistent software quality, just remember that you’re not really working with a stable codebase at that point. You’re just working with one that’s getting constant micro changes.
Premise: Network spending is down because buying from VARs or direct from vendors is just too hard.
This is a sentiment echoed by Teren Bryson in this post. Teren is like me, so I believe his viewpoint. But, if you’re a Small-to-Medium Enterprise (SME) spending in the tens or hundreds of thousands per year, I want you to go try to buy network gear directly from the big networking vendors. Go on to their website and just click the “Buy Now” button for a Nexus or a big Arista switch.
Back already? No “Buy Now” button? Strange. You’d think that large companies would just make it super easy to buy directly from them if VARs were so useless. Maybe there’s a bit more to the story.
Turns out, having hundreds of thousands of customers in your database can be a bit of a drain. And trying to make one or two switches for the majority of them a year takes way more time than it should. That’s why most vendors and resellers work through a distribution partner. Distribution partners agree to buy the basic configurations of devices and sell them direct to smaller customers and partners. This increases the amount of sales of equipment and keeps the smaller customers happy because they don’t have to wait a month for something to get built. It’s the same model used by Apple Stores and Best Buy. Keep stock in the things people want and if they want something special and custom they can order it direct and wait.
VARs are also incentivized to sell to customers. They get discounts that they often pass along to their customers to provide for service attachment. Want to buy direct from the vendor? I’d bet that discount disappears. It’s there because the VAR has made an investment in the brand. Discounts happen to make sure that VARs are concentrating on selling equipment and installing it promptly. The customer pays less overall because they’re getting something of value added to the transaction.
Do vendors that don’t have a channel model sell things cheaper? Sure. But you lose the value portion of it. If you don’t need that then you wouldn’t be looking to buy from a VAR in the first place. It doesn’t stop people from trying though. In my VAR days, we had several companies that wanted to buy directly from us but not use our services. They got upset when we quoted them a price that was higher than the discount they knew we got. We told them the discount existed for our use, not for theirs. These passthrough customers would get made and go off to try and buy direct. And in more than a few cases, they came back when they realized that they either couldn’t buy direct or the cost they had to pay was higher than our price.
If the purchasing model is truly broken, don’t rush to lay blame at the feet of the vendors and the VARs. Instead, think about where it got broken along the way. Think about all the marketing funding that goes into selling your product. And ask yourself how differently things might look if the deciding factor in most sales was something other than the bottom line price.
Bringing It All Together
Is the world of vendors and VARs all nice and rosy? No. There are always improvements to be made. We could streamline the process or make it easier to customize gear. And no one is ever really happy with the price they are paying for something. But to suggest that everything that whitebox switching and open source software offers is the Golden Path forward is just as short sighted. You have tradeoffs. You have to spend a lot of time retraining your workers to act in a different capacity. You gain flexibility at the cost of speed. And it won’t work for more than half the businesses out there. The model that Peyton Koran espouses may work for a number of large organizations. But the only way to know that is to investigate for yourself. Please do the research before jumping into the deep end of this pool.