News

Report: AWS Mulls Entering Enterprise Networking Space

• By David Ramel
• 07/16/2018

Amazon Web Services Inc. (AWS) is reportedly considering entering the enterprise networking market.

That report, published Friday, sent down the stock values of networking heavyweights Cisco Systems and Juniper Networks and generated multiple reports speculating on the possible resulting disruption of the industry.

Citing unnamed sources, The Information reported "Amazon Web Services Targets Cisco in Networking" (requires subscription) which immediately lowered the price of Cisco stock, along with Juniper. Arista was also listed as likely to be affected by such a move.

According to the report, the AWS effort would leverage commodity, "white box," hardware and open source software, which are key tenets of the software-defined networking (SDN) movement that has also shaken up the traditional industry long dominated by Cisco.

However, while Cisco subsequently jumped on the SDN bandwagon and enacted other modern networking initiatives to stay relevant in new-age networking, it might have a harder time coping with cloud giant AWS.

"As it does in many other categories, Amazon plans to use price to undercut rivals," the report said. "The company could price its white-box switches between 70 percent and 80 percent less than comparable switches from Cisco, one of the people with knowledge of the program estimated."

While leveraging white-box hardware and open source software, the AWS offerings would reportedly connect that software with its own cloud services, providing another hard-to-beat advantage. Those services include servers and storage.

"For some time, Amazon has used similar white-box switches inside its own data centers, a practice in line with other big technology companies," The Information said. "AWS expects to launch the networking switches for outsiders within the next 18 months, said the person with direct knowledge of the project. It is working with white-box manufacturers such as Celestica, Edgecore Networks and Delta Networks on the switches, and is looking to work with more, the person said."

While Amazon wouldn't comment on the report and Cisco offered up a stock PR response quoting its leadership, other companies did weigh in, such as SDN and intent-based networking specialist Apstra.

"The combination of white-box hardware and open source software enables companies to reduce the cost of building their networks, said Mansour Karam, CEO of Apstra, a startup that sells software for managing networks with devices from multiple providers," said the report. " 'It’s not surprising that Amazon would want to participate in, as well as control, the data center as the onramp to their cloud services,' said Mr. Karam."