Many of you have followed a series of posts I’ve written on rumblings that Cisco’s renowned engineering troika of Mario Mazzola, Luca Cafiero, and Prem Jain would be reuniting to launch another venture.
Rumors last summer suggested that they might be incubating a networking company, perhaps in conjunction with a Valley venture capitalist. Subsequent rumors indicated that the Cisco engineering trio was building a switch as part of a startup company, maybe even as part of another Cisco spin-in company.
During the last two weeks, rumors intensified and suggested that the threesome was building a data-center switch attuned to the requirements of cloud computing. It also became clear that this would indeed be another Cisco spin-in company. Now we learn, from a report in the New York Times, that the switch in question will feature software-defined networking (SDN), and that the principals behind the spin-in venture, called Insieme — it means “collection” or “assembly” in Italian — are involved in business negotiations with Cisco.
We don’t know much other than that, though. When asked by the New York Times about Insiemi, Cisco CEO John Chambers invoked a cone of silence, saying “we do not discuss our plans or internal investments.”
Well, hey, somebody’s been discussing this particular plan, if not the specific investment terms pertaining to it, because this has not been a particularly well-kept secret. Information has leaked out about it, some of it perhaps intentionally, for some time.
The negotiations relating to Insiemi will be about remuneration, deliverables, and timelines. Cisco will tie compensation to the realization of specific objectives. Now that it has come this far, getting reported in the New York Times, I doubt that it will go back into mothballs. It’s doubtless moving ahead.
So, what does that tell us?
Well, it tells us a few things. First, it indicates that Cisco felt it again needed the services of its spin-in wrecking crew, the team that came to Cisco initially in its first-ever acquisition, of Crescendo Communications back in 1993. That brought Cisco the Catalyst line of switches, which was no small prize, along with a talented roster of personnel that played a significant role in the company’s growth into an industry giant. After coming to Cisco, Crescendo’s engineering stars — they would be in Cisco’s Hall of Fame, if such a thing existed — then were involved in Cisco’s highest-profile spin-in efforts: Andiamo for storage networking, and Nuova, which developed data-center technology that found its way into Nexus switches and UCS blade servers.
That Cisco felt it needed the spin-in touch, especially involving this particular group of engineers, also tells us implicitly that Cisco didn’t feel the job could be done by the teams it already has working inside the company, including David Yen’s Server Access and Virtualization Technology Group (SAVTG). That’s interesting in and of itself, because Yen came over from Juniper Networks to effectively take the reins from Mazzola, Cafiero, and Jain, who then transitioned to “support Cisco in an advisory capacity.” In that advisory capacity, which they assumed last spring, the trio reported to John Chambers directly, not to Yen’s bosses, senior vice presidents Padmasree Warrior and Pankaj Patel.
Potentials Risks As Well As Rewards
And now they’re back in the spin-in saddle, and you can make of that what you will. Rest assured, however, that much will be made of it on the Cisco campus . . . which brings us to the third thing that this move tells us.
These spin-in moves are not universally popular within Cisco Systems. While Cisco had entirely valid business and technology reasons for instituting its spin-in model, the practice has generated much internal discord and friction. Cisco employees not chosen to participate in the spin-in ventures have been known to become alienated and invidious. (I suppose “pissed off” might sum it up, but we usually aim for a higher order of decorum and eloquence around here.)
That was one of the reasons that I wondered, back in the spring of 2010, whether Cisco might have retired its spin-in move. While some external observers contend that Cisco overpays for its spin-in ventures, Cisco insiders who don’t get to travel on the spin-in express aren’t pleased about left behind on the station platform. In 2008, former Cisco executive Jayshree Ullal, who now serves as CEO of Arista Networks (more on which later), made the following comment to Forbes about the malignant consequences of spin-in ventures:
“Spin-ins are a creative model to accelerate innovation and bring in engineers you couldn’t normally recruit–and financial gains go to entrepreneurs, not venture capitalists,” says Jayshree Ullal, a 15-year Cisco veteran who built the 7000 then left last May as the Nuova people came back in. “But it’s a nightmare when the guy in the next cubicle is a multimillionaire and you aren’t, because you weren’t chosen.” She left Cisco for personal reasons, she says, adding that she had to deal with a lot of unhappy employees over the spin-in structure.
Cisco Takes SDN Threat Seriously
So, there will he happy employees and unhappy ones at Cisco, those who get tapped for the not-so-secret spin-in society and those who get left behind to maintain the workaday business. How troublesome that becomes, and whether it results a new stream of defections, remains to be seen.
One of those previous defections involved the aforementioned Jayshree Ullal, now CEO of Arista Networks. I intimated above that Arista figured into this story, and it does, as do Nicira Networks and the new breed of SDN purveyors.
If Cisco is betting big on a Mazzola-Cafiero-Jain spin-in venture related to SDN — and past performance tells us that these ventures are never small wagers — it tells that the Cisco takes very seriously the threat posed in the data center by Arista, which has staked its own SDN ground, and by SDN startups such as Nicira.
Cisco’s conception of SDN, as fashioned by its spin-in wrecking crew, might diverge in interesting ways from those others have put forward. Watch how terms are defined, and who does the defining, as the battle for hearts, minds, and wallets intensifies.