Will Cisco Be Racked By Facebook’s 6-Pack?

Facebook announced its new network switch custom engineered, 6-Pack, a seven-rack chassis with eight switches wedge 16 and two fabric ports cards.The are 40 Gigabit Ethernet (GbE) switch and top-of- rack full connectivity in the rack, and 6-Pack switch interconnects all top-of-the-rack.

The purpose of this new option is to build a modular platform that can handle the increased network traffic, and is a central element of the new network structure by Facebook (ticker: FB) in November last year. Each item must disclose your operating system on local servers of Facebook and is completely independent of the aspects of change control board low-level cooling system. This means that Facebook can change any part of the system without any impact on the system, software or hardware.

We believe that the news of Facebook are perhaps the clearest example of the slow but sure interruption was heading networking market. This momentum Foundation for Innovation illustrates perhaps open computing future risk of switching commercialization and industry pressure traditional network providers. This supports long-term field of software defined networking (SDN) contraction in gross profit dollars for the industry our vision no matter who wins.

As workloads migrate to the cloud, ie, Amazon.com (AMZN) Web Services (AWS), the need for Cisco Systems (CSCO) (nominal Underperform, $ 20 price target) to shift down. Moreover, over the use of alternative opens, as Arista Networks (ANET) (rated Outperform, $ 90 target price), and internal development as switch Facebook, highlighting the threat to the business of Cisco networks. In the short term the results were solid, but still interested in the long-term growth in gross profit switching.

While Facebook has announced Wedge switch and Linux (FBoss), operating system management Arista noted that these implementations are directed to particular and narrow. Moreover, we see space such as Arista switches as the company builds a highly leveraged the Titans cloud strategy, with a portfolio of raw materials based on silicon and an open and highly programmable, EOS operating system. This, along with the transition to 10GbE and higher, networking is an opportunity for a history of secular and robust growth.