Even routers are going virtual – Insieme & Cisco
This is interesting. We know that Cisco routers form a large percentage of the internet traffic yet that is now about to be disrupted by Software Defined Networking (SDN). Cisco are smartly not allowing this trend to get ahead of them and have been secretly working through a Cisco funded start up, Insieme, to remain firmy part of the new trend.
One of the key drivers was when Amazon replaced a planned purchase of $1bilion of routers with an $11 million purchase supported by SDN software.
SDN is a huge threat to Cisco because it changes the way companies build networks. It takes the high-end features built into expensive routers and switches and puts them into software that can run on cheaper hardware. Corporations still need to buy routers and switches, but they can buy fewer of them and cheaper ones. It also leads to all kinds of new startups based on networking software.
As we previously reported, Insieme is technically not part of Cisco, but a startup, wholly funded by Cisco with a $100 million investment. If it does well, Cisco has an option to buy it for $750 million.