Google's 10-GigE Assault
It is our opinion that Google (Nasdaq: GOOG) has designed and deployed home-grown 10-Gbit/s Ethernet switches as part of a secret internal initiative that was launched when it realized commercial options couldn't meet the cost and power consumption targets required for their data centers.
This decision by Google, while small in terms of units purchased, is enormous in terms of the disruptive impact it should have on 10-Gbit/s Ethernet switching equipment providers and their component supply chains. It is as if a MACHO just arrived in the Enterprise networking business and the orbits of the existing satellites have begun to shift without observers knowing why - until now.
We were watching shipments of SFP+ components for 10-Gbit/s Ethernet in the market but simply couldn't account for their end destination - sort of an optical component dark matter problem. After a great deal of investigation we have reached the following opinion:
Through conversations with multiple carrier, equipment, and component industry sources, we have confirmed that Google has designed, built, and deployed homebrewed 10-Gbit/s Ethernet switches for providing server interconnect within their data centers. This is very similar to Google's efforts to build its own server computers. Google realized that, because its computing needs were very specific, it could design and build computers that were cheaper and lower power than off-the-shelf alternatives. The decision to do so had a profound impact on server architecture and influenced the market's move to lower power density solutions that Sun Microsystems Inc. , Intel Corp. (Nasdaq: INTC), and Advanced Micro Devices Inc. (NYSE: AMD) now embrace.
It now appears that the process Google trailblazed in the server computing market will repeat itself in the enterprise switching market. Given the relative dearth of low-cost 10-GigE switching solutions, it isn't surprising to see Google revisit this approach.
Read the rest at The Nyquist Condition. — Andrew Schmitt, Nyquist Capital