An Ignoble Experiment

2. Amazon's new 'WorkSpaces' provides cheaper VDI than you ever will (but so what?)

Cisco, after some early dawdling, has been pushing hard lately into Software Defined Networking.

November's big and perhaps slightly confusing announcement--the existence, launch and purchase of standalone unit Insieme--was followed this week by news of Cisco expanding its Application Centric Infrastructure offerings beyond the Nexus data center product line and out to the distributed network. A new "enterprise module," available as a hardware or virtual appliance, will support existing equipment, APIs and networking protocols.

However, Cisco's SDN efforts came in for some heavy criticism from analysts at JP Morgan. The Wall Street firm lowered its rating on Cisco stock from 'Neutral' to 'Underweight'--meaning JP Morgan advises investors to reduce their Cisco holdings.

JP Morgan disputes Cisco's assertion that its products can achieve a lower total operating cost than bare-metal setups, and says the networking giant will face ongoing difficulty maintaining its profit margins as SDN continues to gain market acceptance.

The Fierce Take: It's always worth remembering that analysts have no incentive to be gentle when they lower a stock outlook. But also worth remembering is the anonymous Cisco source quoted in Business Insider, saying SDN might turn Cisco's high-margin switches "from a $43B business into a $22B business."

For more:
- read Network Computing's article about Cisco's ACI enterprise module
- and Network World's and Barron's coverage of the JP Morgan criticism

More on Software Defined Networking (SDN):
Security in SDN: Not necessarily worse, maybe better, but definitely different
SDN: Time to get down to business in 2014
Spotlight: Orchestrating your software-defined network
Exciting Ethernet predictions for 2014

Read more about: software defined networking
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By Derek C. Slater

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3. AT&T broadens enterprise cloud appeal via Equinix partnership

Two of the knocks on desktop virtualization have been cost and complexity.

Big DaaS providers (that's Desktops as a Service) like Amazon's new Amazon WorkSpaces can build your VDI infrastructure much cheaper than you can, argues Brian Madden.

Why? The simplest answer is "scale," but Madden walks through a much more detailed (and interesting) explanation.

The most significant factor lies in Amazon's ability to mass-purchase exactly the type of hardware necessary. You, the IT Director, are likely stuck buying rack-mounted servers at best and off-the-shelf PC-style servers at worst. Those boxes contain a lot of air, a lot of unnecessary parts and an incredibly redundant and inefficient power supply.

Regarding power, Madden says:

"Let's take a fresh look at this. The power coming into your datacenter is, what, 480 volts? Maybe 270? Then it's cut down to 110, run down your aisle where a pair of power supplies (in every server!) convert it to DC with outputs at 12, 5 and 3.3 volts. Why are we going through all that conversion effort, thousands and thousands of times, in tiny little inefficiency circuits in metal boxes inside other metal boxes inside bigger metal boxes that we bought from our server vendor?"

So big cloud providers are buying (or building) much simpler and more efficient servers.

(Google, as previously noted, makes its own network switches for the same reason.)

Madden's bottom line is not that on-premise VDI is always the wrong choice, but that on a cost basis DaaS providers will always win.

Readers commenting on Madden's article raise several interesting points:

- Latency can be a problem for some applications and user requirements.
- Amazon and others don't necessarily pass cost savings along to the customer.
- Pure hardware isn't the only cost involved; resource utilization levels also matter.

For more:
- read Madden's post (and the comments!)

More on Virtual Desktop Infrastructure (VDI):
Spotlight: VMware puts its money where mobility is
Desktop virtualization debate rages on
Microsoft's Virtual Desktop license costs send customers in search of workarounds [FierceCIO]

Read more about: Data Centers, servers
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By Sean Buckley

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4. Enterprise service architecture for mobile era

AT&T is giving its existing VPN network customers another cloud connection option by embedding its NetBond technology into a number of Equinix's data centers.

The telco's VPN users can now use the NetBond technology to connect their cloud services via its private VPN networks. Because it is a private service, it is not prone to the dangers of the public Internet.

Besides providing a secure connection, NetBond dynamically allocates VPN bandwidth, allowing customers to use as much or as little as they need.

This alliance will enable other cloud providers to allow access to their services via AT&T NetBond from Equinix's growing set of global data center sites.

Mike Sapien, Principal Analyst for Enterprise at Ovum Research, said in an interview with FierceTelecom that partnership has potential benefits for both companies and their customers.

"AT&T gets access to Equinix's customers and becomes part of the ecosystem there for customers to use them for network, cloud services and other related services," he said. "Equinix gets access to AT&T's global network, private interconnection (NetBond) and also AT&T customers who may want to be in a neutral data center versus AT&T's data centers. Although this is primarily for large customers and private cloud services, there is no reason that the customers can't expand into other cloud services and public network options."

Both companies said the new capabilities will be available in the first half of this year.

Cloud services have become a bigger factor in AT&T's business services portfolio and its overall IT infrastructure. In 2013, the telco said that it put nearly 20 percent of their internal apps into the cloud.

AT&T has been expanding its cloud strategy through a mix of its own internal capabilities and through a growing network of partners. In addition to Equinix, the service provider has established alliances with IBM, Microsoft and CSC.

Through its agreement it announced with CSC last year, the systems integrator will be able to deliver its BizCloud and other cloud services via AT&T's cloud infrastructure and networks, for example.

Given their moves with Equinix and other data center providers, Sapien said that he would not be surprised if AT&T pursues similar partnerships with additional players in this market segment.

"They already have IBM, CSC and MSFT alliances around their cloud services and I expect to see more of these and potentially more global locations to both lessen the capital demand of growing data centers globally and also expanding its services into global regions for its MNC customers and others," he said.

Growing these relationships makes sense for AT&T, especially as it looks to drive new cloud and VPN revenues to offset legacy business service declines. In Q4 2013, sales of strategic business services such as VPN, Ethernet and cloud grew 17.4 percent over Q4 2012 and now represent a $9 billion annualized revenue stream.

For more:
- see the release

Read more about: AT&T, Equinix
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By Derek C. Slater

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