The Software Defined Networking (SDN) market just got more complicated. Nothing demonstrates that more than the rumors floating around the alleged declining value of private startup Big Switch. Our friend Craig Matsumoto, whom we interviewed here a few weeks back, scooped rumors that Cisco may be floating an offer in the $100 million range.
Just a year ago, Big Switch was hot. It rasied $25 million in a Series B funding round, topping up total funding in the ballpark of $40 mllion. It was nabbing high-profile employees from competitors, like Cisco’s Prashant Gandhi. It has big VC names behind it, such as Redpoint Ventures, Khosla Ventures, Index Ventures and Goldman Sachs.
(If you don’t have any idea what SDN is, read our Dummy’s guide, “The How and When of SDN.”)
So, these murmurs that Big Switch is considering offers in the $100 million range are disappointing, considering that it was once said to have a valuation closer to $200 million. It has led to unkind headlines, such as Network World’s “Cisco Catching a falling Big Switch?”
A key quote in that story?
“Nobody wanted to be dependent on Big Switch,” Gartner analyst Joe Skorupa told Network World writer Jim Duffy.
This is an old story in technology. It’s called Fear, Doubt, and Uncertainty (FUD). It’s the great challenge of startups — how do you convince your customers that your a more reliable and will be around a long time than the giants with whom you compete?
Big networking vendors are stepping up their game in SDN, responding to the upstarts. VMware ramped up its SDN strategy based on its NSX technology (acquired through Nicira), and Cisco is slowly migrating to SDN-like functionality with its own initiatives.
It just goes to show you how fast things can change in the private company market — and why SDN will be rife with change and disruption. One minute you are hot, the next minute you are not.
That leaves independent companies such as Big Switch in a tricky position. They’re a bit small to convince the entire market to go to their software approach, so clearly a partner might be necessary.