Cumulus Networks is emerging as one of hottest Software Defined Networking (SDN) startups with a valuation recently estimated in the $300 million range, according to research by the Rayno Report that will be released next month in our exclusive SDN Startup report.
The high-profile deal with Dell announced in January was the key driver for Cumulus, with that partnership already producing revenue in some key data-center accounts. That helped catapult Cumulus to the next level and probably gives it the most momentum of any SDN startup. Cumulus has raised $51 million total and is backed by Andreessen Horowitz, Battery Ventures, Sequoia Capital, and Wing Ventures.
It’s clear that Cumulus, with its model of de-coupling the networking operating system from the hardware, is now perceived as one of the leaders in the SDN startup market, according to a number of sources in the industry, including venture capitalists and executives. I’ll be ranking Cumulus among a group of at least 12 companies when when I release my SDN Startup report next month. It will have a price, which has yet to be determined. The free analytics report is still available here.
Although Cumulus officials say they’re “not an SDN solution,” Cumulus does provide one of the key building blocks to SDN: It’s marketing its own flavor of the Linux OS, which can be loaded on so-called “bare metal” switches to provide the foundation for all sorts of SDN applications.
In the business, this is known as “disaggregation,” which is fundamental to the vision of SDN: Enterprises and service providers will buy different components of their networking gear from different vendors, and mixing and matching software on top of bare metal hardware to build a custom solution. This was the vision behind Cumulus’ big deal with Dell, announced in January.
Currently Cumulus is focused on data-center switching, specifically on what people in the business call “top of rack,” or the aggregation switches which connect the many racks of servers in the data center.
“Our big deal was the big partnership with Dell,” said Reza Malekzadeh, VP of Business with Cumulus, when I interviewed him recently. “What you can expect to see from us, is to execute on that (Dell partership). We don’t believe this is a niche opportunity.”
Other companies are positioning their own Linux-based operating system for the SDN market, for example, Big Switch has Switch Lite. But Big Switch has struggled with a big management shift and is trying to turn around its loss of momentum when it made the decision not to participate in the OpenDaylight project, a move in 2013 that was widely criticized by people in the industry and led to some confusion about Big Switch’s strategy. Big Switch more recently has focused on OpenStack, submitting Switch Light to the Open Compute initiative.
Cumulus has an interesting position in that its flavor of Linux is proprietary, but Linux itself is open source. Some people might draw comparisons between Cumulus and Red Hat (RHAT), another producer of software for the Linux market, but they are really different models: The Cumulus Linux OS is not open source, and the company doesn’t give it away for free. Cumulus makes money by selling a software license which includes the Linux components. They also sell maintenance subscriptions.
Cumulus’ Malekzadeh says it can both market a proprietary flavor of Linux and combine its own innovations with that of the open Linux community. And he also says the Dell deal will be very successful and an important one for the SDN movement.
“We think Dell is very much aligned with our vision of disaggreating hardware and software,” said Malekzadeh. “They will make their switches today with or without OS. Cumulus Linux will be one of those operating systems, it will be one of many. It means a validation of the vision, and this is a Tier 1 supplier that is reselling our software.”
Cumulus won’t confirm the amount of revenue associated with the Dell deal so far, but people tell me it’s going well and it has shipped switches into at least one large scale data center. It’s clear that this partnership is one of the key developments to watch as the disaggregated switch model starts to take hold.