SAN FRANCISCO — Michelangelo “Mike” Volpi, the former Cisco Systems executive who is now a venture partner with Index Ventures, sat across from me in the comfy chairs of his company’s office, across the street from AT&T Park. After fighting a traffic jam during game-time to make it into the appointment, I asked him who the Giants were playing.
“Don’t know. The Pirates?” Volpi speculated (it was the Rockies).
Volpi is a European football guy, an AC Milan fan (in fact, I already knew this, and I once played in a soccer game with him). I guess he didn’t care much about baseball. The NL pennant race obviously didn’t interest him.
Another topic: What what about telecom and networking?
“It’s not an industry that’s produced a lot of innovation,” said Volpi.
Okay. Tough Sledding. It’s clear that Mike has been indoctrinated into the world of venture capital, where 90% of things are un-interesting. I was here to find something of interest, though.
As the former Chief Strategy Officer at Cisco Systems Inc. and later SVP of service provider, Volpi helped Cisco gobble up nearly 100 companies over the course of a half-decade. So clearly, he knows how to look at technology. I asked him, is there anything he’s excited about?
“I’m optimistic about the SDN [Software Defined Networking]. The merchant silicon space has come far enough along that it’s pretty competitive. There are a few elements of the supply chain that need to align themselves.”
Aha! SDN! Soon Rayno Report will be coming out with a new TV show, “Everybody Loves SDN.” As I’ve covered here in The Rayno Report, you can’t throw a baseball without hitting some SDN hype these days.
SDN is the next new networking thing. Separating the control plane from the hardware — bringing you the network remote control. You need to pay attention because it’s the “paradigm shift” that could change networking forever, and put Cisco out of business, the way the DVR (digital video recorder) and Netflix have changed the television industry.
We know that. What else has Volpi got?
“Storage is interesting,” said Volpi. “Depending on what you are doing with storage, it creates lot of new storage architectures. You have this phenomenon of the new migration to flash. Security is a permanently interesting sector.”
What happened to service provider networks, and will they every be interesting again?
“The Telecom Act [of 1996] created lots of DSL startups and fiber startups,” explained Volpi. “We made equipment for all those folks. Right now the regulator environment doesn’t favor innovation. The classic service provider market, AT&T and Verizon, that’s a tough nut to crack. The regulatory environment has made it so there are no new comers.”
Is there something — anything — that will make the telecommunications network interesting again?
“I’ll tell you what’s interesting, Softbank being allowed to acquired Sprint,” said Volpi. “Because Softbank is going to do things differently. Imagine if T-Mobile were to be acquired by somebody willing to spend money. But if we end up with only two service providers, that does not make for a competitive marketplace.”
Digging deeper though, there could be something more at work in the global network. As Volpi points out, Amazon Web Services (AWS) has gotten a lot of notice as it becomes the go-to infrastructure for Web applications. How did an online book company become one of the largest data-center providers in the world?
Well, the story is well documented as Amazon built out its gigantic data center and looked for new ways to use it. Why not use that firepower for something else? In essence, Amazon is now a service provider, something the service providers themselves could be too happy about.
To Volpi, this makes the future of networks interesting, because it shifts the balance of power — and the flow of data.
“What AWS [Amazon Web Services] is doing is blowing up the enterprise data center and layering on top of that is SAAS (Software as a Service),” said Volpi. “What’s fundamentally changed is the way traffic flows. If Amazon Web services become prevalent and they become the centerpiece, they can provide enterprise services. There’s enough change in enterprise architecture that classic service providers don’t matter anymore,” said Volpi.
Now that is an interesting statement, coming from somebody who chased service providers around for half a dozen years.
So, let me try to put together the world according to Mike Volpi: Service providers are boring because they are no longer innovating with the network. Amazon is interesting, because it’s shifting the balance of network power — and data flow — to its enterprise data centers. And as data explodes, it provides more opportunity for storage and security vendors.
Finally, SDN is interesting because it will be a low cost way to control the flow of all the information in these new networks, which target an entirely new networking architecture in massive corporate data centers.
That’s good enough for me. That wraps up my visit with Volpi. Thank you, Mr. Volpi. But next time I’ll be looking for Giants tickets.