New Technology Adoption Survey Data & Analysis, April 15, 2015. Presented at Ethernet Technology Summit

1. Ethernet Buyer Behavior
New Technology Adoption Survey Data & Analysis
April 15, 2015

2. Page 2
Waves are Driven by the Wind
The bigger the wind, the bigger the wave.

3. They all came together in 2014
1980 1985 1990 1995 2000 2005 2010 2015 2020
Contract Manufacturer
Original Design Manufacturer & Open Source Hardware
Original Equipment Manufacturer
Enterprise IT
Hyperscale driven innovation
New class of OEMs
Integration of mobile and wireless
Webscale IT
Open-Source Software
Commercial Versions of Open-Source Cloud Platform
Hyperscale Computing
Wired/Wireless Carrier ICT & Smartphone Manufacturer

4. 3 Market Dynamics Changing Enterprise IT
4
#1 Public Cloud
IaaS
#2 Software Defined
Data Center
#3 White Box

5. 5
Cloud

6. Public Cloud IaaS
6
$-
$5
$10
$15
$20
$25
$30
2010 2011 2012 2013 2014 2015 2016
Worldwide Infrastructure-as-a-Service Revenue ($B)
Displacing traditional on premise servers,
storage and networking infrastructure.
Source: Gartner & Forbes

7. Public Cloud IaaS
Percentage of On-Premise Spending Replaced by Cloud Computing
0%
2%
4%
6%
8%
10%
12%
14%
16%
2008 2010 2012 2014 2016 2018 2020
Over 15% of the traditional enterprise
networking equipment market disappears into
the public cloud in the next 5 years.

8. Enterprise Infrastructure Leader Trajectory
8
2010 2011 2012 2013 2014
Cisco 40.0 43.2 46.1 48.6 47.1
Dell 52.9 61.5 62.1 56.9
EMC 17.0 20.0 21.7 23.2 24.4
HP 126.0 127.2 120.4 112.3 111.5
IBM 99.9 106.9 104.5 99.8 92.8
0
20
40
60
80
100
120
140
Billions
Private
Traditional Enterprise IT Leader Revenue Trend

9. 2014 On-Premise IT
& Cloud Service
Brand Leaders
Voted by IT Pros
On-Premise Backup EMC Dell EMC EMC EMC EMC
On-Premise Enterprise
Networked Storage
EMC Dell EMC EMC EMC NetApp
On-Premise Dedicated Enterprise
Server
HP Dell HP HP HP HP
On-Premise Virtual Server VMware VMware VMware VMware VMware VMware
On-Premise Virtual Desktop VMware VMware VMware VMware VMware VMware
Cloud Backup Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS)
Cloud Enterprise
Networked Storage
Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS)
Cloud Dedicated Enterprise Server Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS)
Cloud Virtual Server Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS)
Cloud Virtual Desktop Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS) Amazon (AWS)
Overall Backup (On-Premise/Cloud) EMC Dell EMC EMC Amazon AWS Amazon (AWS)
Overall Enterprise Networked
Storage (On-Premise/Cloud)
EMC Dell EMC EMC EMC NetApp
Overall Dedicated Enterprise Server
(On-Premise/Cloud)
HP Dell HP HP HP HP
Overall Virtual Server
(On-Premise/Cloud)
VMware VMware VMware VMware VMware VMware
Overall Virtual Desktop
(On-Premise/Cloud)
VMware VMware VMware VMware VMware VMware

10. 10
SDDC

11. Software Defined Data Center
11
Predominant Architecture Today Predominant Architecture in 10 Years
Software Defined Servers (Server Virtualization) Software Defined Data Center

12. I expect the enterprise SDN ecosystem to most likely
evolve in the following way:
12
0% 20% 40% 60%
Other
Open switch OS leaders such as Cumulus will
dominate enterprise SDN
Open Linux and cloud platform leaders such as
Red Hat will dominate enterprise SDN
Enterprise virtualization software leaders such as
VMware will dominate enterprise SDN
Cisco will dominate the SDN era just like they
dominate the current era of hardware defined
networking.

13. Are vendors talking to you about evaluating, purchasing
and deploying:
13
0% 20% 40% 60%
Other
None of the above
SDN orchestration software
NFV apps (router, firewall, load balancer, etc.)
Cloud operating system (OpenStack)
Software defined storage (object, block or file)

14. Which of the following SDN/NFV products do you
expect to evaluate or deploy in 2015?
14
0% 10% 20% 30% 40% 50%
Other
None of the above
Virtual Router
Virtual NICs
Virtual Firewall
Virtual Load Balancer
Virtual Switches

15. My team knows that SDN and NFV are deployed by
giant hyperscale environments, but:
15
0% 20% 40% 60%
Other
There are no buts, we think the SDN/NFV,
products and support are ready for our enterprise.
We would like to hear from other IT teams who
have deployed SDN/NFV
None of the above
We are evaluating SDN/NFV now
We have not evaluated SDN/NFV technology and
products
We have not learned enough about SDN/NFV
technology and products to consider evaluating

16. What percentage of all (server, storage and switch) network
ports in your data center are:
16
0% 20% 40% 60% 80%
56Gb InfiniBand
10/20 Gb InfiniBand
1/2/4Gb Fibre Channel
40Gb Ethernet
40Gb InfiniBand
16Gb Fibre Channel
8Gb Fibre Channel
100Gb Ethernet
10Gb Ethernet
1Gb Ethernet

17. Which of the following high-speed Ethernet products do you
expect to evaluate or deploy in 2015?
17
0% 10% 20% 30% 40% 50%
100Gb NICs
25Gb NICs
None of the above
100Gb Switches
25Gb Switches
40Gb NICs
40Gb Switches
10Gb NICs
10Gb Switches

18. My understanding is the 25G Ethernet standards:
18
0% 20% 40% 60% 80%
Other
A standard for this speed will
never be developed
Were ratified in 2014
Are still not ratified

19. This percentage of our 10Gb NICs are deployed in our
data centers:
19
0% 20% 40% 60% 80%
In non-virtualized servers
In virtualized servers

20. This percentage of our 10Gb NICs are:
20
10% 20% 30% 40% 50% 60%
Partitioned into virtual
NICs
Not partitioned into
virtual NICs

21. Are you aware that today you can create multiple virtual 1GbE
NICs out of one or more 10GbE NICs, efficiently splitting the
bandwidth and lowering operating costs?
10.3%
24.0%
32.7%
33.0%
0% 10% 20% 30% 40%
No, if I had known, I would have started using 10GbE
NICs
No, but it won’t change my practice of using multiple
1Gb NICs
Yes, I knew and that’s a big reason why I started
using 10GbE NICs
Yes, I knew but it didn’t change my practice of using
multiple 1GbE NICs

22. I want to manage my virtual network resources from
(select all that apply):
3.5%
15.2%
26.8%
33.8%
66.7%
0% 20% 40% 60% 80%
Other
Overarching manager of managers
(HP OpenView, CA Unicenter, IBM…
Best-of-breed software for individual
solutions
Switch/Fabric management software
Server virtualization hypervisor
(VMware, Hyper-V, Xen)

23. 23
2015 Ethernet,
Networking & SDN
Brand Leaders
Voted by IT Pros
FCoE Switches Cisco Brocade Cisco Brocade Cisco Brocade
Ethernet Core Switches Cisco Cisco Cisco Cisco Cisco Cisco
Ethernet Top of Rack Switches Cisco Cisco Cisco Cisco Cisco Cisco
Enterprise Ethernet NICs Intel Intel Intel Intel Intel Intel
Ethernet Network Monitoring SolarWinds SolarWinds SolarWinds SolarWinds SolarWinds SolarWinds
Embedded Blade Server Networking HP Dell HP Cisco Cisco HP
SDN Platform Cisco APIC Cisco APIC Cisco APIC Cisco APIC Cisco APIC Cisco APIC
SDN Enabled Switches Cisco Cisco Cisco Cisco Cisco Cisco
Layer 4-7 NFV Services Platform VMware NSX VMware NSX VMware NSX VMware NSX VMware NSX VMware NSX
SDN Monitoring Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON) Microsoft (DEMON)
Bare Metal Switch OS Cumulus Linux Cumulus Linux
Big Switch
(Switch Light)
& Cumulus Linux (tie)
Big Switch
(Switch Light)
Big Switch
(Switch Light)
Cumulus Linux
Open Networking Switch Dell Dell Dell Dell Dell Dell

24. 24
White Box

25. White Box/Bare Metal Switches
25
ODM
Vendor
(Quanta, Hon Hai,
Accton, Celestica)
Brand
Vendor
(Dell, HP, Cisco,
EMC)
Traditional
Customers
(Business, Gov,
Education)
Specialized
Customers
(Cloud, Carrier)
Hardware specification, design,
assembly and procurement, some
firmware and software support
Repair and maintenance, less of IT
consulting and software for these
IT savvy customers
HW assembly, design & components IT consulting, maintenance & repair
Traditional Model
New Business Model

26. Traditional , White Box & Brite Box Switch Models

27. Building on Bare Metal
ONIE is the
Open Network
Install
Environment,
and Open
Compute
Project open
source initiative
contributed by
Cumulus
Networks

28. OCP Wedge Switch Architecture
Switch ASICs: Broadcom, Intel, Mellanox, Accton
Big Switch – Switch Light OS
Cumulus - Cumulus Linux
Pica8 - PicOS NOS
FBOSS – Facebook NOS

29. Facebook Six Pack
29
Facebook's Six Pack switch is a 7RU chassis that includes eight of its
Wedge switches and two fabric cards (Photo: Facebook)

30. Which of the following open networking switch
products do you expect to evaluate or deploy in 2015?
30
0% 20% 40% 60%
Non-branded white box switches from
hyperscale providers Quanta or Accton, running
an open switch operating system from Cumulus,
Pica8 or BigSwitch
None of the above
Branded white box switches (Brite Box)
switches from Dell or HP, running an open
switch operating system from Cumulus, Pica8 or
BigSwitch
We will not be evaluating or deploying open
networking switch products

31. Obstacles to my IT organization considering open
networking switches are:
31
0% 20% 40% 60%
Other
None of the above
References from other IT organizations that
have deployed open networking switches
Vendors are not talking to us about open
networking switches
We don't believe new open networking switches
will be as reliable as switches from current…
We don't know enough about open networking
switches to consider them

32. We need the following protocols supported
simultaneously in our data centers:
32
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
NVGRE for tunneling L2 traffic over L3 networks
RDMA for low-latency scale-out traffic across the
data center
RDMA for low-latency cluster interconnects
VXLAN for tunneling L2 traffic over L3 networks
Fibre Channel over Ethernet for storage area
networks
iSCSI for for storage area networks
Fibre Channel for storage area networks
TCP/IP for LAN and NAS traffic

33. 33
POV

34. Inflection Point Business goes on
to new heights
10x change in an element of the business.
What worked before doesn’t work now.
The executives are the last to know.
Source: Only the Paranoid Survive, by Andy Grove
Business declines
>$5B R&D
Hyperscale, Carrier & Enterprise
Unified Wired & Wireless
NFV Apps
SDN Orchestration
Open Source NOS
Bare Metal Switches
What it takes to win

35. A Winning Formula
35
Programmable Switch OS SDN Tools
Enterprise-class Hardware

36. The Result: Arista Revenue & Net Income
36
$140
$193
$361
$570
$13.8 $9.6 $20.8
$73.0
0
100
200
300
400
500
600
2011 2012 2013 2014
Millions

37. Maybe a Winning Strategy: Go Private and
Double Down on Open
Jan., 2014 - The shift toward open data center and networking technologies
got a boost this week when Dell announced a reseller deal to offer Cumulus
Networks' Linux network OS for bare-metal switches.
Through the partnership, Dell said it will offer Cumulus Linux network OS to
customers as an option for its S6000 and S4810 top-of-rack switches.
The new strategy from Dell is the latest effort to decouple networking
hardware from the underlying software. Proponents say disaggregating
networking components will enable companies to significantly reduce their
data center and network costs as they look to embrace the software-defined
networking trend and get away from paying a premium for tightly integrated
network stacks from a single vendor.
"I believe there's a big market opportunity for using standard x86 hardware
modules for low-cost switches," John Abbott, distinguished analyst at The 451
Group, said via email. "The network is heading in the same direction as
servers and storage."
Dell, which is in the midst of re-inventing itself as a private company in the
post-PC era, wants to capitalize on that opportunity.
Dec., 2014 - Dell has added Midokura to its Open Networking initiative to
include Midokura. The deal includes a joint go-to-market program,
validated reference architecture and global reseller agreement.
Midokura’s Enterprise MidoNet software will now be available on Dell
infrastructure, delivering a network virtualization overlay for OpenStack that
helps enterprise customers and service providers create an agile cloud
networking infrastructure based on open technologies.
Dell said MidoNet fits well with its existing partnership with Cumulus
Networks for its Linux operating system. The Dell, Cumulus Networks and
Midokura solution enables a growing number of service providers and
enterprise customers to provision scalable virtual networks to connect to
physical workloads in a matter of minutes. Midokura MidoNet leverages
Dell switches to facilitate network traffic flows from virtual machines to non-
virtualized, physical workloads such as high-performance databases, email
servers and legacy systems at line rate.
What this shows is that we’re actively connecting the dots with like-minded
companies to upend the traditional, black-box model of networking,” said
Tom Burns, vice president and general manager, Dell Networking. “That
old model is too rigid, too locked and too slow to innovate. Dell’s Open
Networking initiative is about being open, flexible and software-defined to
help maximize our customers’ application environments.”
Acquire & Partner for SW Offer Bare Metal Switches

38. Maybe a Winning Strategy: Divest HW, Focus on
Software & China
March 26, 2015 - H-P Nears Deal to Sell Control of Chinese Unit
Tsinghua Unigroup has emerged as the preferred bidder in an auction of 51%
of the business, H3C Technologies Co., the people said. A deal between the
two parties, which could also include a separate server operation, may still be
a few weeks away and there is no guarantee another bidder won’t re-emerge,
one of the people said. Tsinghua Unigroup had been competing with other
bidders for the business, which is worth roughly $5 billion in total, including
China Huaxin Post and Telecommunication Economy Development Center,
people familiar with the matter said.
H-P, driven by the issue to seek a buyer for the business, limited the list of
bidders for H3C to domestic companies in order to win Chinese government
approval for the sale and boost the prospects for the operation there.
Purchasing control of H3C would give Tsinghua Unigroup, a company funded
by the prestigious Tsinghua University, a major presence in China’s
networking gear market after it recently purchased two of China’s largest chip
designers. In September, Tsinghua Unigroup also signed a strategic alliance
with Intel Corp. that gave the U.S. chip maker 20% of the Chinese company’s
shares for a price of $1.5 billion.
H3C is a major supplier of corporate-data networking gear in China. H3C,
which H-P inherited when it bought 3Com Corp. in 2010, has 5,000 employees
world-wide, according to its website.
March, 2015 - The networking division at HP has had a chequered past.
Under some CEO's it has been seen as important to the business but
under others it has been left to rot. In 2013, HP revamped its networking
division and put Bethany Mayer in charge. Despite a successful tenure,
last year it spun out Network Functions Virtualisation (NFV) into its own
division and appeared to move Mayer sideways. The result was that six
months later, Mayer bailed for a better job at Ixia.
Since then, HP has been fairly quiet about networking, despite its
importance to HP's cloud strategy. HP has invested a lot of money into
Software Defined Networks (SDN), NFV, is a leading vendor in
OpenDaylight and OpenStack. As a result HP's silence has been confusing
to the market. Now it has announced it is to buy Aruba Networks for a
substantial $3 billion but when cash at hand is taken into account, HP will
pay a net $2.7 billion.
The market will be looking closely at this one and wondering if this will be a
good or bad move for HP.
By acquiring Aruba Networks, HP will also strengthen its wider security
intelligence offering. It will be able to gather much more detail about mobile
networking traffic. This is something that only a few of its security,
networking and cloud competitors such as Cisco, IBM and Huawei are in a
position to do.
Invest in SW & Wireless Divest in HW, gain access to China

39. Vendor Switch
Past: Enterprise HW Defined Ecosystem
Vendor Switch OS
Appliances
Router
Firewall
Load Balancer
Etc.
Vendor NOS
Orchestration
Monitoring
Vendor Storage Software
Failover
DeDup
Compression
Etc.
Server Virtualization
ESX
Hyper-V
Xen
KVM
Vendor/Merchant Switch ASIC
Vendor Storage System Vendor Server
Cisco & Dwarves EMC & Dwarves HP, IBM, Dell, Lenovo
Merchant Server OS
Merchant Server Processor
Vendor Block, File, Object OS
Merchant Server Processor

40. White Box Server
Cloud Platform (vCloud, Azure + commercial versions of OpenStack)
Future: Enterprise SW Defined Ecosystem
NFV
Router
Firewall
Load Balancer
Etc.
SDN
Orchestration
Controller
Switches
Monitoring
Software Defined Storage
Block
File
Object
Failover, Dedup, Compression
Server Virtualization
ESX
Hyper-V
Xen
KVM
Merchant Server OS
Bare Metal Server
Merchant Server Processor
Today many pure-play start-ups in SDN, NFV, software defined storage and switch OS segments
White Box Switch
Merchant Switch OS w/SDN agents
Bare Metal Switch
Merchant Programmable Switch ASIC

41. 10 Year History of Software Defined Servers
41
0%
20%
40%
60%
80%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Workloads Virtualized
Workloads Not Virtualized
Source: Gartner

42. Software Define Storage in 10 Years (Forecast)
42
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Enterprise SDS
Traditional Enterprise Storage
Hyperscale SDS
Cloud OS Orchestration
Storage Apps
White Box Servers
Hosted Private Cloud
On Premise
Private Cloud
Public Cloud
Source: Wikibon & IT Brand Pulse
Commercial versions of open-source
based Enterprise SDS

43. Software Defined Networking in 10 Years (Forecast)
43
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Enterprise SDN
Traditional Enterprise Networking
Hyperscale SDN
SDN Orchestration
NFV Apps
White Box Switches
Open Switch OS
Hosted Private Cloud
On Premise
Private Cloud
Public Cloud
Source: IT Brand Pulse
Commercial versions of open-source
based Enterprise SDN & NFV Apps

44. Coming Soon
An Epic Land Rush for the Wide Open Software Defined
Data Center

45. You won’t have to buy the whole album to get
one app
Network
Software
Suite
Network OS
Network OS
QOS
Load Balancing
Firewall
Network Monitoring
IPv6
Encryption
FCoE
WAN Opitmization
VXLAN
Network OS
Network OS
Network Services
Eagles
Justin Timberlake
Pit Bull
MC Hammer
U2
Marvin Gaye
Mariah Carey
Rolling Stones
Rolling Stones
Usher
Miley Cyrus
Bruce Springsteen
OpenStack Apps

46. Data Center App Innovation will Explode

47. Page 47
IBM is Ahead in the Race to Pass the Hardware Baton

48. Page 48
1985
Vertical Integration
Sell
Mfg.
Design
US RoW
2005
Original Design Manufacturer
Sell
US RoW
2015
Original Equipment Manufacturer
US RoW
1995
Contract Manufacturer
Sell
US RoW
Design
A New Group of HW OEMs are Ready to Carry the Baton

49. Page 49
Same Servers, New Perspective
89%
12%
36% 36%
IBM Lenovo
Software
GM%
x86 Server
GM%
x86 Server
GM%
PC GM%

50. Page 50
First Movers
Net Worth
Mark Zuckerberg $33B
Larry Page $32B
Jeff Bezos $30B
Sergey Brin $30B
Jack Ma $26B
Ma Huatang $15B
Robin Li $15B

51. Late Movers
Cost Cutting
Traditional Enterprise Infrastructure PC Client Computing
Mergers & Acquisitions
Stock Buybacks