With the recent closure of the NVIDIA-Mellanox deal, NVIDIA has Ethernet switches, cables, and adapters but does not have the same levels of network management and telemetry software that its chief rivals have. In an interesting move, NVIDIA announced it is making another acquisition in the network space with a plan to purchase Cumulus Networks.e3-1245
NVIDIA Acquires Cumulus Networks
Cumulus Networks is a company based only a few blocks from where I live in Mountain View, California. The company was a pioneer in the disaggregation of network software and hardware.
Through its work over the years, we now have high-performance switches that can utilize Cumulus’ Linux-based software for management and telemetry. An example of this we covered in Facebook Minipack Switch Partnering with Edgecore and Cumulus. Part of Cumulus’ innovation was bringing ONIE to the networking industry that allows products such as its software along with SONiC, ONL, and others to be loaded on white box switches as we discussed in our Edgecore AS7712-32X switch overview.
One of the big questions that NVIDIA will need to answer for the market is what its strategy is for Cumulus. In terms of open networking, SONiC has much more momentum in the market than Cumulus. We see both OEMs such as Dell EMC as well as large hyper-scale companies investing in SONiC. If NVIDIA goes the other direction and turns this into the NVIDIA version of Cisco’s IOS or Arista’s EOS, then other companies such as Edgecore, Delta, Celestica, and others that use Cumulus may de-prioritize support. For products such as the Ubiquiti UniFi USW-Leaf 48x 25GbE and 6x 100GbE Switch we did the hands-on overview of, they are basing their product line on a version of Cumulus software. Cumulus is now part of a competitor in the hardware space which can make that problematic.
One question is whether Cumulus was the better buy, and if so, why Arista would pass on Cumulus buying Big Switch Networks only a few months ago. With the recent market downturn plus the plucking of its chief rivals, perhaps the Cumulus valuation became extremely attractive. If NVIDIA is embarking on a strategy of building a networking business out of the ashes of an economic downturn, that could be extremely interesting as a strategy.
Cumulus Networks is one of those well-known and established software-defined networking players in the market. While it gained a lot of stature, it never went on a hyper-growth trajectory to billions in annual revenue. These kinds of companies that build a brand and important technology often need an acquisition like this NVIDIA-Mellanox deal to change business models and trajectories that they can breakout.