Several networking startups, most of which are actually software companies, launched products claiming to transform networking with SD-WAN, SD-Security, wireless networking with machine learning, guest WiFi services, and various new twists on network virtualization and virtualized routers.  Many of these startups are focused on the SD-WAN market, which IDC forecasts will reach $6 billion by 2020.

The new age networking companies included: Barefoot Networks, 128 Technology, Apstra, Cloud4Wi, Mist Systems, CloudGenix, and SnapRoute. In November, Forward Networks launched out of stealth using formal verification to model network behavior and help prevent outages.

………………………………………………………………………………………………………………………………………………………………..

We believe that Barefoot Networks, headed up by South African Martin Izzard, is the most promising of the bunch and very well funded.  The company announced it’s programmable switch platform in June – touting it as the world’s fastest and most programmable series of switches. Barefoot’s Tofino switch chip can fit inside hardware devices to direct the flow of data traffic across networks, and the company plans to advance SDN though its software suite of tools for programming Tofino. The startup also built a programming language, P4 — Programming Protocol-Independent Packet Processors – to allow developers to differentiate their networks and solutions.

In November, Chinese web goliaths Alibaba and Tencent led a $23 million funding round for Barefoot. Since it emerged from stealth in June, the company has raised more than $150 million, backed by venerable and respected companies like Hewlett Packard Enterprise, Google and Goldman Sachs.

………………………………………………………………………………………………………………………………………………………………..

Viptela is a four year old startup that specializes in network virtualization and SD-WAN.  90% of Viptela’s customers are hosted on Amazon Web Services. The others are giant enterprises that use its services in their own data centers.  The company recently named Praveen Akkiraju as CEO. More details at: http://www.bizjournals.com/sanjose/news/2017/01/12/cisco-veteran-takes-reins-at-san-jose-competitor.html

…………………………………………………………………………………………………………………………………………………………………

Conclusion:

The startups boast impressive leadership and funding, but we believe very few, if any, will actually survive and gain critical market mass to challenge incumbent network equipment companies left, e.g. Nokia, Ericsson, Huawei, Cisco, ZTE, Ciena, etc.