Information security technology is undergoing a generational shift. Once thought of as a collection of point solutions, security technology is moving to the cloud, where a coordinated suite of real-time software tools are needed. It has also risen in importance to the CEO's office, where putting together a wide-ranging, cloud-based information technology (IT) security management strategy has become one of the most important business priorities. 

These trends are going to fuel increased investment and focus on the security of corporate networks and data over the next five years. This is the conclusion of our most recent report, "Next-Generation Cloud Security," which explains how a wide variety of new software and cloud-based technologies will be employed to protect corporate networks in real time -- and who the leading suppliers are. 

This entry was posted on Monday, August 10, 2015 at 14:48 pm and is filed under Infrastructure & SDN, Applications, Investing.
Keywords: Security, IT Security, Cloud Security, Network Security, Firewalls, ATP

Cloud security company Zscaler Inc. is the latest to join the "Unicorn" club -- private venture-backed companies with valuations of $1 billion or better -- with a $100 million raise this week

Cloud security is probably the hottest sector in private technology right now. More than $700 million has been pumped into the sector in the last few years, according to our newly released research report, "Next-Generation Cloud Security." Zscaler is among the 23 private and public companies included in the report. 

The funding round was led by TPG and included current investors EMC Corp. and Lightspeed Venture Partners. The company has raised a total of $138 million.

This entry was posted on Wednesday, August 05, 2015 at 15:37 pm and is filed under Infrastructure & SDN, Investing.
Keywords: Zscaler, Cloud Security, FireEye, Unicorn, Jay Chaudhry

In March, The Rayno Report told you about an exciting new market developing for service-provider software called Lifecycle Service Orchestration (LSO). We projected the total opportunity for LSO technologies in enterprise service offerings will approach $2.75 billion by 2019, according to our March report, "LSO Overview and Market Forecast."

It now appears that these estimates may be conservative, based on feedback I got from service providers at last week's MEF annual meeting, in Vancouver, B.C. In "LSO Overview and Market Forecast," survey results from more than 60 leading service providers indicated the main driver behind deploying open LSO software is the need to more quickly provision and deploy new communications services. The global operators are looking to move to a more cloud-like model, and LSO helps them do that. It now appears to me that the level of urgency is increasing.

LSO will help service providers build another open, software layer for orchestrating and provisioning new services. LSO integrates service orchestration, fulfillment, control, performance, assurance, usage, analytics, security, and policy of communications and networking functions. Best of all, its based on open and interoperable standards, not proprietary operations support systems (OSSs), as was common in the telecom industry in the past. 

This entry was posted on Monday, August 03, 2015 at 14:25 pm and is filed under Infrastructure & SDN, Investing.
Keywords: LSO, Orchestration, SDN, NFV, MEF

Supporting a family of five, I continue to suffer from mobile-phone sticker shock. The cost of supplying my family with devices, data plans, and services is climbing close to the monthly payment for a Porsche. I don't think I'm alone.

As I hand over more of my hard-earned cash to mobile operators, I wonder if this is a sign that the profitability of mobile operators has peaked. I came to this realization this weekend when we went to the local mobile operator store to acquire a new smartphone for my daughter.

We have established a tradition in our family, which is that you get your first smartphone when you turn 13, as long as certain grade and work requirements are met. Our younger daughter recently turned 13. Getting her a smartphone was a bittersweet moment. I was happy that my daughter was excited about the phone. She's worked hard to meet all the conditions for this technology privilege.

But there's also the downside: time and cost. My daughter will now spend more time on Instagram and games. It's a constant battle to manage electronics use among children. Then there's the cost. Another smartphone will add another $10 a month (at least) to a bill that already exceeds $240 a month for a family of five. That's twice as much as our cable bill and the same price as the payments on a new car. 

This entry was posted on Wednesday, July 29, 2015 at 22:23 pm and is filed under .
Keywords: Mobile, Mobile Data, Verizon, Smartphones

The Rayno Report held another one of our social events on CrowdChat, LinkedIn, and Twitter on July 27. The topic was #NFV, or Network Functions Virtualization. The event covered the emergence of NFV, which will make it easier for service providers and cloud providers to deploy new communications and network services by deploying software on industry-standard hardware. 

NFV is attractive because it can lower the capital expenditures (capex) and operating expenditures (opex) of service providers looking to deploy new services. Instead of building purpose-built infrastructure, as has been the practice for years, they can deploy commodity servers and swap services in and out via software only. This means that just about any service requiring a specialized hardware appliance could be moved into the cloud as a software service.

This entry was posted on Tuesday, July 21, 2015 at 14:27 pm and is filed under Infrastructure & SDN.
Keywords: NFV, Cyan, CenturyLink

Plexxi Inc., a Nashua, N.H.-based startup that is building a Software Defined Networking (SDN) optical switch, is back in the spotlight with the release of a new product, the Plexxi Switch 2. With the Switch 2, it's doubling down on its unique optical architecture for connecting data centers.

The Switch 2 is fun because it stirs up many of the existential questions about SDN, data centers, and whether a plucky startup can take down a giant networking company like Cisco (Nasdaq: CSCO) or Arista (Nasdaq: ANET). Such questions include: Can an optical switch also be SDN? Can you skip "leaf-and-spine" architectures? Should SDN controllers be open or proprietary? ...and many more fun puzzles for networking geeks.

This entry was posted on Wednesday, July 15, 2015 at 14:35 pm and is filed under Infrastructure & SDN.
Keywords: Plexxi, Arista, Cisco, Leaf and Spine, Optical, Data Center, Cloud

Last week Cisco (Nasdaq: CSCO) announced it is buying OpenDNS for the healthy price tag of $625 million. It's nice if you can get it. The deal shows Cisco realizes the urgency of being positioned in security and, especially, having a cloud security solution. 

Cisco was already an investor in OpenDNS, which protects against malware, botnets, and phishing at the Domain Name Server (DNS) layer of the Web. Combined with Cisco's purchase of SourceFire in 2013 for $2.7 billion and you have a $3.5 billion investment in emerging security technology. In the last year, Cisco has also purchased malware analysis business ThreatGRID and security advisory firm Neohapsis. 

Industry sources said they were surprised by the size of the deal. OpenDNS is believed to have revenues in the $100 million range, giving it a valuation more than 6 times revenues. It's clear that security startups around the world are celebrating their healthy bump in value after this deal. 

So the big question: What does this mean for Cisco's security strategy, and where is it going? Security is a huge opportunity for new CEO Chuck Robbins, and this is his first big deal. Will security be Cisco's big focus? 

This entry was posted on Thursday, July 09, 2015 at 14:20 pm and is filed under Infrastructure & SDN, Applications.
Keywords: Cisco, Security, OpenDNS, Chuck Robbins

Amazon and Microsoft's Azure are the clear leaders in offering cloud services to enterprises, according to the results of a customer survey released by investment bank Cowen and Company. 

Amazon's AWS was the overall leader among various criteria for cloud services, including highest share of budget (27%), while Azure was close behind (23%), according to the Cowen survey, which targeted 200 cloud customers. Azure had a slight edge in usage, with 45% of the respondents using the services vs. 44% for AWS.

The Cowen analyst team concluded the results are positive for Amazon (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT), Red Hat (NYSE: RHT), VMware (NYSE: VMW), and Rackspace (NYSE: RAX), but negative for IBM (NYSE: IBM). For Google (Nasdaq: GOOG), it sees the results as mixed. Rackspace stood out as well positioned to gain spending in a variety of areas. 

This entry was posted on Tuesday, July 07, 2015 at 14:01 pm and is filed under .
Keywords: Cloud Services, Security, Amazon, Microsoft, Azure, AWS, Rackspace

Software-Defined Networking (SDN) startup Pica8 has won a deal to supply white-box switches to build the network fabric at the TouIX Internet exchange, based in Toulouse, France. The Pica8 white boxes will replace Cisco equipment in the deal, according to a TouIX technology expert.

It's a small deal, but it may be indicative of SDN's appeal to Internet exchanges. Marc Bruyere, researcher at LAAS CNRS and one of the technology developers for TouIX, said Pica8's Open Flow-based switches provided better performance, cleaner management, and the capability to enable Web-based provisioning for customers. 

"We really are vendor agnostic, that's what we wanted," said Bruyere in an interview with The Rayno Report. "Now we can buy from Pica8, Quanta, and other [white-box vendors] in the future."

This entry was posted on Tuesday, June 30, 2015 at 16:51 pm and is filed under Infrastructure & SDN, Investing.
Keywords: White Boxes, Cisco, Pica8, TouIX, Interent

Arista Networks (NYSE: ANET) founder and CEO Jayshree Ullal has been selling Arista shares at a ferocious pace over the last six months, dumping about $60 million worth of stock, or 7% of her entire position in the company, since the beginning of the year. 

The sales have come during a powerful rally in the stock over the last two months. Arista was trading above $80 recently, after bottoming out around $60 in February. Shares slumped last fall and winter after Arista's chief rival, Cisco Systems, announced it was suing Arista for intellectual property theft. Ullal is a fomer Cisco executive who left the networking giant to start Arista.

The lawsuit, a rare one for Cisco, weighed on Arista shares for several months before investors started to shrug it off. Many Wall Street analysts have built in several millions of dollars in quarterly legals costs and an eventual settlement on the lawsuit, which might be in the triple-digit millions, in light of simliar technology lawsuits. A settlement in the hundreds of millions would have a signficant earnings impact on Arista but would not put it out of business. The company holds $500 million in cash and is profitable. 

This entry was posted on Wednesday, June 17, 2015 at 21:03 pm and is filed under .
Keywords: Arista Networks, Jayshree Ullal, Cisco Systems, Stocks
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