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October 23, 2008

Sun Founder Bolts for Cloud Start-Up

Nobody knows yet what impact the liquidity crunch or possible recession will have on communications segment contestants. But at least one of the possibilities is a period lasting perhaps a year or two where general demand remains muted and capital to fund growth is harder to get. We might be in for one of those periods of "de-leveraging" where debt avoidance underlies the business.
 
If that is the case, many smaller firms simply will crash and burn for lack of access to new capital. There are other possibilities as well, less dire, but also less likely. Still, one prediction is easy to make: despite all the trauma, we will emerge from the other side of any potential "cleansing" period with at least a few new industry leaders whose existence or leadership was not obvious before.
 
Noting that "cloud computing," or "network-based" application access, seems--despite the hype--to be a looming trend, one has to note that Andy Bechtolsheim, one of the four founders of Sun Microsystems (News - Alert) and the chief architect of the company's hardware systems for the better part of a generation, has left the company to join Arista Networks, a startup in the cloud computing space.
 
Bechtolsheim will become chairman and chief development officer of the Menlo Park, California-based startup, which has about 50 employees. Arista Networks also has gotten former Cisco (News - Alert) Systems Vice President, Jayshree Ullal, a 25-year industry veteran, as its new president and chief executive.
 
Arista Networks has developed a platform for cloud computing that uses high-performance 10-gigabit Ethernet and cutting-edge networking technology for large data center and computing environments. The company claims its switches are priced at one tenth the cost of those made by its leading competitor, Cisco Systems (News - Alert).
 
Why one-tenth? Most venture capitalists say a key criteria for any proposed technology solution they might fund is that it provides a "10x" improvement over what is available commercially, at the moment.
 
So it is no surprise that "10x" better is the price claim.
 
Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users. Today’s featured white paper is Fixed Service Strategies for Mobile Network Operators, brought to you by Comverse (News - Alert).
 

Gary Kim is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Michelle Robart
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