Here's another sign that Cisco is in danger from a new technology called software-defined networking (SDN).
Today hot SDN startup Big Switch Networks announced that it snatched a key engineer away from Cisco: Prashant Gandhi.
Gandhi was helping Cisco figure out how it will compete with SDN and helping Cisco generally build more software-based networking products.
He had worked on Cisco's software switch, called the Nexus 1000V virtual switch. More importantly, he was leading a project called the Cisco ONE Controller, which is Cisco's attempt to create its own SDN.
It's not surprising that Gandhi would leave Cisco for a startup. He did it once before, leaving Cisco to found security startup Rohati Systems, which he then sold to Cisco in 2009. Cisco does that a lot. It often acquires startups from ex-employees if they leave on good terms.
But this time, Gandhi is going to a startup that's a real threat.
Big Switch is working on a form of SDN tech called OpenFlow that is a completely new way to build corporate networks. Instead of buying expensive hardware routers and switches with a lot of fancy features from Cisco, companies can use OpenFlow software to do those fancy features. They can then buy simpler, cheaper hardware, and less of it.
Cisco hopes to combat the SDN threat by adding a layer of software on top of its network equipment. That's the ONE Controller project that Gandhi was working on.
SDN is such a dramatically better way to design networks that established network industry players have been buying SDN startups for big bucks as soon as they show their tech is viable:
VMware bought Nicira for $1.26 billion last year. Juniper bought Contrail Systems for $176 million two days after it came out of stealth. F5 Networks bought LineRate Systems for an estimated $50-$100 million just 10 months after it released its product.
Cisco has not yet acquired an SDN startup, but has funded super secret spin-in Insieme, which is said to be working on SDN tech, too.
It's surprising that Big Switch hasn't been acquired yet by one of Cisco's competitors, like Hewlett Packard.
Cofounder Kyle Forster was formerly a rising star at Cisco. Big Switch also has close ties to another ex-Cisco star and current Index Ventures VC, Mike Volpi. And now it has an engineering with intimate knowledge about Cisco's SDN plans.
Big Switch is well funded. It's raised $45 million from venture funds, including a $6.5 million investment by Intel Capital this year.
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