I’ve blogged a few times this year about the difference between merchant and custom silicon and had several discussions on Packet Pushers about the value of merchant silicon.

But how much merchant silicon is there TODAY. Check out this graphic from Broadcom who makes the Trident network processor at the heart of all these switches :

Yep, all of the major switch vendors are using the same switch chipset from Broadcom to make switches that are basically the same. All of them. Even Cisco, home of the “we invest in R&D and continue to make our own silicon”1 has a Broadcom Trident chipset in their Cisco Nexus 3000 product (because their own silicon is high latency and high cost).

Not Server / Intel monoculture

It’s possible that we might end up with a single dominant silicon vendor for networking in the same way that Intel x86 CPUs in the server market. At first, you might think this isn’t a bad thing. But if you are DELL, or HP, or IBM you might wish that you could build a product that offered better features than Intel can make. When your only option is to glue Intel chips to a board it’s hard to deliver new features that could give you an advantage over a whitebox vendor from East China/Taiwan (like Facebook does).

And Intel has been dominating that market by moving into the support chipsets too. Once, vendors would choose north bridge and south bridge chipsets that connected the CPU to memory, graphics, USB, keyboard peripherals, but today all chipsets come from Intel. Every motherboard is basically the same. That’s a big reason why we have blade servers – server vendors are desperate to make products that are actually different from each other.

Customers like the “idea” of a fast car, but most people by the family sedan. The

The EtherealMind View

Now the vendors have shown a lack of business capability to make their own silicon, their products will lack differentiation in the hardware, so we will have a LOT of marketing about software. Be ready for it.

Cisco is still attempting to develop their silicon, and might turn this into a competitive advantage (as it has done for the last ten years). On the other hand, Cisco is years late on delivering their latest product lines based on new silicon to market. This suggests that there are internal problems at Cisco in maintaining product development and profitable investments. Once upon a time, Cisco got everything right in their products and design, but recently Cisco has failed at so many products that it’s hard to be confident that they still have their mojo.

What’s interesting is that software driven networking is likely to be big this year in repsonse to the virtualisation dynamic. Whether the system is OpenFlow/SDN or NETCONF/XML or some other software platform isn’t yet clear. But I bet the network operations will look very different by the end of 2012 – and one reason will be that most vendors will have the same network hardware.

Never thought in 2002 that I would say that in 2012.