Slashdot Mirror
Google, Amazon, Microsoft Go East For Network Gear
theodp writes "Wired's Cade Metz has the scoop on the move away from U.S. network equipment stalwarts, calling it of the best-kept secrets in Silicon Valley. 'Cloud computing is an arms race,' writes Metz. 'The biggest web companies on earth are competing to see who can deliver their services to the most people in the shortest amount of time at the lowest cost. And the cheapest arms come straight from Asia.' Or, as Joyent's Howard Wu puts it, 'It's kind of like buying couches. If you buy one, you go to a retail store. If you buy 10,000 couches, you go straight to the factory.'"
Wow.. really? Huge multinational companies are buying equipment from developing countries because it's cheaper?! What is the world coming to?
I quickly read the Wired article hoping to find a joke but didn't find the punchline...
Dan
Not Eastern, just China. They've been known to do it, and they'll do it again. You think Australia refused to let Huawei bid because they found the company's logo unpleasant?
No, it is not possible to inspect hardware at that level sufficiently thoroughly and it is certain that the entities will be coerced into doing exactly what you wrote.
This threat is not theoretical. The details are classified but what's been leaked is pretty indicative, if you know government bureaucracy, that things have happened for real. Actual chip-gate-level "flaws" and backdoors of very high sophistication have been inserted into the physical manufacturing chain.
All true.
But what makes people think the USA is any different in this sense? The "good ol' US of A" is also known for demanding backdoors everywhere... Or are you saying that bad things are only bad when it's not you doing them?
(Captcha: "benign")
It isn't exactly a huge secret that the network guys(as with the PC guys and others) do a lot of leaning on their OEMs and ODMs, especially for their less specialized lower margin gear. That being the case, it isn't obvious why a major buyer would pay Cisco or somebody just to order the hardware from the subcontractor, slap a sticker on it, and get somebody to churn out an English-language manual.
This would be news if the existing 'manufacturers' hadn't already done much of the work of hollowing them selves out into the marketing and branding arms of the contractors who make the hardware. That VAR stuff is exactly what a large-scale customer wouldn't care much about.
Buy Huawei? How does that work exactly?
1) Foreign companies cannot own more than 49% of a Chinese company. All of those American companies in China? They own 49% of those facilities.. a Chinese 'partner' is required to operate in China.
2) Huawei is a government controlled corporation.
3) Huawei had 28 billion USD in revenue in 2010. Which means (by revenue) it is larger than Facebook, Google, and Amazon. It is 2/3rd the size of Cisco (and has 2x the number of employees). It is 40% the size of Microsoft.
No foreign company is buying Huawei anytime soon.
Then you're doing it wrong. Cloud is not about who can stuff the most servers in the most racks in the biggest building. That's what everyone is ALREADY doing. Cloud is about the SERVICE - which can in many cases be hosted on big iron.
Meanwhile, we can be sure Azure or whatever it is will come with a nice OOB "management" feature accessible only to certain key groups in China.
I want to delete my account but Slashdot doesn't allow it.
Anyways why does everyone paint eastern governments as entirely evil.
Because like all large governments they are self-serving and to outsiders that makes them effectively evil. Go look at what the US did during the Cold War. Same thing, except this time the US is on the receiving end. Actually, look at ACTA for a current example of how much the US fucks with other countries for it's own perceived gain.
The difference is that China has no desire to hide such actions too much and as such is able to take them to whole new levels. They want their economy and their companies to succeed and they will do anything to achieve that goal.
Does that makes them evil? If you say yes, consider this. They have over 1 billion people and an economy that is not self sustaining yet. Hundreds of millions of those people live in atrociousness conditions right now. Worst case, China fails to build itself into a proper first world economy. Then hundreds of millions will die and hundreds of millions more would probably have been better off if they had died.
If you think every American not being able to buy three Starbucks Latte's a day more of a sin than having hundreds of kids starve to death, maybe you should look long and hard in the mirror before deciding what is evil and what is not.
Too bad you did not have the first post advantage.
Joyent is being quoted in an article on big cloud players?
I thought they were a niche, expensive virtual/dedicated server provider -- the Starbucks of cloud with the unique selling point being hip graphics/cartoons, all of whom you could imagine going to Starbucks.
(Oops, I just checked, and they moved away from their cool, "CEO is a she" cartoon graphics.)
I'm not a lawyer, but I play one on the Internet. Blog
Or, as Joyent's Howard Wu puts it, 'It's kind of like buying couches. If you buy one, you go to a retail store. If you buy 10,000 couches, you go straight to the factory
Of course what Mr. Wu leaves out is that they are going straight to a factory in Asia instead of the American manufacturers (stalwarts, I beleive the summary called them).
Googe, Amazon, Microsoft are all mega-companies and strive to maximize their profits. However, at record unemployment levels in the tech industry, they claim they can't find US workers and have to bring in foreign workers. Now, it appears that US equipment manufactures can't produce enough equipment and they have to again go offshore.
Again, they can do business wherever they want, but the time has come to for them and their shareholders to either decide they want to be an American company with a world wide presence or a foreign company with a US operation.
In Australia's instance, it's more likely because Washington told them to refuse than any home-grown reason.
"I've got more toys than Teruhisa Kitahara."
I meant; buy Huawei equipment, not the company itself.
The US is absolutely doing the same things. But if I have to have a backdoor in national infrastructure, I'd rather it be placed there by our government than someone else's. Just like I'm not thrilled with the armed VIPR squads hanging out around subways and bus stations (could they have picked a more sinister name?), but I'd be even more upset if there Chinese soldiers stationed there.
There is no evidence of that.
"No" is a strong word. Huawei was founded in 1988 by Ren Zhengfei (he's still the CEO of the company). Right out of University, he joined the People's Liberation Army (PLA) working on military technology. He joined the Communist Part of China in 1978, and retired from the PLA in 1982. He was an elected member of the 12th National Congress of the Communist Party of China (1980's).
Sun Yafang, the chairman of the board, worked at the Ministry of State Security (MSS) Communications Department before joining Huawei.
In China, companies are not directly owned by the government, but they are controlled by Communist Party members... When people say X is a Chinese government subsidiary, this is what they are referring to (the close ties of the company to the Communist Party).
Newsflash! The world is round. Asia is to the West of the continental USA
Huawei had 28 billion USD in revenue in 2010. Which means (by revenue) it is larger than Facebook, Google, and Amazon
s/revenue/profit/. Google and Amazon both had revenues well in excess of $28B in 2010, but Huawei's 2010 profits were $28B, on $185B in revenues.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
No.. you obviously skipped the conversion from yuan to USD.
http://www.businessweek.com/news/2011-04-17/huawei-2010-profit-gains-30-on-higher-international-sales.html
Although, you are right about Google and Amazon: Google $1B in sales more than Huawei in 2010, and Amazon had $6 billion more than Huawei.
Well then it makes a lot of sense to standardize on cheap, largely the same hardware. As the article points out:
The switches Google was building typically sat at the top of a rack of servers in the data center, connecting the servers to the rest of the network. As Juniper points out, this is only part of the networking hardware used in the data, but it’s a large part.
So the low level, short haul connections use cheap switches. Makes perfect sense. I'm sure they still need the Ciscos and Junipers to interconnect far-flung data centers and to Tier 1 providers like Level 3 and especially the telcos.
People buy Cisco for 2 reasons: the 4 hour service guarantee and because you can interface just about anything to anything else with them. Two things you don't need in a highly redundant monolithic data center.
"Well, good luck finding a judge that doesn't run a bestiality site."
1) Americans want freedom, liberty
2) Americans adopt capitalism as epitome of freedom and liberty
3) Capitalsm leads to stock markets
4) Stock markets lead to shareholders
5) Shareholders have profit motive
6) Profit motive leads to public companies to maximize margins
7) to maximize margins, you lower costs
8) the east delivers lower cost
9) jobs go overseas
10) Americans bitch about employment flight
Lesson: you did it to yourself by equating capitalism with freedom and liberty
Thanks, for telling me exactly how Cisco and Juniper aren't scaling to meet the needs of Google. By "scaling", and without further details, I assume they mean "selling cheaply enough".
I always wondered why USB connecting my mobile phone to my laptop wpuld well and truly mess up the wi-fi connection for 24 hours. Even rebooting wouldn't fix the problem. Hint: the mobile phone would appear to the PC as a file system with auto-run. The most annoying thing was that on a Windows PC, the auto-run would reroute the network settings through the mobile phone network.
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
Just take a look at their patents - very few of them are for hardware. Also consider the move to the v15 IOS Universal images.
Cisco have known for a long time that hardware suffer from Moore's Law (loses it's margin quickly) and is easily replicated via ODMs. Lifted software features are a lot easier to litigate against.
"We know what happens to people who stay in the middle of the road. They get run over." - Aneurin Bevan
If that is the standard you measure to, then certainly many American companies are 'state controlled companies' too?
ex-politicians being in high positions is... pretty bloody common.
The real news for me here, was that they were using US network equipment, instead of cheaper equipment from elsewhere. I'm honestly surprised!
What seems to be missed in most of these discussions is that this network gear that the companies are buying are coming without software. One of the ODMs selling the gear appears to be moving to providing some software that can be put together to provide the necessary OS to do the networking but it sounds like it's still an effort to get it working.
If you're google, amazon, microsoft, etc., it's probably not too much of a problem to get a group of developers together to put together and maintain an OS to run the hardware but I don't really see many other companies deciding that they're going to put together a OS development group to save a few thousand dollars per router.
"When you sit with a nice girl for two hours, it seems like two minutes. When you sit on a hot stove for two minutes, it
No.. you obviously skipped the conversion from yuan to USD.
Ah, so I did. Thanks for the correction. I was really floored that Huawei had revenues far in excess of IBM.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
look to be honest I have seen the "lawyers" and to be honest I would not let anyone from Huawei bid on my contracts either and thats nothing to do with china but to do with quality
the fact that your going to be passing defence department data over those links and you think for one moment someone won't tap that data ?
your very deluded, what you can do is make it harder and one of the first places to look is at the network layer and how to secure that
for example a known problem from years back...
most phone calls from the greek prime minster where intercepted on the network level at a Vodafone switch and guess who supplies Vodafone ?
Huawei
thats enough for me to exclude them let alone all the other problems...
the funny thing is that Huawei have been trying to buy influence by paying old politicians in australia....
have fun
John Jones
If that is the standard you measure to, then certainly many American companies are 'state controlled companies' too?
ex-politicians being in high positions is... pretty bloody common.
No, the state is a subsidiary of many American companies
If you think every American not being able to buy three Starbucks Latte's a day more of a sin than having hundreds of kids starve to death, maybe you should look long and hard in the mirror before deciding what is evil and what is not.
Before we go any further, are you seriously going to pull a "think of the children" argument on /.? What does the above quoted text mean exactly? Are you saying we should do all we can to save China's population from itself by buying as many Chinese goods we can while sacrificing our standard of living?
I don't think I am evil when I say I will not keep me up at night if millions starve in China, they bought it upon themselves. If you outpace your ability to sustain a civilization then you fucked up, its not the fault of someone in another country who wanted cheaper goods and 3 lattes, they didn't make the rules. China is trying to become a successful global economy via short-cuts and cheating. Nations like Germany, Japan and the USA spent a century or two and a few major wars getting where they are. If China's economy turns out to be a house of cards and it collapses then too bad, they tried to cheat the system and lost.
If millions starve it will be sad, but its not going to keep me up at night thinking about how I could have bought more iPads and computers from Chinese manufactures so they could feed their families.
Thanks Google, Amazon and Microsoft for depriving more Americans of jobs. Maybe the next time I buy a technology product I will return the favor. Why should I put money in your pocket when you aren't willing to do the same for people like me.
So starting provoked wars, invading nations, murdering and torturing tens of millions of people is the right (tm) way to be a first world nation but what China is doing isn't?
Glad I'm not your psychiatrist.
My experience is that while large companies will use Asian companies for some portion of their network, it's never any of the important parts. Let's break this article down a bit.
"Rivers says. “With the traditional enterprise networking vendors, they just couldn’t get there. The cost was too high, and the systems were too closed to be manageable on a network of that size.”"
Note that the first and only real point is 'cost'. The rest is bullshit.
"The Ciscos and the Force10s build their gear with many of those same manufacturers. Google removed the middlemen." ...goes very well with the spin term "“original design manufacturers,” or ODMs". More bullshit.
"Now, the other giants of the web are running into the same issues, and they too are going straight to Asia for hardware."
Presumably the real issue being cost of course. The western manufacturers of course have addressed every other issue that comes up as these are (were?) their biggest customers.
"As J.R. Rivers serves this market with Cumulus Networks, James Liao is doing much the same thing with a second startup called Pica8, offering networking gear that comes straight from the ODMs."
In other words these guys are trying to sell the Asian kit in the west and are trying to show that it's not crap because the biggest companies are using it. There may be a reason that this is "...one of the best-kept secrets in Silicon Valley." it may be mostly bullshit.
"Martin Casado — the chief technology officier of a third Silicon Valley networking startup, Nicira — confirms that the hardware market is shifting to Asia."
Gee..yet another interested party saying that everyone is shifting.
I stopped reading because the rest is about these startup guys that kicked off the article.
blindly antisocialist = antisocial
Never said that it was the right way, you just made that assumption and put words in my mouth.
Its the history of the world, shit happened and we moved on. We had to endure those hardships but with them they bought about a lot of technical advancements and massively stimulated industry. WW2 alone stimulated the growth of aviation, space travel, computers, communications and medicine. It was a terrible time in history but it was part of western technical and industrial growth. And before WW2, WW1 and earlier wars played part in the growth of the west. I don't think it was the right way, war sucks but it happened and it bought about a lot of change. and WW2 was just a small period in the history of the industrialized world, there were many other innovations that came about without needing war to stimulate its growth.
Like it or not what China is doing to its currency exchange rate, lax environmental laws, lax labor laws and sheer numbers willing to work for peanuts is almost a war. Not a hot war but an economic one.
I don't think I am evil when I say I will not keep me up at night if millions starve in China, they bought it upon themselves. If you outpace your ability to sustain a civilization then you fucked up, its not the fault of someone in another country who wanted cheaper goods and 3 lattes, they didn't make the rules. China is trying to become a successful global economy via short-cuts and cheating. Nations like Germany, Japan and the USA spent a century or two and a few major wars getting where they are. If China's economy turns out to be a house of cards and it collapses then too bad, they tried to cheat the system and lost.
Are you kidding me?
The western worlds route to a successful economy: About 400 years ago your ancestors (I'm assuming) migrated to a new fertile continent with lots of resources and killed almost all of the many millions of people living there- they then went to another continent and took slaves from there and built their economy. Next, with their new found wealth they went around the world "colonizing" countries and taking their GDP back to Europe.
Should China employ the same route to a successful economy?
It is quite probable that the only reason that the Americas were not colonized by either China or India before the Europeans was due to the Confucian bureaucracy who in around 1500 made it a capital offense to build a seagoing junk with more than two masts (a similar rule was imposed by the Brahmins in India). At the time China had more advanced ships and ocean going skill than the Europeans and the standard of living in India and China was higher than in pre-columbian Europe.
So really, you are just a lucky little result of history. With some very small changes in the past you could just be some peasant boy living in a dirty overcrowded Europe hoping for a Job at Foxconn London. Hope that thought doesn't keep you up at night either.