A Bloomberg report today said Cisco Systems and Juniper Networks are facing significant challenges since social media network Facebook will be using its own networking equipment.
Facebook, which has 1.4 billion users on its social networking site, can displace networking products from companies like Cisco Systems and Juniper Networks with flexible hardware at the heart of large data centers.
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The system, nicknamed 6-pack, will allow Facebook to build networks by filling large racks with a smaller switch called Wedge, introduced in June. The US-based Facebook aims at reducing IT spending on infrastructure and upgrade its capabilities without depending on outside suppliers.
The 6-pack is built to replace high-capacity spine switches that handle the bulk of traffic in data centers. “Though it was originally marketed as a cheaper, top-of-rack switch, Wedge was designed to become a building block for systems to replace more expensive kinds of gear,” said Najam Ahmad, Facebook’s vice president of infrastructure.
The size of the spine switch market was about $2.9 billion in 2014 against $3.1 billion top-of-rack switch market, according to Infonetics Research, a unit of IHS.
The 6-pack system will replace these systems while encouraging traditional network-equipment makers to change their designs.
Cisco said 30 percent of revenue came from its switch product lines in the quarter that ended in January.
A Facebook group called the Open Compute Project encourages to companies design lower-cost systems. Other Open Compute members include Microsoft, Cisco and IBM.
Kelly Kramer, Cisco’s chief financial officer, downplayed the risk to Cisco, and pointed to strong sales of its Nexus family of switches in its most recent quarter.