As any of you who follow my Twitter updates (@annejohn) will know, there are regular posts marked 'Infrastructure'. Fundamentaly, Twitter, Facebook, Google, Amazon, Apple and hundreds of businesses like those would not have anything like the reach and market that they do without the existence of the public Internet. The Internet exists as a collaboration between national and international Service Providers, purchasing core IP routers from Cisco and Juniper. The 'cloud', consolidating very large groups of servers into a small number of locations (data centers) where they are connected with access switches and more routers, has grown in effectiveness enormously in the last few years, driven particularly by Google and Amazon.
When commercial enterprises were building their own private data centers, they could, and did, seek out 'best of breed' suppliers of switches, routers, storage, and servers. Accordingly a diverse set of infrastructure companies emerged to serve that need. At this point in the cycle, software and applications developers don't need to create and provision their own data centers. They can buy access to computing power at Amazon or Rackspace, for example, at whatever granularity in time, CPU capacity, memory, operating system mix, and bandwidth suits their business model.
Correlated with this (it's not clear that it's a consequence) there is a phase of consolidation going on in the suppliers of hardware which go into big data centers.
Yesterday Intel announced it is to acquire Fulcrum, a fabless maker of 10G Ethernet switch chips. Today Dell is buying Force 10, which makes 10GE switches.
As Andy Bechtolscheim makes clear in a rare blog post, this development makes it easier for competitors to Cisco, like Arista Networks, to buy merchant silicon switch chips without having to make the enormous investment in engineering resource which Cisco did, to build its own switch chip designs. It would be interesting to construct a productivity and profitability index, to compare Fulcrum development with the output from the business units building the Cisco Nexus, 6500, 4900, 4500, and 3900 series switches. Bro