Vendors can upgrade products in the field, but that doesn't change the architectural DNA. Only products that are built with low TCO in mind will deliver the overall savings desired, and adopting technologies based on specialized, off the shelf silicon -- so-called merchant silicon -- is the first step along the path to realizing those returns.
In the 1990s enterprise network technology was evolving rapidly. To cope, many vendors delivered hardware-based innovation using custom ASICs. Merchant silicon wasn't available to deliver many key features.
ASICs are a natural fit in early-stage markets where standards are incomplete or non-existent, and where multiple approaches are battling for supremacy. The technology boom of the late 1990s was the golden age of ASICs. Many start-ups invested heavily in custom chip development, especially to build high-speed switch fabrics. New start-ups with negligible revenues could be sold for hundreds of millions of dollars if the acquiring company believed it was gaining access to leading-edge silicon designs.
The collapse of the tech bubble led to a significant decline in ASIC developments, but also saw the enterprise network market mature and merchant silicon grow tremendously in scale and sophistication. Today there is a rich variety of silicon sold commercially. For every major design need there are almost certain to be a number of sophisticated merchant chips available from different vendors.
Enterprise customers expect interoperable, standards-based, cost-effective network infrastructure solutions with value-add in software and system design. Merchant silicon provides this platform, the opposite of what proprietary chipsets deliver. Furthermore, merchant silicon enables vendors to deliver quality, low-cost, feature-rich products more quickly than ASIC updates can be delivered.
Because merchant silicon vendors jockey with each other for manufacturing market share, there is intense competition to produce chips that offer the highest performance and functionality, the lowest latency, the highest density and the best cost-performance available. Merchant silicon is a key design choice with benefits for both manufacturers and their customers.
Because ASIC clients are locked in to their proprietary hardware-based network components and they face little outside market pressure, these manufacturers have less incentive to innovate or refresh product lines.Highly specialized ASICs also carry high development costs -- special design teams and tools, custom chip development and redesign risk, among others -- that a single company must bear and pass on to its customers. While it's true that merchant silicon manufacturers also share a majority of these expenses, the per-unit cost of R&D and design is lower because the manufacturers produce larger quantities. This also equates to larger overall R&D commitments.
Customers benefit from the economy of scale, lower price point to entry, lower field-failure rates and the freshest, best-of-breed technologies available. With the merchant silicon market growing larger and more competitive, a flexible merchant solution can offer all the advantages of ASICs at lower development costs.
Additionally, merchant silicon is part of an open ecosystem that includes not just commercially available chips but also low-level software components. Product vendors that take advantage of merchant silicon can also achieve savings through use of common drivers and software utilities -- savings that can be passed on to customers directly or in the form of greater innovation.
Merchant silicon also equates with a standards-based approach. Here's why:
* Merchant silicon developers aim to serve the largest possible market and therefore have incentive to ensure their chips provide a fully standards-based solution; building in proprietary features would only reduce potential market adoption. ASIC developers follow the opposite tack: with non-standard, proprietary features, they lock their customers into a closed system and keep a stranglehold on their acquired market segment.
* Merchant silicon developers typically work closely with standards groups to ensure their chips support -- and evolve to continue to support -- every facet of a standard to ensure the broadest applicability and longest life. A single product vendor's ASIC, by contrast, may focus only on select aspects of a standard. Furthermore, it is less likely that a product vendor will undertake an expensive redesign simply to improve adherence to an evolving standard.
* Standards-based chips mean fewer protocols to manage and decrease the risk of a chip not operating properly. And common programming interfaces enable equipment designers to use their software through successive generations of equipment, providing a longer-living asset than a single generation, in-house chip design, which further reduces TCO.
The open ecosystem around merchant silicon also accelerates time-to-market for both new products and feature upgrades to existing products. Product vendors using merchant silicon can leverage the work of specialty silicon and software developers and focus their own engineering on system-level innovation.
ASIC development teams also implement programming interfaces, but there's no guarantee that these match any common industry standards. It's less likely that open building blocks of low-level software will work with ASICs; there typically will need to be at least some software modification to work with custom chips. All of this tends to lengthen development cycles and adds expenses that will be passed on to customers.
Merchant silicon developments usually begin early, as standards are maturing (standards bodies try to finalize details that impact silicon development months ahead of the full standard, to ensure merchant chips are ready). Product vendors can begin designing in merchant silicon months before the chips are ready, based on advance information from the developers. While ASIC developers could take the same approach, it's more common for ASIC development to start later and for products using ASICs to be built serially, further lengthening the time to market.
Since ASIC developments are expensive, companies that build custom chips will work to get the maximum life from them. This can lead to slow refresh times: If companies can eke additional years out of their initial ASIC investment, it makes better business sense to do so even when the platform is falling behind the market.
As the old adage goes, there's a time and a place for everything. ASICs may be a good choice for new and specialized markets, but in the large and mature enterprise network infrastructure market, merchant silicon is the clear winner.
Wilde is senior director of Global Product Line Management at 3Com.