In this insightful conversation, Don Evans of Celestica sits down with Alan Fagan to discuss how Celestica is empowering customers with flexible and powerful networking solutions. From robust storage to open-standard switching, learn about their commitment to quality, customer choice, and the importance of integrating hardware and software. Get insights into simplifying complex deployments and future-proofing network infrastructure.
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Transcript of Podcast
Alan Fagan: Hi everyone. I'm delighted to be joined today by Don Evans from Celestica. We're going to talk a bit about Celestica as a company and its relationship with EPS Global. First of all, Don, welcome to Boston.
Alan Fagan: I feel a bit funny welcoming you here, given that you grew up here. But here we are in the Seaport on a beautiful day.
Don Evans: It's good to be home.
Alan Fagan: So, Don, Celestica has a strong history in manufacturing and a compelling portfolio in storage and networking. You're part of a new business unit that was set up quite recently. Can you share the evolution of this business unit and what key market trends led to its establishment?
Don Evans: The company has been around since 1993, when we were a spin-out of IBM manufacturing. From a legacy product perspective, we've always manufactured storage and networking products. As we moved forward over the past 30 years, we realized we had a very strong OEM business, but we needed to grow our channel and our smaller-sized customer business. About a year and a half ago, we set up this Portfolio Systems Group (PSG). The mission statement is to support smaller accounts, enterprise accounts, and channel partnerships, and really get them product within a seven to ten-day period, which is what the market's demanding right now.
Alan Fagan: Okay, cool. And open networking, which is where you're really focused with this product set, is really gaining significant traction. We at EPS Global have seen that. We've been involved in this space for over a decade now, and we see the adoption accelerating. What is Celestica's philosophy and approach to open networking solutions, and what are the key benefits that you see for your customers in adopting that model?
Don Evans: The market itself is moving in that direction because, like other pieces of technology, systems and storage have become open. Networking is the next evolution. That was really driven by an open network operating system called SONiC, as you know, as well as other open network operating systems that are out there in the market. As a company, we support multiple types of open networking solutions, from SONiC to other third-party companies that make their own operating systems. We believe that we need to give the enterprise, the customer base, or even the channel a choice to pick and choose who they want to work with.
So the value proposition for us is we create a switch, we use off-the-shelf chips from Broadcom, Marvell, and we work with our Celestica SONiC, Broadcom SONiC, or with other versions of operating systems to create an opportunity for the customer to select what they want to use. It's their choice. It's an opportunity to create that choice in the market.
Alan Fagan: One of the things we hear from customers all the time is simplification. Customers want the networking piece to be simple. How does Celestica address that need for reducing complexity?
Don Evans: Again, it's choice. As an enterprise customer right now, or even channel partners, they're all very intelligent, very smart. They understand the market and what's available. So, we're creating baseline solutions that they can go off and pick and choose: an ISV (independent software vendor) partner from a network management perspective, an OS from a network operating perspective. Then, they basically pick and choose from the type of switches they want, from a 1 gig up to an 800 gig, and create their own network. We give them the opportunity to choose certified, tested solutions that work.
Alan Fagan: Yeah, we hear that advantage a lot. Because one of the things it avoids is vendor lock-in. We've seen that with traditional vendors where customers are locked into that ecosystem. So, open networking allows customers that choice.
Don Evans: And the TCO models that you can create by using open networking-based solutions are huge. It's a big number. It gives them savings and it also gives them control, which a lot of large enterprises now want back.
Alan Fagan: Right. We've seen that as the evolution of open networking has happened. It started first with the hyperscalers, and they really wanted control. They had the army of engineers to give them control. What we're seeing with SONiC and some other network operating systems is allowing that control to get into the Tier 2, Tier 3, and into the enterprise as well.
Don Evans: And again, to that point, it's all about the supply chain and the ability to deliver solutions. You've got to be able to do that. This PSG group within Celestica is set up to do that. The mission statement dictates that we get product to them within seven to ten days.
Alan Fagan: Okay. And yeah, that's something that EPS Global takes very seriously as well. We're a stocking distributor, so we enable these Tier 2 and Tier 3 guys to adopt open networking and make it easy for them.
Getting into more specifics then, Don, can you highlight some specific examples of Celestica's open networking storage products and discuss the unique value proposition they offer, compared to traditional proprietary solutions?
Don Evans: On the storage side, we create JBODs (just a bunch of discs), JBOFs (just a bunch of flash), or what we call storage controllers or storage appliances, that allow you—as EPS or as an integrator—to take a product and integrate certain types of SSDs (solid state drives), certain types of hard drives, their own choice of software, and create complete solutions for their enterprise or their customer base.
Or, from an enterprise perspective, they might have relationships with different software partners out there. They say they want to create a specific solution for a specific application they have, and the only way to do that is a customized piece. So, we create a product that allows them to take it from you as a distributor. Then you go off and meet with all the different media players and software players to create that solution, or it gives them the choice to do that on their own.
From a storage perspective, it's all about choice. It's about providing a rock-solid product that has high quality and has been tested and certified. From a switch solution, it's about looking at it from a switching perspective, in a non-proprietary nature, supplying them a baseline switch that uses Broadcom or Marvell chipsets to create a network solution with a standard off-the-shelf operating system. Then you're creating a solution with some other third-party ISV vendors. Now you have network management, you have simple, easy-to-use discovery and configuration tools that are built in, and you're able to create an environment that you can control and manage yourself as an enterprise account.
Alan Fagan: A lot of the organizations we talk with struggle with the migration path challenge. They want to modernize their networks, but they don't want to disrupt their current operations. How do Celestica's products facilitate that transition? And, particularly for customers, we're seeing more and more customers now moving from 10 or 25G environments into higher speed 100G, 400G, 800G.
Don Evans: Again, it's all about disaggregated networks or open networks, because you're able to have an off-the-shelf switch that uses standardized chipsets from Broadcom or Marvell, tested solutions from us. Then you supply the configured box to them, and then they can go off and pick and choose between a list of eight to ten different ISV partners that we have. Then you create this rounded, certified, and tested solution together.
The migration path is really easy to do because, again, the enterprise has that knowledge base of the networks; they're able to understand the different types of OSs. All this information is out there for any enterprise to understand, study, and research.
Alan Fagan: And for those enterprises considering a move towards open networking, potentially to support AI, ML (Machine Learning), LLM (Language Learning Machine) or HPC (high performance computing) —which is more and more what we're seeing—what advice would Celestica offer as a trusted partner, and what are some key steps they should consider?
Don Evans: I think if you're looking at it from that perspective, there's a lot of research out there on created, tested, certified solutions. We manufacture low-latency switching. So, if you're looking at it from a turnkey solution, you can pick different partners that you may already have in place or new ones. You can see the whole layout of a complete AI network.
There are some things you've got to learn on your own, but it's really all there to be educated upon. All of our products—you can go online, we have all kinds of tools you can use on our website that help you create these solutions. And then we also have these partnerships that allow you to take it to the next step. All of us working together to create a truly trusted and certified solution that works.
Alan Fagan: Let’s talk a little bit about a recent win that we've had together. One of the reasons you're in Boston is to visit the customer. It's an end-user in the financial industry, and they bought some Celestica storage products. They're also looking at Celestica networking gear as well.
Tell us a little bit about why Celestica is a good fit for financial companies. Financial companies can be tricky. They demand low latency and need high reliability from their infrastructure. So, what is it about Celestica products that makes them suitable?
Don Evans: As an OEM or ODM manufacturer, we are coming out with higher performance or newer solutions faster than most. So, from the perspective of what this customer was looking for, they were looking for performance, for Gen 5 PCI-based storage. And then they also had a software relationship, a storage software relationship with somebody else. So they needed to have a platform to put this storage software on.
During these discussions, they had a number of requirements, and we met those requirements. We also gave them the ability to pick and choose the type of storage they wanted built into the box to go along with this high-performance software. So we were able to create the right solution together. The testing went great, all the performance metrics were met, and it ended up working out perfectly for them.
The biggest part of this was how we tied in from a platform perspective into that software project they have, and we were able to deliver the baseline product for them.
Alan Fagan: Yeah, I think it really is a key message: that integration of the software and the hardware together, building solutions rather than discrete products.
Can you talk a little bit about the partnership that Celestica has with EPS Global? From your perspective, how has it been working, and why is it important for Celestica to have a partner like us in the mix?
Don Evans: I've known you guys for a number of years. When it comes to open networks, there's nobody better than you guys. Your ability to understand your customer base and what they're looking for from open networks—not only product but education—makes a huge difference to us. The ability for you guys to offer our products here in the US and in EMEA is important to us.
The whole way you guys tie in the different layers of networking: you sell cables, you sell optics, you sell the switches, and now the storage. This is a perfect partnership to get our products out there. The timing is perfect. How you guys are set up is perfect from our perspective. And it's been very fruitful for both companies.
Alan Fagan: That's great. And it goes back to what we mentioned about tying the software and the hardware together. We're doing that, but it's tying hardware from multiple different vendors and turning it into a solution. It is something that we're very proud of: the presence we have in open networking.
Don Evans: It's so funny because when I've talked to end-user customers, they say, "I want to buy a switch." I go, "Well, it's not just buying a switch. You need to buy cables, optics, software. You need to get it all integrated." And that's where you guys really come into play.
Alan Fagan: We’ve seen it again and again over the years. As soon as we started working in open networking, there's the "tyranny of choice," as people call it. People think they want to have a choice of all these different things until you say to them, "Here are 50 options, you figure out which ones you want." So, you're right, our ability to help them through that and go, "Here's the right switch, here's the right optic, here's the right cable, here's the right software, and here's a package that will do the job that you want it to do."
Looking towards the future of network and infrastructure, what emerging trends or technologies do you believe will have the most significant impact on how organizations design their networks over the next few years?
Don Evans: Performance, scale, power—power control. Liquid cooling. Those are the main things. But performance is just getting more demand for high performance as you move forward.
Alan Fagan: Driven by AI, I would say, primarily.
Don Evans: Exactly. And also, from the perspective of selling networks, the ability to create "open." The openness, because that is becoming a really big demand from the enterprise. They don't want to be involved in proprietary-based solutions anymore. They want the openness of what SONiC can bring to them.
Alan Fagan: I think it's interesting that you led with the openness and the flexibility. Because I think there's a fundamental misunderstanding a lot of times of why open networking is adopted. People think it's because of cost.
Alan Fagan: It's primarily because of control and flexibility. The cost is a great benefit, but it's typically secondary. I think when we entered it first, it surprised us, but every time we talk to a customer or a partner, that's reinforced. It's not just about cost; it's the flexibility and the openness.
Don Evans: It is. And customers, you know, the Fortune 500 are asking for that control factor more and more.
Alan Fagan: Absolutely. Well, Don, that's the end of this podcast. I just want to thank you for participating and thank you for the partnership. You mentioned earlier that Celestica has been around since the early 90s. EPS Global has been around since 1999. It's a great partnership. We're very proud of the fact that Celestica would choose to work with us. And we're really glad that you see the value in the partnership. Thanks again.