A Song of Speed and Uptime: Announcing the Nile-8VC Partnership
Enterprise networking is the offensive line of IT. It’s not flashy. Few understand its inner workings. It tends to get taken for granted. Yet it is a key determinant of forward progress, and when something goes down, or you need to replace a key piece (or worse, start from scratch), people instantly panic.
Today, 8VC is proud to announce that its portfolio company Nile, led by legendary founders, is making its public appearance after four years of stealth, following twenty-five years of relative stasis in the domain, to bring enterprise networking into the modern cloud-native age.
With effortless deployment, purpose-built hardware, and highly intelligent, automated maintenance, Nile promises to save millions of hours of designing, deploying, & troubleshooting, and billions of dollars in OpEx, while unlocking innovation and productivity that have been stifled by a shaky status quo. CEO Pankaj Patel and co-founder John Chambers combine decades of experience leading Cisco with the ambition to rewrite the entire networking playbook. We are proud to support this ambition, along with March Capital, Koch Disruptive Technologies, JC2 Ventures, and ICONIQ (among others), as part of Nile’s $125 million in funding.
The State of Enterprise Networking
In the past, the difficulty of enterprise networking was a textbook necessary evil. Every organization with a physical presence, from a small business to the Fortune 500, needs strong network connectivity for their devices as well as employees. This is especially true as companies resume physical presence, go hybrid, or opt for coworking spaces or subleases. Meanwhile, the old challenges around networking haven’t gone away, but in many cases, in-house IT staff have.
Enterprise networking has given rise to many multi-billion-dollar incumbents, and historically, these companies have been pioneers of product development. However, as these incumbents have matured and settled on a larger and larger enterprise footprint, they have grown heavily reliant on systems integrators to filter through the noise of so many SKUs - hundreds of different switches, routers, access points, etc. Pragmatically, it’s hard to say how the average IT team is supposed to figure out what to use for enterprise networking, and zooming out, it’s even more challenging to imagine substantial progress in this massive domain.
Traditionally, getting an enterprise network up and running is a labor-intensive process, one most companies will do their best to complete before an office is open for business. Routers, switches, and access points must be carefully positioned depending on where employees and devices sit and how the network will be utilized. As a function of these choices, you then need to buy and install the right hardware - which requires making major commitments. Networking equipment takes 3, 5, or even 7 years to completely depreciate, while in the meantime an enterprise’s needs - resourcing and technology - will change significantly.
The Bespoke Problem
This is where things get especially complicated, largely stemming from the fact that network configuration needs to be written for every networking device. Under the status quo, everything is shipped to a centralized “staging center” and given the correct network configuration. This sounds straightforward enough, until you realize that:
- It typically takes many weeks or months to source hardware.
- The manuals for switches and access points themselves are extremely opaque.
- Configuration for the entire network requires tens of thousands of lines of code, and remains extraordinarily complex and error-prone. Configuration errors are the root cause of 70% of all network downtime.
Once an IT team has jumped through all the hurdles to (1) determine the physical layout of the network, (2) purchase the right hardware, and (3) work with a systems integrator to correctly install it, they have sole possession of the hot potato of on-premise network management. If this at least sounds mildly exciting, it isn’t. The user experience of network maintenance and troubleshooting remains heavily manual, without modern instrumentation for when things inevitably go wrong. There is little insight into usage. IT teams have to maintain a physical presence, which can be a challenge when those teams have been downsized, contracted out, or responsible for more locations than they have people.
Against this backdrop, it’s understandable why something as essential as networking can’t even have performance and outcome-based SLAs. Furthermore, beyond extensive manageability challenges looms the specter of cost. Much more money is spent on operations than on the hardware itself, with $3 in annual OpEx spending for every $1 in CapEx. With an average lifetime of five years for networking hardware, that means $15 in OpEx for every dollar of CapEx. Across all US businesses, this amounts to an untenable $75 billion annually in operational expenses required to sustain existing complexity.
We have seen the cloud transition happen everywhere, from vertical software to core enterprise infrastructure. Why hasn’t it happened to networking in an intelligent way? When something so fundamental remains broken for so long, it takes on an aura of inevitability. This pessimism, as much as any specific challenge, is what we live to fight against at 8VC. In Nile, with Pankaj, John and the co-founding team, we found a group of builders who dared to look back at the domain they had essentially created and scaled in a past life, and had the freshness, urgency, depth and credibility to wake it from its long hibernation.
The Nile Journey to Enterprise Networking-as-a-Service
As an enterprise spinning up a new network, there are two things you really care about: reducing the time until the network is performant and reliable, and ensuring you can manage that network with the resources at your disposal. With their cloud-native Network-as-a-Service offering, Nile makes networking secure, always-on, usage-based, and - bucking every trend in the industry - simple.
Nile represents vast technical investment, requiring the resources, agility, experience, and perseverance to reimagine enterprise networking. Perhaps the greatest challenge of this process was reducing a staggering amount of technical complexity into the handful of foundational pieces that make up the Nile offering.
For the standup phase, the customer simply provides the basics of their physical presence (e.g. floor plan, headcount, device locations). Nile takes care of the rest, automating network planning and design, selecting zero-configuration hardware for all core use cases, and working with partners to deploy directly to the customer. The multi-month buildout, and staging in an interim location, are both relegated to the past - along with the threat of configuration mistakes. As the network grows, under Nile’s Service Block model, devices talk to each other and mutually authenticate, enabling them to automatically discover and map network topology and connections, which in turn allows Nile to auto-scale to customer demands.
Moving forward to the day-to-day operational aspects of an enterprise network, there are four core product principles behind Nile:
- Maintainability: Once deployed, Nile ensures easy maintenance through constant and comprehensive awareness. Nile includes numerous sensors throughout its networks, with purpose-built hardware instrumented to monitor relevant software and hardware components, as well as environmental factors such as power and voltage. By tracking network health in concert with customer infrastructure and applications, Nile identifies challenges well before they manifest as performance issues, enabling the network to scale seamlessly and intelligently. This is a dramatic evolution from the status quo, in which 40% of problems are experienced by end users before IT has identified them.
- Self-Tuning: With the aforementioned data, Nile can perform data-driven, predictive, and dynamic self-tuning (as opposed to just remediation, which implies that something has already become a problem). This is a crucial distinction, and the ability to act on it is a massive advantage, given the vast range of possible network errors. For perspective, large companies (e.g. 10-100k employees) can get hundreds of thousands of network alerts a month, while even 300 person companies can get tens of thousands.
- Security: As the surface area of enterprise tools and data sources grows, security spend around cloud services is scaling proportional to this fan-out. This places a premium on systems design that enshrines strong security practices. For Nile, this means enforcing principles of isolation, constantly keeping firmware up to date, always encrypting communications, and holding least privilege and zero trust - all from day one.
- SaaSification of Networking: Nile brings AWS-style principles to networking, recognizing that organizational needs evolve, and elasticity, performance, and reliability will always be essential. Rather than forcing organizations to make massive upfront investments that guesstimate future needs, Nile is a consumption-based, pay as you go model that effectively changes billing from waterfall to agile. In addition to industry-first Service Performance Levels, Nile also introduces the concept of “coverage”, ensuring that everyone in the physical footprint of every device has the network access they require.
Beyond the above principles, Nile makes it extremely simple for an end user to discover whether the network is actually the problem. When an application is down, it is a near-universal default to assume that the network is the culprit, which would be a convenient explanation, but is simply not always true. For every user, but especially the majority who aren’t going to ping via CLI, Nile brings much-needed clarity to this fundamental question.
Who Steers the Ship?
Beyond their technology innovations, it is difficult to overstate Nile’s ambition in reinventing enterprise networking from the ground up. One of the best proxies for this ambition is the tiny handful of teams across the world - perhaps only one - that could pull this off. CEO and cofounder Pankaj Patel led a $38 billion product, technology, marketing and solutions portfolio, with a headcount of 26,000 engineers, as Chief Development Officer of Cisco. He is joined as cofounder by John Chambers, who led Cisco as CEO for 20 years. Their partnership transformed networking from an infrastructure perspective, and they are poised to do it again. They bring with them decades of knowledge, trust, relationships, operational muscle, and a deep bench of engineering leadership representing some of Cisco’s best. After four years of furious, heads-down building, and landing marquee customers while in stealth, they are ready to share a glimpse of their revolution with the rest of the world.
Nile is a complete reinvention of the enterprise network as we know it, from the design of basic hardware, to deployment in hours, not weeks, to integrated, worry-free maintenance and monitoring. While Nile is in fact networking-as-a-service, this phrasing belies the magnitude of the vision: networking that simply works.