In the course of my work with Clear Ventures, an early-stage technology investment firm based in Palo Alto, I’m always looking for companies like Arrcus. In fact, our firm has invested in Arrcus because we’ve seen the magnitude of the company’s potential to disrupt some very entrenched standards in the network infrastructure industry. The disruptive ideas Arrcus is bringing to the industry are driven by an excellent team of proven individuals, both on the technical side as well as on the leadership side. To us, that’s a combination that deserves our attention.
The data center landscape is changing
What drew me to Arrcus originally was the massive global data center arms race that’s heating up at a rapid pace. There’s currently 180 million square feet of data center space built out in the US, and that number is growing very aggressively. In the United States alone, by the end of 2016 there were 300 hyperscale data centers. That number grew to around 400 by the end of 2017, and is expected to grow to 500 by the end of 2019.
This growth in the data center market has put tremendous pressure on the traditional network infrastructure that connects servers with each other, with storage, and with the WAN.
In addition, the networking industry itself is going through some fundamental changes. We’re seeing the balance of power shift from the large system integrators and embedded system vendors to the silicon vendors. These companies have been making tremendous strides in commoditizing network hardware within the data center networking fabric.
Of special note, one of the largest data center operators, Google, is purchasing its networking fabric directly from the hardware manufacturers. They were able to do this by vertically integrating and building a very robust network operating system. This is software that has implemented the key protocols including segment routing. These functions are the heart and soul of the networking fabric, and amazingly don’t have a good merchant alternative available today. This is where Arrcus comes in.
What we saw in Arrcus
I’ve had the good fortune to work in Silicon Valley as an early stage technology investor for the past two decades. I first met the Arrcus team in the summer of 2017, and was delighted to learn more about their business and their vision of network infrastructure. Over the years I’ve learned there are three things needed to create a large, durable franchise company.
First, you must have a large market opportunity that is ripe for disruption, a strong team as a compelling asset, and second, you must have a highly disruptive best-in-class product. These ingredients are clearly all present within Arrcus, which has a world-class team and a concept for network infrastructure that’s meeting a very underserved need in the market.
With this formula, Arrcus is very well positioned to take on the challenges modern data centers are position to the network infrastructure they rely on. Arrcus has embarked on an ambitious project to reinvent and reimagine the networking infrastructure for the warehouse-scale data center era. Essentially, Arrcus brought some of the best and most experienced talent in the industry together and have reimagined the network operating system from the ground up.
I’ve been collaborating with the team since the inception of the company, and we’re amazed at the progress they’ve made in such a short timeframe. Our expectations have been borne out in early customer validation in the market as well, which is a very good sign.
Chris Rust is a founder and General Partner of Clear Ventures, where he invests intechnology companies. Prior to founding Clear in 2016, he spent 13 years as a Partner at Sequoia Capital and USVP. His seed and early stage investments include Abrizio (PMCS), Avanex (IPO AVNX), Dune (BRCM), GoPro (IPO GPRO), LVL7 (BRCM), Mellanox (IPO MLNX), and VxTel (INTC). He also spent 12 years in operating roles as a development engineer, network architect, and product manager. Chris was a co-founder and Lead Architect of broadband access pioneer Roadrunner (re-branded as Time Warner Cable Internet) . Roadrunner grew to 14 million subscribers, over $4 Billion in annual revenue, and was the key driver of Charter Communication’s $56 billion acquisition of Time Warner Cable. Chris earned a B.S.E.E. and an M.S.E.E from the University of Lowell, an M.S. Telecommunications Engineering and an M.E. Engineering Management from the University of Colorado, Boulder.