Comments
Why IBM May Abandon SDN
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jgherbert
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jgherbert,
User Rank: Ninja
2/28/2014 | 10:20:41 PM
Re: When to sell
@mbushong:

I don't think SDN is a market so much as an architecture. There will not be any real net-new spend because of SDN. It simply shifts existing network spend to a new class of product. There will, of course, be a change in whether dollars are spent on hardware or software, but I view that more as a change in pricing mix than a material change to networking at large.

Mike is wise (Hi Mike ;-). Seriously, by definition SDN must be able to keep costs under control or it isn't a truly viable alternative unless it brings to the table something staggeringly fantastic that can offset the additional cost, just like any new technology. Mike also mentions the ingegration of SDN with legacy networking, which is a key point; it's not like the whole world will suddenly become an SDN shop. Greenfield deployments might be that way, but brownfield deployments will likely be little ponds of SDN in a wider legacy network, slowly growing as confidence grows with it. So while the SDN market value is going up, I wonder what's happening to the "legacy networking" market forecasts at the same time if our dollars are going on controllers and software rather than intelligence in the network hardware? 
Charlie Babcock
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Charlie Babcock,
User Rank: Ninja
2/18/2014 | 8:30:49 PM
IBM savvy about open source
I think Andrew is guessing correctly. IBM has a sense that either Open Daylight or the SDN part of OpenStack or both have staying power, and therefore software-defined networking will start out as a commodity market, with thinning margins from there. IBM is using the vitality of open source code as a predictive power in the marketplace. And IBM, unlike some companies, has always been saavy about open source.
Andrew Froehlich
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Andrew Froehlich,
User Rank: Apprentice
2/18/2014 | 1:49:34 PM
Re: Dump Switches, Focus on SDN Applications and Services?
@RobPreston -- But SDN is far more than just networking. It's storage, management and monitoring of the entire data center. So while in some ways, IBM isn't involved directly with infrastructure networking, they are involved heavily in other parts of the data center including SAN and infrastructure management tools.
Andrew Froehlich
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Andrew Froehlich,
User Rank: Apprentice
2/18/2014 | 1:47:41 PM
Re: Dump Switches, Focus on SDN Applications and Services?
"The company could focus on SDN applications and services, which would make more sense for IBM"

I think you're absolutely correct @Drew. IBM seems to think that software and support is the way to go...
@mbushong
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@mbushong,
User Rank: Strategist
2/18/2014 | 11:57:15 AM
Re: When to sell
I don't think SDN is a market so much as an architecture. There will not be any real net-new spend because of SDN. It simply shifts existing network spend to a new class of product. There will, of course, be a change in whether dollars are spent on hardware or software, but I view that more as a change in pricing mix than a material change to networking at large.

That said, you have to wonder who will integrate SDN architectures in existing companies. There will be an opportunity for professional services for systems integrators. That integration will happen at the controller level more than the hardware. I wonder how IBM views that opportunity, particularly if it encroaches on the rest of IT. 

-Mike Bushong (@mbushong)

Plexxi
RobPreston
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RobPreston,
User Rank: Author
2/18/2014 | 10:36:14 AM
Re: Dump Switches, Focus on SDN Applications and Services?
Has IBM ever shown a long-term commitment to the networking business? It sold its networking hardware unit to Cisco more than a decade ago before getting back in. 
Drew Conry-Murray
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Drew Conry-Murray,
User Rank: Ninja
2/18/2014 | 9:36:24 AM
Dump Switches, Focus on SDN Applications and Services?
This is still speculation since IBM hasn't confirmed its plans. However, I could see IBM getting out of the network hardware market without getting out of the SDN business. The company could focus on SDN applications and services, which would make more sense for IBM. To my knowledge, IBM didn't have all that much market share for data center switches, so it makes sense the company would shed that business along with servers.

At the same time, IBM is heavily involved in OpenDaylight, which makes an open-source controller. IBM could continue to develop applications that can interact with OpenDaylight and other controllers, and also offer integration services for companies trying to roll out SDN projects.
SaneIT
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SaneIT,
User Rank: Ninja
2/18/2014 | 8:48:01 AM
When to sell
I can't say if it's wise for IBM to sell off now but I do think that SDN is going to be a very crowded market in the next few years and it will be difficult to make money.  The open standards and the fact that so many of the big players are making interoperable systems it's going to be hard to lock someone into a single vendor solution and migrating to another vendor should be very easy for your second or third generation project.  Maybe IBM can become the next Xerox PARC, that would be very cool to see happening again.


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