Partners Say Cisco Should Consider IBM SDN Buy

Solution providers say they would welcome Cisco acquiring IBM's software-defined networking (SDN) business in the wake of reports this week that suggest Big Blue is mulling a sale of its SDN assets.

Chief Technology Officer Sudhir Verma at Force 3, a Crofton, Md.-based solution provider, said Cisco acquiring IBM's SDN business -- which consists of an OpenFlow-based SDN controller and IBM's SDN for Virtualized Environments (SDN VE) overlay virtual network -- would help broaden Cisco's SDN story beyond its recently launched Application-Centric Infrastructure (ACI) and allow the networking giant to add more open standards-based technologies into its SDN portfolio.

Some Cisco competitors, upon the launch of ACI, said the ACI fabric will continue to lock customers into proprietary Cisco technology. Embracing IBM's OpenFlow-based SDN products could help Cisco fight back, Verma said.

[Related: Lenovo Partners Cheer IBM Server Buy ]

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"At the end of the day, software-defined networking is going to be vendor-agnostic and a multivendor play," Verma told CRN. "With that in mind, I think the Cisco portfolio would get a very big jolt if they were to purchase or make a buy to get into the SDN market beyond just ACI."

According to a report this week from Re/code, IBM has been quietly shopping around its SDN business to vendors including Cisco, Juniper Networks, Hewlett-Packard, Dell and Fujitsu. Sources told Re/code IBM is initially asking up to $1 billion.

IBM, who declined CRN's request for comment, just last week announced plans to sell its x86 server business to Lenovo in a blockbuster $2.3 billion deal.

Bill Smeltzer, CTO of Focus Technology Solutions, a Seabrook, N.H.-based solution provider and Cisco partner, also welcomes the idea of Cisco acquiring IBM's SDN business, and agreed with Verma that the move could help Cisco overcome perceptions of its own SDN strategy being too proprietary.

"I think Cisco is going to have to find some type of rebuttal to SDN and, quite frankly, it wouldn’t surprise me if they went out and did some type of acquisition to do that," Smeltzer said.

Cisco did not immediately respond to CRN's request for comment.

Smeltzer added that he would also expect the move to widen an already growing rift between Cisco and VMware, who staked its own claim in the SDN market with the $1.2 billion acquisition of Nicira in 2012.

"I think the other thing this would do, bigger picture, is really show the divide between Cisco and VMware," Smeltzer said.

Bill Barry, chief architect at Denali Advanced Integration, a Redmond, Wash.-based solution provider, said he would see Cisco's acquisition of IBM's SDN business as a positive for the networking industry at large. Not only does it mean one less competitor to worry about, Barry said, but it could help accelerate the development of industrywide SDN standards and protocols.

Barry noted that both Cisco and IBM are prominent members of OpenDaylight, an industry consortium dedicated to building an open-source framework and architecture that accelerates a common platform for SDN.

"SDN is that the issue is that everybody saw it as a competitive edge. The bottom line, and even for Cisco, is that it's such a core functional protocol of the entire interconnected world we live in that there is no room for anything but a standard," Barry said. "I think open SDN is the wave of the future and I see it as a positive step in that direction.

Michael Gavaghen, vice president of sales at SLPowers, a Boca Raton, Fla.-based solution provider and IBM partner, said he is surprised to see IBM consider a sale of its SDN business so soon after the Lenovo deal.

"My quick thought is that IBM is betting that in a few years, enterprises won't [care] whose technology makes up the stack. They'll align with one cloud or another based on the perceived value of the business intelligence and analytics capabilities inherent in each," Gavaghen wrote in an email to CRN. "The only surprise is how suddenly IBM is chasing that vision, given how recently they closed the Lenovo deal. It ain't your grandma's IBM. It's not even your big sister's IBM."

While still in its early phases, SDN -- or technology that turns the high-end functions of switches, routers and other networking hardware into software that can run on commodity gear -- has already started to shake up the data center and networking markets. According to research firm IDC, the SDN market is set to reach $3.7 billion by 2016, up from just $360 million in 2013.

But IBM, given its recent investments in its Watson cognitive computing unit and SoftLayer cloud unit, does not view its SDN business as a strategic focus, according to the Re/code report.

Zeus Kerravala, principal analyst at ZK Research, told CRN that IBM selling its SDN business would seem like a strange move, given that the SDN market is just now starting to gain some traction.

"You would expect that the growth rate for SDN from here on forward would be pretty strong, so for IBM to not have a solution -- to me, it just doesn’t make a lot of sense and leaves a pretty big hole in IBM's portfolio," Kerravala said. "But they may have decided they are better off partnering with somebody like Cisco."