Last week, VMware spent $1.26 billion to acquire startup Nicira, giving VMware access to technology known as software-defined networking. Then Oracle spent an undisclosed sum to acquire Xsigo, which makes a very different product, but is also all about the software.
Cisco makes most of its money selling expensive networking hardware with lots of special features. SDN turns those special features into software applications that sit on a server. Companies still need routers and switches, but they can be cheap, inexpensive ones and they may need less of them.
In a blog post, Warrior acknowledged that the company is now facing new threats. “We expect to see new competitors. As we often say at Cisco, if you don’t have good competitors, then you’re probably in the wrong markets.”
She then insists that they won’t hurt Cisco, they will help Cisco.
“Now the question on many people’s minds is whether … Software Defined Networking and network virtualization — represents a threat or an opportunity for Cisco. … To be clear, there will be new business models and new architectures for infrastructure, but SDN no more minimizes the underlying infrastructure than a new steering wheel undermines the importance of a car engine.”
To some extent, she’s right. Companies will need the underlying infrastructure, which Cisco can provide. However as we’ve already noted they won’t need to pay as much for that infrastructure.
However, Cisco recognizes the change in the industry and it’s trying to adapt. It actually has two initiatives to get itself into the action. One is called Cisco Open Network Environment — or Cisco ONE — and the other is a “spin-in” company, Insieme, being run by Cisco’s dream team of engineers: Mario Mazzola, Prem Jain and Luca Cafiero.
Cisco ONE is essentially is a set of application programming interfaces that tap into the software that runs Cisco’s hardware. The idea is that developers can come along and build apps for Cisco gear.
It’s a good idea, but relies on finding developers that want to do that, which so far, hasn’t been easy, says tech analyst Zeus Kerravala on his Network World blog. “If Cisco’s SDN is going to work, CDN [Cisco Developer Network] needs to get going.”
But the bigger question is what will Insieme do? And why does Cisco need two SDN strategies? Cisco has committed $100 million to fund it and promised another $750 million to buy it out.
Yet, Warrior has been deliberately silent on Insieme.
Warrior added the CSO role to her title about a month ago when the former CSO, and CEO heir apparent, Ned Hooper, left.
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