IBM looking to sell their SDN

IBM’s big January sale looks set to continue with the firm’s software-defined networking [SDN] business rumoured to be on the market for some $1 billion.”
ITProPortal
.

This is a fascinating story if true. Given that I’m sure that network virtualisation, be it SDN or other, will become widespread in future years, it makes me ponder IBM’s strategic thinking. If you consider that IBM has limited presence in networking now it means that they’re not cannibalising existing sales so the downside risk appears to be minimised from that perspective.

IBM has far more strategic firepower than little old me, so I’m sure they have a fantastic reason for wanting to offload SDN. Could it be one of the following reasons:

  1. They’ve researched & developed and come to the conclusion that there is more hype than practicality or benefits of the possible solutions
  2. The intensity of hype around network virtualisation is peaking so the value of the business is at its optimal price point
  3. They have developed technology that they believe will supersede SDN
  4. The future margins in network virtualisation will be in services rather than products. Afterall, there is the potential for network virtualisation to go down the path of open-sourcing so product commoditisation is a possibility
  5. The purported benefits (speed to market, rapid turn up/down, OPEX savings) aren’t realisable for organisations implementing SDN
  6. They need to add the cash to a war chest that includes the sell-off of the x86 unit to Lenovo for $2.3B to allocate to another investment vehicle that has more potential
  7. They believe the technology will only have benefits to niche markets rather than creating a widespread revolution and that those niche markets are not existing strong-holds for IBM
  8. The profits from network infrastructure as a whole is passing us by and moving towards more lucrative innovation such as wearable technologies

Do you have your own theories why IBM might be shopping their SDN business around?

If this article was helpful, subscribe to the Passionate About OSS Blog to get each new post sent directly to your inbox. 100% free of charge and free of spam.

Our Solutions

Share:

Most Recent Articles

No telco wants to buy an OSS/BSS

When you’re a senior exec in a telco and you’ve been made responsible for allocating resources, it’s unlikely that you ever think, “gee, we really

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.