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Just Don't Say IBM Is 'Relaunching' Networking Business

Mitch Wagner
3/26/2015

IBM has consolidated its networking capabilities into a single business unit and is talking publicly about its strategy, after a long period of silence.

Just don't say the company is "relaunching" its networking.

IBM was a networking leader back in the 90s, the era of Mom jeans, Seinfeld, and M.C. Hammer. The company sold its routers and switches to Cisco Systems Inc. (Nasdaq: CSCO) in the late 90s, at about the same time it sold its Advantis networking services business to AT&T Inc. (NYSE: T), which still supports IBM's internal networking. IBM dispensed with its top-of-rack switches much later, as part of a deal that saw Lenovo Group Ltd. (Hong Kong: 992) take over its x86 server business in January 2014.

Later that month, rumors swirled that IBM was on the verge of selling its SDN business unit. (See IBM's SDN Poser.)

That didn't happen. But IBM hasn't had much to say about networking in the intervening 14 months, referring to it in the occasional modest partner announcement but otherwise keeping mum.

Until today, that is, when it announced it would open two proof-of-concept labs -- which IBM is calling "Network Innovation Centers" -- in Nice, France, and Dallas, Texas, "where clients can explore Software Defined Networking, virtualization and analytics-driven [network] automation technologies and services," IBM said in a statement.

We took the opportunity to jump on the phone with IBM network services VP Rick Qualman, VP networking services, to find out what the company's been up to, networking-wise.

Until the beginning of the year, IBM did not have a single organization for networking. Networking resided across multiple organizations within IBM.

"That's why a lot of people thought that we weren't in the networking business. Because it was spread out across IBM," Qualman says.

In January, IBM consolidated networking services into a single business line, with several thousand staff, underneath the Infrastructure Services organization.

IBM is focusing on providing integration services for Brocade Communications Systems Inc. (Nasdaq: BRCD), Juniper Networks Inc. (NYSE: JNPR), Cisco Systems Inc. (Nasdaq: CSCO) and other vendors' equipment. "We don't have a legacy business we need to protect, and can help clients know which technologies are ripe for which environment," Qualman says.

About 60% of the IBM networking business is enterprise, focused on using VMware NSX in the data center, with 40% carrier business, with PoCs around virtual CPE, firewall and load balancing. One PoC is about how enterprises can use technologies delivered by carriers to move workloads between clouds including Amazon.com Inc. (Nasdaq: AMZN) Web Services and IBM's own SoftLayer.


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IBM's customers are looking to move to early deployments in the second or third quarter, Qualman says.

Reorganization, new messaging… sounds like a relaunch. Qualman balks at the phrase. "It's a refocusing of IBM's networking mission," he says. "We had a fairly large business that we now have a single organization to drive strategy and messaging around."

Whatever you call it, IBM is back. It remains to be seen whether the company will be a big fish in networking, or if it will sink beneath the surface again, silent and invisible, for another long period.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

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MikeP688
MikeP688
3/30/2015 | 2:23:02 PM
Re: Elephants
My takeaway on IBM's history has been one to "enable" and "empower".   If it lives up to that tradition, it will be fine--as it also spreaheaded the open source movement in a major way during the 90's.  Time will tell--that's for sure. 
DHagar
DHagar
3/30/2015 | 2:06:18 PM
Re: Elephant
MikeP688, you are correct in that their size will either be a + or a -, depending on how well aligned the efforts are and again, if they don't lose the focus on what they can uniquely do.

Note:  This also addresses kq4ym's point, it will be a force for them if it is put together right.

I guess this will all depend on their ability to execute.  I bet that they can - it will take all the unique capabilities (ie Watson, etc.),  that they have developed, but I think they can and will.
kq4ym
kq4ym
3/30/2015 | 1:57:01 PM
Re: Elephants
With this "relaunch" it will be interesting to see where it goes. With it's plan of  "consolidated networking services into a single business line, with several thousand staff" it would seem to be a serious effort. I'm curious how this staff size would compare with others planning to offer similar network services and how IBM's experience might be beneficial or not over competitors.
MikeP688
MikeP688
3/30/2015 | 1:51:00 PM
Re: Elephants
The key challenge is to leverage this the right way--yes they still have a lot of people but how to leverage the asset will continue to be ultimate challenge.   
DHagar
DHagar
3/30/2015 | 12:48:03 PM
Re: Elephants
MikeP688, I fully agree.  That is great technology where they can really distinguish themselves.  I see them focusing on that core and build bridges "platforms" to that capability.

MitchWagner, I believe you are right.  When you have the expertise + the capital, you can invest in those markets you choose and win!
Mitch Wagner
Mitch Wagner
3/30/2015 | 10:57:06 AM
Re: Elephants
nasimon - All that money gives them plenty of fuel with which to catch up to the competition. They can throw a lot of people at the problem. 
SachinEE
SachinEE
3/30/2015 | 3:44:22 AM
Re: Elephants
@Nasimson: Nothing. Mitch is concerned about the stability of his data.
MikeP688
MikeP688
3/29/2015 | 10:06:17 PM
Re: Elephants
If I was IBM's CEO, I will focus my efforts on Watson and the opportunities before it.   Watson, to me, is a fascinating concept.   It is one of the driving forces that will distinguish it from the others--yes Virtually reality is nice--but the computing power and independent thinking that Watson represents will allow IBM to wean itsself away from pushing hardware--I remember (and worked on projects) with Sun E10K's that cannot even be given way on Ebay now :-) 
nasimson
nasimson
3/29/2015 | 3:41:09 PM
Re: Elephants
@Mitch: 

> IBM has an awfully large amount of capitalization. Running behind
> isn't so much an issue for them.

What has large capitalization to do with ok being a laggard? Or am I missing something here?
Mitch Wagner
Mitch Wagner
3/27/2015 | 5:14:41 PM
Re: Elephants
IBM has an awfully large amount of capitalization. Running behind isn't so much an issue for them. 

And there may be demand for their kind of vendor-neutral integration. 
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