7 thoughts on VMWare's $1.26B bid for Nicira

5. Engineers jump in the stream
Nicira’s big payday will “gain the attention of new engineers surveying the high tech job market,” said Lippis in his analysis. “For years, established networking firms and startups competed [poorly] with Internet and social networking firms for new engineering talent [but now] networking is cool again,” he said.

Dan Pitt, the executive director of the Open Networking Foundation (ONF) that manages the OpenFlow specification talks about SDN as the democratization of the network. “We will see app stores [for networks because] I think there is a long tail in unmet networking needs,” he said at NetEvents last week.

Others agreed that with SDN a broad stream of new technical blood could flow into communications. “I think the value comes from tapping into a very large pool of Web developers rather than a smaller pool of network developers,” said Ralph Santitoro, who oversees a cloud computing initative at the Metro Ethernet Forum.

6.  Industry realignment ahead

New partnerships have already been forged with SDN. IBM, for example, partners with NEC that has taken a lead position in rolling out OpenFlow-based controllers.

Other partnerships will come under strain. Cisco, for example, is an investor in VMWare, but the router giant has its own internal SDN initiative that competes with Nicira, Lippis noted.

Most of the big router and switch makers have yet to roll out a comprehensive SDN strategy, let alone an ecosystem of partners, so expect many more shoes to fall.

7.  This technology is immature

The Gold Rush miners started out as a bunch of individuals using pans to sift gold from streams. They ended up as a few big companies using hydraulic mining to blast away hillsides.

So, too, the technology of SDN is still in its first incarnation. Is OpenFlow foundational or transitional to SDN, asked Dell’Oro’s Quillan last week.

Indeed, one interface specification does not necessarily make for a revolution. What’s more, OpenFlow is still in a fairly skeletal form.

Senior engineers from Extreme and Huawei both said much of the value of OpenFlow could come from so-called northbound APIs that give servers information about what routers are doing. So far the ONF has talked about such APIs, but it hasn’t christened a work group to deliver them.

Similarly ONF was at one point working to define a hardware abstraction layer for router ASICs. That effort has been reconstituted now into a more generic initiative to model forwarding plane capabilities.

Lippis points out that VMWare was collaborating with big names such as Cisco and Intel on VxLANs as a key overlay for hybrid networks. Nicira takes a different approach based on STT tunneling protocols.

Reconciling the two techniques is just one of a list of jobs ahead for VMWare if it is to deliver value from the Nicira deal. The company also is digesting an earlier and much smaller acquisition of DynamicOps, a cloud automation specialist.

For their part, end users have yet to encounter the thorny technical bits under the covers of the SDN vision. For example, they need to test as part of one network SDN gear and code they likely will acquire from multiple companies—a job big vendors like Cisco do for them today.

“A lot of users don’t realize as they go on the SDN road they are taking on the system test responsibilities,” said Jurrie van den Breekel, a marketing director at Spirent Communications that launched an SDN test capability in May, so far in use with one service provider and five OEMs.

As they are no doubt discovering, there’s plenty yet to be learned here.