Cisco May Spend $1B in SDN Drive

From EETimes: With a suite of proprietary switches and software announced today, Cisco Systems hopes to get a leg up in what could be the most disruptive trend the networking giant has faced in years.

The push to software-defined networks aims to simplify the jobs of setting up and running large networks. The concept of SDN does that in part by cutting through a rat's nest of complex ASICs and APIs companies such as Cisco use, pushing jobs instead to apps written in high-level languages, often run on x86 servers.

Cisco aims to deliver much of the promise of SDN with its new products that include both high-level software and new ASICs. Insieme Networks, Cisco's third and potentially largest internally incubated startup to date, developed the new switches and software.

The networking giant could lavish as much as $863 million on Insieme if it meets undisclosed revenue targets. Cisco announced Wednesday it will acquire the portion of Insieme it does not already own after investing about $135 million to date on the novel spin-in startup.

Analysts praised the Insieme products for delivering some of the promises of SDN. However, the proprietary nature of the products could scare off some of its potential customers in large datacenters, they said.

"Its strength and weakness is its vertical integration," said Zeus Kerravala, principal analyst at market watcher ZK Research in an interview with EE Times. "Cisco will get an early-mover advantage with features others don't have, but it will scare others away as vendor lock in."

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