This week we’re attending VMworld in San Francisco, talking with customers and partners about huge changes in store for corporate datacenters. And unlike past years, at this year’s event the spotlight shines brightly on the role networks will play changing how datacenters work. Network innovations are driving important changes in datacenters, and a lot of the innovation people are talking about is pinned to three letters: SDN.
Software-defined networking, or SDN, is emerging as a trend in networking that’s attracting huge attention from vendors, media and industry analysts. Our temptation is to compare SDN investments, product offerings, technologies, and engineering skills to see who we think will rise to the top. This is the equivalent of picking the Super Bowl favorites as we head into training camp. It is fun to do, and chances are some of us will guess right. But ultimately it’s too early today to pick winners – Super Bowl or SDN.
In the networking space, what are the intangibles that turn leaders into winners? One of the most important aspects is motivation. If you understand the motivations of the companies involved, you can better predict what the eventual outcomes will be. So the question today is not who will win, but rather what are their motivations?
I can break motivations down by the market position that a company holds:
In a dominant market share position, the interest of the incumbent is to preserve revenue. Success is not measured by taking share but rather capitalizing on existing customer deployments and monetizing current products as companies refresh and upgrade.
For a dominant incumbent, disruption is a dangerous thing. Your biggest fear is that the game itself changes, which levels the playing field in favor of challengers. When a disruptive technology comes along, are you best served by aggressively pursuing it? How do you incorporate the disruptive technology into your existing product set while preserving your dominant position?
Given these considerations, can the dominant incumbent ever truly embrace disruption? It depends. The engineers and architects will aggressively pursue new technologies. But the decisions are still made by a corporate organism that has self-preservation at its core. The dominant incumbents may only successfully incorporate disruptive technologies if they recognize they have to in order to survive.
So that’s that the dominant incumbent. What about the challenger with minority market share position? Challengers typically like disruption in markets where they’re chasing incumbents. Challengers that are not content to eke out microns of market share at a time will tend to rally around opportunities to disrupt. So how does the challenger pursue disruptive technology? With arms wide open, running at full speed, and acting as if their lives depend on it. Because they do. You would build the technology not in a way that requires refresh but in a way that leverages your existing install base. The idea here is that you want to turn your install base into an asset that drives future sales. Wherever possible, you make the technology portable to the entire portfolio because you want the disruption to take root. Everywhere. You actually want the industry to tip, so you make sure that whatever you do is real and advances the broader cause.
This leads us to VMware and Nicira – and motivation. As a startup, Nicira embraced disruption. It had everything to gain by using disruptive technology to change datacenter networks. Its corporate life depended on its ability to produce disruption. Now that it has been acquired by an incumbent in the virtualization space, are its motivations the same? Will openness with an eye on insertion and interoperability remain the focus? Or will we start to see proprietary hooks and extensions creep into more of its products?
I actually don’t know what the answer will be, but it wouldn’t be surprising to see the sudden shift from challenger to incumbent change product strategies. Because of motivation. I have no doubt that VMware will keep things “open,” but I suspect that Nicira’s technology and open source strategy might evolve over time. The point is we can’t judge tomorrow’s products on today’s motivation. Only time will tell.
So here we are at VMworld, somewhere in the middle of the training camp equivalent of the SDN Super Bowl. People are picking Super Bowl winners. On paper, the outcome might seem predetermined to some folks. But motivation matters. At Juniper we see a huge opportunity, first with QFabric and now with SDN, to tip the market toward a more dynamic, higher-performing datacenter. And this plays to Juniper’s vision and central motivation all along.