Big Blue is reportedly asking for as much as $1B, a figure one exec calls "pretty optimistic." The company is said to have informally approached Cisco, Dell, H-P, Juniper, and Fujitsu "to gauge interest." Cisco, Juniper, and H-P have each already launched a slew of SDN-related products.
SDN, a relatively new technology/concept. shifts network intelligence and provisioning capabilities to software-based controllers. By doing so, it aims to improve provisioning times and resource efficiency, and allow proprietary switches to be replaced with commodity/white-label gear; that last feature has many Cisco investors on edge.
Back in 2012, VMware paid ~$1.2B for Nicira, widely considered the early leader in the SDN software space.