IBM reportedly considering sale of software-defined networking unit

Sources tell re/code IBM (IBM -0.5%), fresh off selling its x86 server unit to Lenovo, is thinking of selling its software-defined networking (SDN) unit.

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.

From other sites
Comments (7)
  • Bruce Loeffert
    , contributor
    Comments (97) | Send Message
    Looks like IBM is trimming the sails looking to become more lean and flexible. Perhaps they are preparing for the next phase, raising cash, cutting loses and looking to the Clouds!
    28 Jan 2014, 04:08 PM Reply Like
  • bd4uandu
    , contributor
    Comments (2074) | Send Message
    Perhaps they need a name change from International Business Machines to Cognitive International.
    28 Jan 2014, 04:53 PM Reply Like
  • thatsthetruthofit
    , contributor
    Comments (98) | Send Message
    Gartner rates them as a niche player in network. Maybe #8 or #9 in the field.
    28 Jan 2014, 05:28 PM Reply Like
  • Momintn
    , contributor
    Comments (6116) | Send Message
    I don't believe this is true. I think SDN is the reason they sold their low-end servers to Lenovo. They have won business replacing other vendors' servers with SDN, such as replacing MSFT servers at Seattle Children's Hospital. Why would they sell something that is very competitive?
    28 Jan 2014, 06:14 PM Reply Like
  • Henry Shine
    , contributor
    Comments (53) | Send Message
    Desparation. It seems IBM will consider selling anything so it can stay afloat until it reaches its 2015 destination.
    28 Jan 2014, 07:10 PM Reply Like
  • Momintn
    , contributor
    Comments (6116) | Send Message
    According to Trefis, hardware is not contributing to the stock price. They have servers, storage, and other contributing .1%.

    28 Jan 2014, 08:08 PM Reply Like
  • Momintn
    , contributor
    Comments (6116) | Send Message
    The article said that IBM was exploring the sale. I don’t believe they will do this because software is the most profitable for IBM. Today they had announcements for SDN which included OpenFlow-enabled switches.


    There is a Barron's article that says Cisco is in trouble because of SDN. I honestly don't know but IBM is a better investment if you are looking for a long-term technology investment.
    28 Jan 2014, 08:20 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs