When rivals collaborate, pay attention

Here is an interesting bit of news from Reuters:

A consortium of technology giants: Cisco Systems, IBM, Citrix, Juniper Networks, VMWare, Microsoft, Red Hat, Intel, Brocade, Big Switch Networks and Arista Networks are teaming to invigorate software-defined networking.

Known as SDN, software-defined networks should reduce the amount of networking gear needed in data centers by using software that is centralized on the servers.

Reuters reports that each company will contribute technology such as coding, and share the costs of basic research and development. It also will allow products from each company to work together. But they will still have the flexibility to differentiate their products from one another.

The consortium is known as OpenDaylight, and will be a development platform. The platform will be Linux-based, and is operating under the Linux Foundation.

I find a couple things interesting about the move. First, you have competitors collaborating – Citrix and VMWare; Cisco and Juniper; and Microsoft and Red Hat. I think this demonstrates that they recognize real pain points for their customers. In this case, operating costs and the efficiency of the data center.

It is in their collective best interest to address these pain points and do it in a collaborative way. Customers need to reduce costs and simplify operations, so they want products that work together. If these companies don’t collaborate on a way forward, it puts them at a long-term, competitive disadvantage.

IBM's involvement also is interesting. They do make a lot of hardware and software for the data center, but of the members of the consortium, they are the only one with a leading consulting and services business. They could be the first to market from an implementation and services standpoint.

I won’t pretend that I understand the technological implications, but this announcement also fits with some tech trends I’ve been hearing about, particularly that software for everything is the future.

I wrote a blog in February based on a talk I heard at a Fairfax County, Va., Chamber of Commerce event. The speakers on a mergers and acquisitions panel were asked to name some emerging technology areas.

Mark Spoto of Razor’s Edge Ventures talked about software. “Everything being done today by hardware will be done by software soon. And that’s very disruptive,” he said.

That comment has stuck with me, so when I saw the OpenDaylight announcement and the diversity of companies joining the effort, it was a little bit of an "ah-ha" moment.

How soon will we see an impact in the government market is anyone’s guess, but when you see these tech companies collaborating you can bet it won’t be long.

The Reuters story also quotes an IDC study that puts the software-defined networking market at about $360 million in 2012, but should hit $3.7 billion by 2016.

That’s an impressive leap, so in a tight government market, this kind of technology could be a welcomed bright spot.