This was one of those weeks when virtualization, or some derivative thereof, was on the tip of many tongues. It represents the concept du jour, the pot at the end of the rainbow, and lots of companies want in on the action.
For example, Juniper Networks and Ericsson (NASDAQ:ERIC) weighed in on virtualization this week, as they've been doing all year. So, too, did Brocade, a long-time player in enterprise data centers that now wants to compete against the big telco vendors.
Kelly Herrell, vice president and general manager of Brocade's software networking business, contends the telecom industry, including wireless, is about to undergo a massive technology shift, and that makes the time ripe for new vendor entrants.
I chatted a bit with Herrell, who was formerly CEO of network virtualization startup Vyatta, which Brocade acquired late last year in an all-cash transaction. He recalled the heyday of the mainframe computer business, leading me to reminisce about my halcyon days doing data entry at a Denver radio station on an IBM System 36 that my coworker had nicknamed "Carlos."
Herrell's recitation of history noted that the arrival of Unix essentially killed the mainframe computer business, shifting the vendor landscape from IBM to the likes of Sun Microsystems and Hewlett-Packard.
In time, the second wave arrived in the form of Linux, which enabled Unix-like performance and functionality on Intel chipsets. Subsequently, Sun became toast (it was bought by Oracle in 2010), HP is on the ropes "and the winners are shipping Intel boxes," Herrell said.
"There is case study after case study of large industries that went through massive disruption. When this happens, the vendor landscape changes dramatically," he said.
As Herrell noted, there are lots of reasons for this, but typically the change has to do with the fact that the incumbent vendors' business model cannot accommodate the new economics of the disruptive business model, making them slow to respond to customer demand. "Customers open their pocketbooks and basically fuel the attackers," Herrell said.
Some incumbent providers of network infrastructure gear--Herrell cited Ericsson and Nokia (NYSE:NOK) Solutions and Networks (NSN)--will probably find a way to compete in the emerging virtualized environment. But he said other companies, such as Cisco, may be less ready to shift to a software model for fear of disrupting their lucrative enterprise business.
Regardless of what the incumbents do, new competitors are likely to find their way onto the emerging software-centric playing field in telecom. At least, Brocade would like to think so.
"A company like Brocade has every opportunity to go in and be that fresh face, the new vendor added to the list," Herrell said.--Tammy