Is it me, or does the network industry remind you of Revenge of the Nerds? Networking was cast aside in the cloud revolution, but now companies are learning -- the painful way – what a mistakes that was.  Don’t kid yourself one bit if you think that VMware’s acquisition of Nicirawas mostly about developing heterogeneous hypervisor data centers or reducing networking hardware costs. If you do think that, you’re probably an application developer, hypervisor administrator, or data center architect. You’ve been strutting your newly virtualized self through rows of server racks over the last five year, casually brushing aside the networking administrators. You definitely had some outside support for your views: Google, VMware, and even OpenFlow communities have messaged that networking organizations aren’t cool anymore and need to be circumvented by coding around the network, making it a Layer 2 network or taking over the control plane.

To be fair, though, networking vendors and networking teams helped to create this friction, too, since they built their networks on:

• 40 years of outdated networking reliability principles. The current state of networking can be in many ways traced back to ARPANET’s principle: a single method to reliably communicate a host of multiple sets of flows, traffic, and workloads. Basically, voice, video, and all applications traverse the same rigid and static set of links that only change when a failure occurs. The package didn’t matter.

Brocade isn’t the loudest networking vendor on the block, but more than two weeks ago it released a subscription switching service that should have sent a shockwave through the industry. With Brocade Network Subscription,customers pay for their network infrastructure on a monthly basis.  Sadly, the new service was not some new xfabric or new-fangled technology, the industry was quick to dismiss the news as anything more than another cloud announcement, and so Brocade’s subscription program registered only a murmur. What was missed was that the service helps to solidify I&O as a business unit on the same level as manufacturing, services, energy, and other businesses.

I’ve written extensively about how networking solutions need to support two business realities: 1) Enterprises are embedding themselves in their customers’ lives, and 2) businesses are forming symbiotic relationships with their vendors. In regard to the latter, businesses want to ensure that their vendor is creating products and solutions that are in the best interest of that company, and so there is an expectation that their partners will carry some of the financial risk and burden, ensuring that they will stay committed. On the vendor side and with respect to embedding themselves, the reasoning is twofold. First, Wall Street rewards recurring revenue streams, and this is more likely if the vendor can create something the customers can only get from that particular source. Second, vendors know it costs ten times as much to find new customers and would prefer to have a customer keep coming back to keep their operating costs as low as possible.

As a result, there has been a shift to a subscription service model. Take for example three distinct markets that support this strategy:

I’m a sucker for good, biting humor, and in the spirit of Stephen Colbert’s Medals of Fear that he gave to a few distinguished souls (the press, Mark Zuckerberg, Anderson Cooper) at the rally in Washington D.C., I would like to hand a medal to the U.S. State Department for its 1999 publication of a country-by-country set of "Y2K" warnings — “End of Days” scenarios and solutions — for Americans doing business in 194 nations. I would give another medal to IPv6, the most drawn-out killer technology to date — and one that has had the longest run at trying to scare everyone about the end of IPv4. At Forrester, we are starting to see the adoption freighter slowly turning via the number of inquiries rolling in; governments accelerating their adoption with new mandates; vendors including IPv6 in their solutions; and the Number Resource Organization escalating its announcements about the depletion of IPv4 addresses (only 5% left!). To add to the drama, vendors are in the process of creating IPv4 address countdown clocks to generate buzz and differentiation. These scare tactics haven’t worked because technology pundits haven’t spoken about IPv6 in business terms. There is enormous business value in IPv6; those who embrace it will be the new leaders in their space.

There has been a lot of press about IBM’s acquisition of BNT (Blade Network Technologies) focusing on the economics and market share of BNT as a competitor to Cisco and HP’s ProCurve/3Com franchise. But at its heart the acquisition is more about defending and expanding a position in the emerging converged server, networking, and storage infrastructure segment than it is about raw switch port market share. It is also a powerful vindication of the proposition that infrastructure convergence is driving major realignment in the vendor industry.

Starting with HP’s success with its c-Class blade servers and Virtual Connect technology, and escalating with Cisco’s entrance into the server market, IBM continued its investment in its Virtual Fabric and Open Fabric Manager technology, heavily leveraging BNT’s switch platforms. At some point it became clear that BNT was a critical element of IBM’s convergence strategy, with IBM’s plans now heavily dependent on a vendor with whom they had an excellent, but non-exclusive relationship, and one whose acquisition by another player could severely compromise their product plans. Hence the acquisition. Now that it owns BNT, IBM can capitalize on its excellent edge network technology for further development of its converged infrastructure strategy without hesitation about further leveraging BNT’s technology.