There’s some personnel shuffling going on over at the EMC-VMware-Pivotal Initiative axis. As reported here on Friday, star engineer Mark Lucovsky is now back at VMware, having handed the Cloud Foundry PaaS over to the Pivotal Initiative spin off. At VMware, he is working on an unspecified “mega” cloud project, according to a now-defunct Twitter profile. Since then we learned that Scott Lowe, virtualization expert at EMC, is now part of the Nicira virtual networking team at VMware, working with Martin Casado.

A lot of folks are watching who goes where from VMware, EMC since the two companies offloaded cloud-related IP and people to the Pivotal Initiative, more details of which will be disclosed this quarter. There has also been a flow of high-level VMware people leaving the fold — most recently CTO Steve Herrod is moving to VC firm General Catalyst.

NetApp and Cisco cinch ties

Cisco and NetApp are working on more FlexPod converged hardware designs for use in branch offices and in the public cloud settings, both companies said last week.  FlexPods incorporate Cisco servers and networking and NetApp storage. The companies are also working to incorporate fast flash storage into FlexPod designs.

Since Cisco is also part of the 3-year-old VCE alliance that combines its networking and server hardware with EMC storage and VMware virtualization into converged hardware, people watch developments on the Cisco-NetApp side carefully.  VMware’s purchase of Nicira and its software-defined networking prowess last summer, has further stressed a relationship that many say was already strained.

Here are some other quick hits from the week.

Beware 7 sins of cloud computing.

What happens if your PaaS  passes?  

Big data super powers: IBM, Cloudera, General Electric??

Big data and cloud computing take human jobs

Citing Superstorm Sandy, Xand adds disaster recovery space

IBM claims huge cloud growth off of unknown base

Cisco’s private cloud: pain and profit

Joyent fires up Hadoop as a Service

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VMware’s Herrod discussing the software-defined data center at Structure.

VMware’s planned acquisition of Nicra for $1.25 billion represents the evolution of networking beyond the hardware-dominated point of view that has sustained the industry for decades. On the same day Cisco said it would cut 2 percent of its workforce,VMware said it would spend roughly 20 percent of its cash buying a networking startup with around 100 employees. Those two seemingly unrelated moves are actually signposts in the journey to networking’s future.

Even as Cisco was detailing its restructuring, VMware punched it in the gut with this purchase, essentially telling its longtime partner that it can stick around for the ride but it will have to stay in the trunk. Meanwhile, the bevy of startups that have identified themselves as part of the software-defined networking zeitgeist are thrilled by the valuation and the events this deal will set in motion.

The clouds guys versus the switch guys.

Facebook’s vanity-free server.

The data center is changing, brought about by the needs of companies like Google or Facebook building out massive data centers and by the stresses and opportunities created by server virtualization. These things are changing the types of gear put into data centers as well as economics of IT. If you are Facebook or Google, every dollar you spend on compute needs to produce a dollar of revenue, which is why both spend so much time developing optimized low-cost computing for their workloads. At the same time, data centers and IT infrastructure requires huge amounts of hardware, and the customers of that hardware want simplicity.

The story is similar for cloud providers, but they also have a greater variety of workloads running on their systems and a greater variety of hardware. Tied to the rise of the cloud is also the looming irrelevance of enterprise computing and, with it, specialty enterprise gear.

In networking, this plays itself out in the rise of companies such as Arista, which offer high-performance boxes made with merchant silicon. Or in the forms of Cumulus Networks or Pica8, both startups seeking to disrupt the hardware side of networking with simpler boxes and a fabric to pull them all together. Those fabrics would run underneath a Nicira controller, making these hardware components complimentary to the emergence of the software-defined data centers. At the core, these value-adds are in the software, not in the hardware.

A similar shift has occurred in the server market as it matured. Server vendors gradually saw their hardware margins erode as their boxes became more commoditized and their manufacturers begin competing with them. The server business is realigning to meet the needs of webscale and cloud computing. VMware, along with many venture capitalists and entrepreneurs, is betting that same shift will occur in networking.

Who controls the control points?

Guido Appenzeller (left) and Kyle Forster of Big Switch

As Kyle Forster of Big Switch, a rival startup to Nicira, explained to me, there have been two ways of attacking the problem in the networking world — from the point of view of the hypervisor or from the top-of-rack switch. Forster says Nicira and his company both started in the middle and Big Switch has drifted over to the hardware top-of-rack side, while Nicira tended to drift toward the hypervisor. That makes the VMware buy a perfect match, but it also highlights where the lines may be drawn when it comes to the future of networking.

The future is still open for a switch-centric vision (with most of the value still tied to software running on that switch), but it underlies the fact that the fights here are about where the points of control — and profits — are in the data center. And no one really believes it’s about the hardware as a stand-alone box. Even companies like Cisco or Juniper that still sell big boxes are investing in software. Their boxes are packed with software that drives up the cost and complexity associated with their gear. But as Facebook’s Frank Frankovsnky and just about everyone I spoke to for this story notes, the data center of the future is getting pulled apart.

This means the hardware is less complicated and disaggregated, but also that the software running on that hardware will be tied together using orchestration layers. The money will be made by selling services tied to those orchestration layers. Maybe you buy a hypervisor or controller that already has what you need, or maybe those who own those control points parcel out deep access to them via partnerships and licenses that will net the owners money or influence. Probably, it will be a mixture of both.

VMware provides that orchestration layer for servers while Nicira is the one providing it for the logical layers of the network. The hardware startups mentioned earlier are providing it for the physical transport of the bits around a data center. That leaves room for other startups at the higher layers such as Embrane, Varmour, LineRate Systems and others.

So who is the next SDN buy?

Dante Malagrino, Co-Founder and CEO, Embrane; Jonathan Heiliger, General Partner, North Bridge Venture Partners; Martin Casado, Co-Founder and CTO, Niciria
(c)2012 Pinar Ozger pinar@pinarozger.com

Dante Malagrino, the CEO of Embrane, said this deal is exciting not just because of the incredible valuation (although, as the CEO of a startup, that’s plenty exciting) but because the deal validates the model of a disaggregated and software-based approach to networking. “VMware is sending a very strong signal to HP, Brocade, Cisco and soon-to-be-former partners, all of which have been fairly active and vocal about networking as hardware,” Malagrino said. “The network is the fundamental ingredient of the software-defined data center and VMware is absolutely acknowledging that.”

However, Malagrino noted that Cisco or Juniper and other hardware-focused players shouldn’t be counted out. Perhaps that’s because he thinks that his startup is a good potential acquisition target, noting that to counter the Nicira and VMware duo, the hardware guys can hedge their bets by buying services that play on top of this software defined data center. There’s also Cisco’s spin out of Insieme, its stealthy attempt to address some of the networking needs of scale-out data centers.

However one slices it, the VMware-Nicira deal was a high-water point for the myriad networking startups out there trying to bring the old way of networking into today’s cloud and webscale world. And this deal won’t be the last. When asked if anyone has tried to acquire Big Switch, Co-founder and CEO Guido Appenzeller said, “We’ve been asked, but we haven’t returned their phone calls so far.”

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• The promise of SDNs in the enterprise
• The promise of software-defined networking
• Cloud computing infrastructure: 2012 and beyond

Dante Malagrino, Co-Founder and CEO, Embrane; Jonathan Heiliger, General Partner, North Bridge Venture Partners; Martin Casado, Co-Founder and CTO, Niciria
(c)2012 Pinar Ozger pinar@pinarozger.com

“Infrastructure of the future will be programmed,” said Dante Malagrinò, co-founder and CEO of Embrane, at GigaOM’s Structure conference on Thursday. That’s a shift from how much of the current data center infrastructure, and networks, are configured, and this evolution has profound implications on who manages it, how it works and how you evaluate it, says Malagrinò.

So what exactly are software-defined data centers? According to Martin Casado, Co-Founder and CTO of Nicira, you can spot them by their reliance on software to tie together the generic hardware and components that are being used to fill massive football field-sized data centers. The generic hardware might have high failure rates, but the software acts as a orchestration layer, explained Casado. It’s a way to “scale out, instead of scaling up,” he said.

Jonathan Heiliger, a General Partner with North Bridge Venture Partners, and a former Facebook exec, called software-defined datacenters “a neat idea,” and said it’s “about giving developers the power to control the underlying elements that their applications use, whether that’s the network or servers or other resources that their serving.” Developers can get in there and manipulate the system, which is a total flip about from how it was previously deployed and managed, said Heiliger.

Malagrinò called software-defined data centers the buzz word over the next twelve months. So expect to hear a lot more about this trend. It’s a shift from the administrator managing the network to a figure of a coder or developer taking over, said Malagrinò.

Check out the rest of our Structure 2012 coverage, as well as the live stream, here.

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• The promise of SDNs in the enterprise
• The promise of software-defined networking
• Cloud computing infrastructure: 2012 and beyond

In the next five years a new way of thinking about, constructing and operating IT will emerge. Data centers are no longer the size of mini-marts but instead are mega-marts like Rob Roy’s 2.2 million square foot Switch data center in Las Vegas. Servers are no longer the unit of computing, but instead are being taken completely apart or are a mere component in the new data-center sized computer, a trend being pushed by Frank Frankovsky at Facebook and at the Open Compute Foundation.

The walls between data centers will also matter less and less as software defined networks help create secure, flexible bandwidth between data centers and eventually continents, which folks like Martin Casado of Nicira are working on. This new era sees infrastructure as a service and the hardware becomes a fungible element, supporting a river of data and applications that flow on top of it. The U.S. government is certainly taking advantage of this shift with its Digital Government Strategy, led by U.S. CIO Steve VanRoekel.

At GigaOM we’ve chronicled the development of this new era in our day-to-day writing and we’ll highlight these trends this week at our 5th Structure 2012 show on June 20 and 21 in San Francisco. Most importantly, we celebrate the people who are orchestrating this change — those who are building systems to enable and take advantage of it. Like any big shift that occurs over years, there are hundreds of influencers who will play a role, but we’ve chosen these ten who are instrumental in driving the vision. And now let’s meet them:

The Engineer
Martin Casado, CTO and Co-founder of Nicira

The Customer
Debra Chrapathy, CIO, Zynga

The Sheriff
Simon Crosby, CTO and Founder of Bromium

The Wildcard
Barry Evans, CEO of Calxeda

The Disruptor
Frank Frankovsky, VP Facebook

The Developer
Tom Preston-Werner, Co-founder, Github

The Researcher
Jonathan Koomey, Consulting Professor Stanford

The Superhero
Rob Roy, CEO and Founder of Switch

The Regulator
Steve VanRoekel, US CIO

The Data Scientist
Andreas Sundquist, DNAnexus Co-founder

Images courtesy of IntelFreePress, DNAnexus, Nicira, Jonathan Koomey, U.S. government, Switch, Github, Facebook, Calxeda, Bromium, and Zynga.

Go to page 2 (of 11) on GigaOM .

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People at the Open Networking Summit

The secret is out on SDN.

I’ve been following SDN and OpenFlow almost since its earliest days. I’ve been lucky enough to know Martin Casado since before Nicira knew what it was going to build and Guido Appenzeller of Big Switch of SDN since his days at Voltage Security. I attended the first Open Networking Summit back in October, but was floored by the scale of the April event. Attendance was up over 3x, and people from all corners of the ecosystem were there. Clearly the secret is out and it’s evident that the networking industry has been starving for the next big thing.

Martin Casado, CTO and co-founder of Nicira

Whitebox networking needs a champion

In order for these types of capabilities to become available to mere mortals, a number of developments need to occur in the industry. As evidenced by the work Google needed to do to pull together its solution, a true commodity ecosystem for networking doesn’t exist yet. This fact is often glossed over by SDN proponents.

While the industry and pundits seem focused on figuring out who is going to be the VMware of networking, the commodity networking ecosystem first needs a BIOS and Linux of networking. Practically, this means a set of operating system software and routing protocols robust enough to run networks at scale. This is a tall order, but efforts from a small handle of start-ups and the Open Source Routing Project are driving things in this direction.

Taking the routing out of routers

Urs Hoelzle

This differs radically from the traditional networking model where routers each have their own “view” of the network which they communicate to their neighbors. This idea is not entirely new as the IETF has been working for a number of years on external Path Computation Elements but this has limited deployment and was generally used for off-line calculations, not programming the network dynamically.

As an ecosystem of whitebox and branded switches emerge that support OpenFlow, opportunities will emerge for a whole new class of applications built on top of the OpenFlow controller layer. Centralized path computation is just the first to emerge. Further, with documented APIs heading northbound, networking operators will finally have the freedom to build their own applications if commercial or open source offerings don’t meet their needs.

Wide Area vs Data Center Networks

Though much of the SDN focus has been on datacenter, it’s not surprising that the WAN is the first use case Google went after as Internet core and edge routers are significantly more expensive than their little brothers in the data center core. The verdict is still out on if centralized traffic engineering will be appropriate for the data center for VM-to-VM tunnels using the new wave of VXLAN/NVGRE/STT based overlays.

The web scale data center promises to be much more dynamic than the WAN, and bandwidth inside the data center is significantly cheaper. In this case it may easier to throw bandwidth at the problem by building completely non-oversubscribed infrastructures. Unfortunately this is economically infeasible at web scale using the traditional vendors.

While I believe the potential for radical change will be unlocked by the combination commodity networking hardware and SDN, we are in the early days. The networking industry moves slowly, and customers are rightly risk averse given business impact of network stability. SDN will inevitably go through the tried and true hype cycle that plagues all new technologies in this day and age. Stay the course, and the next five years in the networking industry promises to be a lot more exciting than the previous five.

Alex Benik is a principal at Battery Ventures who invests in enterprise and web infrastructure start-ups. You can find him on Twitter at @abenik

Related research and analysis from GigaOM Pro:
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• The promise of SDNs in the enterprise
• The promise of software-defined networking
• Cloud computing infrastructure: 2012 and beyond