Pssst. IBM has quietly walked away from the software-defined networking business (exclusive)

IBM has silently taken steps out of the nascent market for software-defined networking (SDN), which at one point showed the potential to shake up big networking vendors like Cisco and Juniper, VentureBeat has learned.

Some large tech companies have moved quickly to sell software to let admins easily manage their corporate networks, prioritize applications, and build new types of network services following waves of SDN hype in the past few years. But IBM’s moves in the past year suggest the company no longer thinks it should throw networking experts at the challenge of developing new SDN software, according to one person familiar with IBM’s SDN work.

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Scott Raynovich’s SDN Revolution: An Ecosystem Report is currently available on VB Intel.

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IBM did not immediately respond to VentureBeat’s request for comment for this story.

IBM was a founding member of the OpenDaylight, a Linux Foundation project for devising open-source software-defined networking code. The company clearly saw promise in creating — and surely selling — technology for easily controlling complex networks and building new networking tools with software that sits on servers, not expensive networking hardware.

“IBM is working with customers and others to design, build, and support the new era of computing — an era driven by unprecedented data growth and the wide scale adoption of such game-changing technologies as cloud, mobile, social, and big data analytics,” IBM system storage and networking executive Dr. Ambuj Goyal said in a canned statement for OpenDaylight’s debut. “A key aspect of this new paradigm is the software-defined environment that brings much needed intelligence to the network.”

That was in April 2013. Then came IBM’s acquisition of public cloud provider SoftLayer, which reportedly cost around $2 billion. It’s been touted as a significant step in IBM’s quest to compete against public cloud market leader Amazon Web Services.

But unlike some top public cloud providers, SoftLayer’s people apparently weren’t too keen on baking in next-generation networking technologies to the SoftLayer infrastructure.

“It was an uphill battle” for IBM’s SDN team to work with SoftLayer, our source said.

Then, in January, IBM sold to Lenovo its low-end server business and other hardware lines for $2.3 billion. The sale included certain networking equipment as well as conventional networking software to run on that gear.

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But the SDN software, which is designed to run on servers, didn’t go to Lenovo with everything else. Indeed, Re/code reported that IBM was looking to sell its SDN business.

What ended up happening is that technology got folded in to IBM’s nebulous but strategically important cloud division, our source said. Suddenly, the SDN team was no longer mandated to think up ways to strengthen software for companies that run data centers — and thus compete in the hot SDN market — but instead to enhance IBM cloud products, the source said.

“It was pretty much decided that we will not be selling SDN products,” the source told VentureBeat. “So in a sense, you could say IBM is out of the network market again.”

Meanwhile other companies like Cisco and Dell keep doing business in SDN, pairing software with hardware.

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IBM, for its part, still offers a few flavors of SDN software, namely for VMware environments and for the KVM open-source hypervisor, but its hardware lineup is leaner now, following the Lenovo deal. It’s also pulled back its involvement in the OpenDaylight project, our source said.

Initiatives involving Watson seem to have taken up more of Big Blue’s attention in recent months. Perhaps SDN lacked the profitability potential the company needs in its quest to hit its stated $20 earnings per share goal. So other software it is.