Hewlett-Packard to acquire SDN company ConteXtream for Network Functions Virtualization
Jim Duffy / Network World :
Context & Ripple Effects
The ConteXtream deal slots into a busy 2015 for HP's networking ambitions: months earlier it began selling Linux-based open-source switches manufactured by Accton, and by October it would launch OpenSwitch, its own open-source network operating system with a developer community. Buying an SDN company for network functions virtualization gives that hardware-and-OS play a software layer aimed at carriers and enterprises virtualizing network functions.
Timing matters because the acquisition closes in on HP's confirmed split into HP Inc. and Hewlett Packard Enterprise — meaning the NFV assets land on the enterprise side of a $400-$450M separation, where they join a string of later bolt-ons like SGI and Cloud Cruiser.
First-order effects
- ConteXtream's SDN technology and team fold into HP's NFV offering, giving HP a carrier-grade virtualization story to sell alongside its Accton-built white-box switches rather than reselling commodity hardware alone.
Second-order effects
- Rivals selling proprietary networking stacks now face HP bundling open-source switching, an open NOS, and acquired SDN software into one cheaper package — pressuring them to respond on price or open up their own platforms.
Third-order effects
- The deal foreshadows HPE's post-split playbook of assembling its networking and cloud portfolio through acquisitions — a pattern that runs from ConteXtream through SGI and Cloud Cruiser to the $925M Silver Peak SD-WAN purchase five years later.
The trend: Enterprise infrastructure vendors are buying their way into software-defined networking, using open-source hardware and bolt-on software acquisitions to undercut proprietary incumbents.