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Building Virtual Empires

Large shifts are underway in data center networking, and they are all driven by virtualization

We were dining last year with the CEO of a market-leading infrastructure systems vendor, and the subject of a particular startup (that we happened to be invested in) arose. The startup plays a virtualization role in front of this CEOs systems, adding intelligence, flexibility, policy -- but also enabling the substitution of commodity systems.

In short, this CEO was scared. It was a question of owning it, or killing it, he said. “But why?” we asked politely. Could not a mutually beneficial partnership be imagined?

Answer: “No. They suck our brains out.” Presumably this is not good for the systems vendor, but it is a pattern already playing out across the IT strata. Here are some of the implications: If it can be built, it can be virtualized. And if it can be virtualized, it can be commoditized.

The point here is that large shifts are at work in the data center networking field, and these shifts are being driven on all fronts by virtualization.

As we survey the world of virtualization, we find two primary motivations for change. The first is partitioning. This is the realm of innovators such as VMware Inc., probably the single most influential startup in this whole movement, and already a disruptor of historic significance. VMware came to the fore as a champion and agent of server consolidation. Lightly used applications running on low-utilization machines could now be roped together and run on fewer systems at lower operational expense. Other, lighter-weight virtualization schemes at the application layer promise similar benefits in less general cases.

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