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Researchers Put Software-Defined Networking Growth into Context

Industry watchers are predicting that software-defined networking (SDN) will be one of the most disruptive new technologies for the next several years.

Though the technology is still in its early stages, research firms are already hocking surveys, studies and reports -- many of them costing up to thousands of dollars -- that purport to offer valuable, exclusive information to paying customers. These reports aren't usually available for perusal by the general public, but the firms sometimes tease the reports with interesting tidbits of information. Taken together, they can provide a snapshot of the SDN industry and where it's heading.

Where it's heading is up, of course. Following are some recent predictions and analyses about the SDN market.

For starters, few industry experts seem to agree on much about SDN -- including what it is and why it's needed. As CIMI Corp. analyst Tom Nolle reported: "SDN is going to be important, but just as the choice between concrete and asphalt probably doesn't matter to most drivers, SDN or legacy probably won't matter much to users of applications until we understand just what SDN can do better than we do today."

A MarketsandMarkets report released this month stated, "The global SDN market by revenues is estimated to grow from $290 million in 2014 to $3,670 million by 2019. This represents a CAGR of 66.1 percent from 2014 to 2019. The SDN market is set to witness a year-over-year growth from 59.66 percent from 2014 to 2015 and is expected to reach 76.10 percent between 2018 and 2019."

Research and Markets reported in October 2013 that the SDN, network functions virtualization (NFV) and network virtualization markets are expected to total nearly $4 billion in 2014, with a CAGR of nearly 60 percent over the following six years. Other findings in the report include:

  • Although network virtualization in the enterprise IT and datacenter domain has received significant attention in the past years, service provider network virtualization is still at a nascent stage.

  • SDN and NFV empower a multitude of network functions to be implemented cost-effectively in software, ranging from standard mobile IP Multimedia System (IMS) services to features such as Deep Packet Inspection (DPI).

  • By 2017, the firm expects to see significant price and gross margin erosion for traditional hardware-based network switching equipment driven by alternative software-based solutions.

  • By 2020, the firm predicts SDN and NFV will enable service providers (both wireline and wireless) to save up to $32 billion in annual [capital expenditures] investments.
Infonetics last week released a report wherein operators "were interviewed to determine the timing and priority of the many use cases for their SDN and NFV projects." Some of the highlights include:
  • Twenty-nine percent of survey participants are currently implementing SDNs, and 52 percent plan to evaluate SDNs by the end of 2014. Nearly every operator Infonetics surveyed plans to deploy SDN (97 percent) or NFV (93 percent) in some aspect of their network at some point.

  • Survey respondents rated business vE-CPE (using NFV for the delivery of services to businesses/enterprises) the No. 1 use case overall for NFV in 2014–2015; business vE-CPE is also ranked the top use case for revenue generation.

  • Meanwhile, back office [operational support systems/business support systems] was cited as the biggest barrier to deploying NFV by respondents.

  • Telecom and datacenter equipment vendors are well-positioned to take considerable market share in SDN/NFV, with virtually all respondents stating they are likely to buy from the major vendors.

  • As carriers expect to eventually reduce spending on telecom hardware and software, a good way for vendors to increase revenue is by beefing up integration services to meet customers' needs and expectations.

Gigaom Research surveyed 600 operators about SDN and NFV deployments. Some of the key findings in the December 2013 report include:

  • SDN and NFV deployment timelines are extremely aggressive. While these timelines will certainly move out as real-world pressures (financial, technical, and organizational) force delays, these results indicate the high level of hope for SDN and NFV solutions.

  • Security continues to be a major challenge in networking. While SDN stands to solve many problems, improvements to the security posture of the world’s networks remains a primary driver across all networking advancements, including SDN and NFV. After security, key drivers include improved network service levels and lower operating and capital costs.

  • While much is made of the potential for SDN and NFV to optimize network spending, utilization, and service levels, near-term improvements in network operations are the primary focus for operators looking to deploy SDN and NFV solutions and take advantage of open source within their SDN and NFV environments.
Packet Design surveyed more than 200 American and European service providers about SDN plans, business drivers and concerns, and then contrasted the two geographic regions. Some highlights of the April 2014 report include:
  • More than 90 percent of the 200-plus survey respondents are exploring SDN in some way. However, only 8 percent of EU-based respondents said they currently have some production deployment compared to 20 percent of the U.S. survey respondents.

  • Both geographies indicated the same SDN business drivers: support new services, increase business agility, and improve productivity. Europe is more concerned about reducing expenditures: More than one-third of European respondents said reducing operational (19 percent) or capital (13 percent) expenditures is the top business reason for investigating SDN. In the United States, it is 13 percent and 4 percent, respectively.

  • Service providers on both continents agreed that complexity is their No. 1 concern about SDN (Europe: 46 percent; United States: 57 percent). They also agreed on other top concerns: vendor lock-in (25 percent average), cost to implement (25 percent average), and lack of management visibility (22 percent average). An average of 11 percent said SDN is not worth the effort and cost. (Respondents were able to list more than one concern.)

  • Europeans are even more concerned than their U.S. counterparts that some of their existing management tools will not work with SDN (85 percent versus 71 percent in the United States). Most also agree that SDN creates new management challenges that require new tools (average of 83 percent). About one-third of the 200-plus surveyed are depending on their network equipment vendors to supply the SDN management tools they need.

Heavy Reading conducted a November 2013 report that concluded: "The amount of money that has been invested in SDN won't matter in the long term if the networks fail to surpass the standards already set by existing network buildouts. Toward that end, leading suppliers of test and measurement products are pushing hard to develop robust SDN testing tools."

Sharing one survey result, the company revealed the top drivers for testing of SDN networking from 2013 through 2015:
  • Address complex network behavior.
  • Optimize performance.
  • Foster interoperability with other vendors/operators.
  • Leverage a richer set of capabilities.
  • Extend to functions that incorporate IPv6, MPLS and so on.

About the Author

David Ramel is the editor of Visual Studio Magazine.

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