A couple of recent surveys appear to be sending mixed signals about Software-Defined Networking and Network Functions Virtualization, but the reality is that SDN and NFV are solidifying their holds on networks. That growth may be taking place largely under the surface, but the signs are there to be seen, and — like this year’s elusive Spring — they will eventually surface for all to see.
The first piece of news, from Infonetics Research’s 4th quarter 2013 Service Provider Routers and Switches report, found that revenue was down 4% from the same period a year ago. For the year, service provider router and switch revenue — including IP edge and core routers and carrier Ethernet switches (CES) — were $14.5 billion, up just 2% from 2012.
With growing data traffic, mobility, cloud, M2M, and network obsolescence, one would think carriers would be expanding their capital budgets. How else do you then explain SDN market projections of up to $3.7B by 2016 and a compound annual growth rate of 61.5% from 2012 to 2018? According to Infonetics’ Michael Howard, co-founder and principal analyst for carrier networks, SDN is leading the carrier router/switch market into a period of hesitation. “Major change is in the air as carriers of all sizes proceed cautiously with a router and switch spending, in part because they are trialing SDN (software-defined networking) or just beginning to figure out how to proceed with SDN,” he said. “The fourth quarter is usually an indicator for the current year and sometimes a bellwether for the future. In the most recent quarter (4Q13), North America had a double-digit sequential decline in carrier router/switch revenue rather than the usual budget flush, with weakness coming mostly from Verizon and AT&T, among the global leaders of SDN activities.”
The second survey, from the Linux Foundation’s OpenDaylight Project, via Gigaom Research, painted a much rosier picture, reporting that 95% of networking pros want open-source software-defined networking technologies. A total of 600 respondents — IT decision makers and technologists in medium to large organizations within enterprise (300) and service-provider (300) organizations in North America — participated in the survey, SDN, NFV, and Open Source: The Operator’s View, with the vast majority of serious network users indicating they want commercially-supported open-source technology.
More than half of the respondents intend to deploy SDN and NFV in 2014, and 97% by 2015. The primary initial target for enterprises is the wide area network (WAN), while for service providers it is the data center. Topping the list of concerns were: security (72%), network utilization (64%), network deployment and management (62%), and network operating expense (61%).
According to Sarwar Raza, chairperson of the Northbound Interfaces (NBI) Working Group of the Open Networking Foundation (ONF), “No one really questions the WHAT or WHY, just the WHEN, with respect to (SDN/NFV) adoption.” They are real technology ‘game-changers’, he said. “The economics are compelling, and the technology is catching up. And, NFV orchestrated using SDN principles is just… logical.”
Raza, whose day job is Director of Cloud Networking and SDN in the Advanced Technology Group within HP’s Networking organization, said that every year the industry convenes to see incremental, measurable progress towards the promised land of SDN. “This is a journey, a transformational experience that we will look back upon years from now as a seismic shift for our industry… [But] we’re making great progress, by any measure.”