SDN: The King Is Dead, Long Live The King!

CrownAt the dawn of the modern IT era, when business people first got to use things like personal computers and spreadsheets, Intel quickly became the 800-pound gorilla of the microprocessor market. The chip maker,  founded in 1968 by Gordon Moore (of Moore’s Law fame) and Robert Noyce, grew along with the PC and then server markets, raking in $53.3 billion last year. However, now that the PC business has tanked, and commodity hardware and the x86 server platform are faced with the rise of the software-defined everything, Intel appears to be looking at OpenFlow and SDN as more than just the latest reasons to buy servers based on its CPUs.

A few weeks ago Intel announced it had completed the acquisitions of Aepona, a Belfast, Ireland-based industry leader in API exposure and monetization platforms for service providers, and San Francisco-based Mashery, a provider of a world-class technology solution for API management and monetization. To be integrated into Intel’s Services Division, these services allow Independent Software Vendors (ISVs), network providers, enterprises and OEMs to securely grant access to their network resources while achieving monetization opportunities by adding new services.

At the Open Networking Summit in April the chip king announced  its Open Network Platform Switch and Open Network Platform Server reference designs, and Data Plane Development Kit Accelerated Open vSwitch. These reference architectures, aimed for the telecommunications, cloud data center, and enterprise data center infrastructure market segments, combine open standards for SDN and NFV with Intel hardware and software. “SDN and NFV are critical elements of Intel’s vision to transform the expensive, complex networks of today to a virtualized, programmable, standards-based architecture running commercial off-the-shelf hardware,” said Rose Schooler, vice president of Intel Architecture Group and general manager of Intel’s Communications and Storage Infrastructure Group.

Commenting on Intel’s Open Networking Summit news, 451 Research analyst Peter Christy called them great additions to the OpenFlow efforts, as well as a clear demonstration of the strength of Intel’s various communications offerings. “If and when the economic advantage moves from proprietary silicon to merchant vendor parts, Intel is well positioned to be a market leader.”

He added that that same economic inflection point will test the hypothesis that network device buyers just can’t wait to move to lower-priced, less-feature-rich switches. “Independently of that, we expect an ongoing transfer of network value from devices to software, most of which will execute on Intel X86 architecture virtualized servers, with Intel CPUs getting most of the business.”

New data from TechNavio predicts the global SDN market will grow at a CAGR of 151.12% over the period 2012-2016. While it identifies the dominant players as Cisco, Hewlett-Packard, IBM, and NEC, Intel apparently wants to make sure it gets more than its fair share.

However, before Intel is publicly acclaimed as the new king of SDN, analyst Zeus Kerravala advises a little caution. In theory, Intel’s push into an already highly competitive SDN space makes sense, but theory and reality are two different things, and he doesn’t believe a pure, white box switch really works in this market.

“In my opinion, chips are commoditizing and vendors are looking to differentiate more with software. However, if both software and hardware are provided by the same chip vendor, then the ODM is just a manufacturer and distributor. In this case, what is the difference to Cisco, Juniper and other traditional network vendors? At the end of the day, users want to have the best price performance for a network solution. The winning chip in the hardware may not necessarily have the best technical performance. It will be the chip vendor who knows how to work with independent software vendors.”

Kerravala recommends network managers interested in moving to SDN look at startups like Pica8, Plexxi and Pluribus who are leveraging the white box switches to provide a solution that includes strong service and support around the operating system. They don’t just sell switches but understand the challenges of SDNs and are set up to sell and then support their customers, he said.

I believe rumors of the death of PCs are just foolish, and while x86 server sales remain strong, dressing them up for SDN should continue to keep Intel’s shareholders happy for years to come. Everything else the chip maker is doing in networking could just be the icing on its cake.