Posted by: Jonathan Bloom | March 26, 2013

Software Defined Networking: The Billion-Dollar Technology Infant

SDN-Virtualization-NetworkingIf anything is certain about the technology industry, it’s that it doesn’t take long for new technologies to make an impact. One of the more recent ones to impact the industry is software defined networking (SDN), which, though still in its infancy, has already brokered billion-dollar deals.

Recently, Business Insider’s Julie Bort offered a peak at just what this “infant” has prompted a couple major players in the Tech market to spend on advancing software defined network offerings. She wrote:

A new enterprise technology called software-defined networking is still in its infancy. But it’s already created some billion-dollar success stories, capturing the imagination of Silicon Valley’s savviest investors and inventors.

Consider the $1.26 billion acquisition of Nicira by VMware last summer.

Or the $176 million acquisition of Contrail Systems by Juniper Networks last month, a mere two days after Contrail came out of stealth.

Bort goes on to predict that the SDN market is primed to skyrocket to even greater heights. She notes that IDC places its value at a “mere” $360 million this year, but predicts it will grow to $3.7 billion by 2016. To put those numbers in human perspectives that would be like a baby that weighed seven pounds at birth weighing 72 pounds when he or she was three years old—the mean weight for an 11 year old in the U.S.

There is some solid business reasoning behind this giant forecast in the SDN market. It’s virtual. To put it bluntly like David Greenfield does on the WANspeak blog (which is administered by our client, Silver Peak), “Virtualization means enormous cost savings.”

Because of its software-based nature alone, software defined networking is a huge cost savings. The need for additional hardware is removed.  And everybody knows, when it comes to a hardware upgrade it’s not just the machines that cost money. There’s also the cost for additional space, additional energy costs, installation and maintenance costs, etc., etc., etc.

As with many infants, though, Greenfield points out that SDN has some growing up to do:

We might talk about Software Defined Networks (SDNs) and OpenFlow, but there are still huge architectural bottlenecks that happen at the WAN. Applications, such as Hadoop, have tremendous sophistication, but often lack an in-depth understanding of the physical network that prevents them from factoring in the impact of the WAN.

These growing pains have not impeded germination of the SDN space – far from it. Based on the number of startups that have been spawned in the wake of SDN’s birth and the number of significant enterprises that have joined the race, few companies find these growing pains at all daunting. The question is will SDN startups like Big Switch Networks, NoviFlow and Plexxi be able to bridge the gap between virtual (i.e., software) and physical networks to achieve the efficiencies that software defined networking promises. Those that do will be proud parents of a healthy, well-adjusted network.


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