SDN Drives The Next Wave Of Innovation

SDN will profoundly affect the network communications market, creating chances for a few startups and altering revenue streams with a shift from hardware toward software and services.

Ronald Gruia

December 2, 2013

3 Min Read
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Software-defined networking (SDN), unquestionably one of the IT hottest topics du jour, is a new architectural model designed to maximize networking efficiency, agility, and control. There are three fundamental characteristics within the SDN approach:

  • Separation of the control plane from the data plane

  • A centralized controller and view of the network

  • Programmability of the network by external applications

Since SDN detaches the control plane from switching and forwarding elements, it will make networks more programmable by abstracting network elements and exposing them to various applications. What could some of these applications be like? One use case of interest to a telecom carrier could be the ability to move application workloads efficiently from an enterprise to an operator's datacenter. For an enterprise, SDN can facilitate the hybrid cloud paradigm, allowing businesses to use public cloud services to manage peak enterprise workloads.

In addition, with the advent of big data, network data mining that collects information about real-time behavior of applications running on the network can be an SDN application of particular interest.

The adoption of SDN may be hampered by vendor inertia -- in other words, the strong installed-base skillsets from traditional network equipment vendors, which are only now ramping up their SDN portfolios. It will take time before IT staffs are trained and well versed in the new technology. However, increased pressure from the developer movement and agile application development should act as a counterweight to this market restraint.

For carriers, one big driver lies in capital expenditure and operating expense savings. Capex savings arise via the use of increasingly commoditized hardware. The control plane separation of SDN can be instrumental in delivering original equipment manufacturer switches built on merchant silicon, instead of purpose-built, proprietary appliances.

Moreover, network function virtualization efforts, geared toward decomposing networking functionality into pieces digestible by x86 servers, are well under way. From a management and orchestration standpoint, SDN provides an automated, comprehensive, and flexible configuration, which, coupled with centralized control and management, results in lower carrier opex.

[Need to learn the basics of SDN? Check out our slideshow, "7 Essentials of Software-Defined Networking."]

Discussions with large enterprises and Tier 1 service providers show that the SDN market is still in its infancy. The technology represents a generational shift in networking that will span close to a decade. However, some operators are already setting up proof-of-concept point-solution deployments. Large enterprises in segments such as finance and healthcare are also experimenting with SDN. Google is the most frequently cited example of an early adopter; it implemented SDN for its WAN via its new B4 network. The early assessment is that the point of inflection for SDN will occur in the second half of 2014 or, more realistically, in 2015.

SDN will be disruptive to the highly profitable networking industry. Networking currently is not very competitive -- compared to other IT areas, such as servers, storage, or even wireless infrastructure -- due to its vertically integrated, oligopolistic structure. The high switching costs create barriers to entry, while the distributed nature of networks spurs the need for superior interoperability, stability, and custom application-specific integrated circuits.

The flatter architecture of SDNs can improve interoperability while fragmenting the market by increasing choice at the hardware, controller, application, and orchestration levels. This will enhance competition and create opportunities for new players, and it will result in lower margins (comparable to those in the server or storage markets) for manufacturers.

Traditional network equipment vendors will have the opportunity to make up the potential margin loss due to hardware commoditization by monetizing the northbound application programming interfaces between SDN controllers and applications. They can also provide software such as network visualization tools or orchestration applications to help manage the entire network.

SDN will have a great deal of influence on the networking market and those who work with the technology. But with these changes, enterprises and carriers will gain more choice, flexibility, and network efficiency.

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