Large enterprise customers are in the early stages of trialling Software-Defined Networking (SDN) solutions to reduce network bottlenecks, and as the technological and, ultimately, business value of the SDN architecture is established, adoption will expand.
Notably, vendors will need to help customers evolve their siloed internal organisations to support IT transformation and enable SDN to flourish.
As such, Technology Business Research estimates a CAGR of 70.2 percent for global enterprise SDN revenue from 2015 to 2020 to $US12 billion, composing a substantial portion of global enterprise networking infrastructure revenue and displacing legacy technologies.
“Adoption is still fairly small and concentrated,” says Krista Macomber, Data Centre Senior Analyst, TBR.
“But 2016 will be a telling year as standards bodies, such as the Open Networking Foundation, mature and a growing number of success stories from trial deployments are cultivated. This will pave a path to accelerated customer adoption, increasingly at the expense of legacy technologies.”
Challenges ensue for hardware-centric vendors, such as Cisco, as competitors are investing in creating ways to decouple software from hardware, making white-box hardware increasingly feasible and challenging hardware-centric vendors’ revenue bases.
For Macomber, strategic alliances abound as SDN vendors seek to quickly and cost-effectively deliver complete solutions to market.
For example, SDN controller provider Big Switch Networks works closely with Dell to provide preintegrated appliances.
Consequently, TBR expects alliance activity to grow in complementary, strategic areas such as hyper-converged platforms and security.
Strategic SDN alliances will also enable vendors to expand revenue streams by addressing broader use cases - this climate of openness and coinnovation, which underscores customers’ desires for open, flexible networking solutions, will result in a diversified, competitive landscape.
“Standards bodies lay the groundwork to overcome many customer pain points, such as workload bottlenecks and lack of flexibility,” adds Stephanie Long, Data Centre Research Analyst, TBR.
“Barriers to entry, such as resistance to change and lack of knowledge about SDN, remain, however, and vendors will need to overcome these obstacles to foster widespread adoption.”