Computer networking is on the verge of some monumental change. Its called Software Defined Networking, or SDN and its heralded to be the next optimization battleground in virtual environments. SDN is all about moving much of the "intelligence" of networks into software rather than hardware, which will still be needed - but less expensive commodity boxes can do the job. Software Defined Networking promises to make networks cheaper to build, faster to configure and more efficient to operate.
Computer room server technology has undergone significant improvements over the past 10 years, but the routers and switches responsible for moving the data around have remained largely the same. With SDN, the data switching control functions that are traditionally embodied within proprietary software thats embedded in multiple vendors switching hardware, will now be consolidated and managed by a single central program, running on an inexpensive server.
This phenomenon is similar to what happened a few years back, when companies like VMware began offering virtualization software that made it possible to run more than one program on a single server system. IT departments were able to set up programs with a few mouse clicks instead of taking days or weeks to install servers & software. Now that virtualization has streamlined the data center, networking has become the bottleneck. IT staff still have to manually configure networks so the data can be shared securely; and this, until SDN came along, was a manual, cumbersome and time-consuming process.
For this year, IDC pegs the market for SDN at only $50M, but according to various analyst projections its expected to jump to $14B - $17B in revenue by 2016.
Lets take a look at some recent market activity. In late July VMware snapped up the 100-employee SDN pioneering-startup Nicira for nearly $1.3B. And right on the heels of VMwares acquisition, Oracle announced its own SDN play - agreeing to purchase Xsigo (for an undisclosed amount) to help extend its push into the datacenter. And all the industry big-guns are getting on board:
1. Two weeks ago at VMworld 2012 in Europe, F5 Networks, a leader in Application Delivery Networking, announced support for VXLAN functionality, which will enable organizations to seamlessly support SDN initiatives by combining VMware and F5 solutions.
2. Three weeks ago at Interop NY, HP announced a broad set of SDN technologies embodied within an open-standards-based architecture intended to automate the network from end-to-end spanning all 3 critical layers: infrastructure, control software and applications.
3. In late August, Microsoft announced that SDN capabilities will be powered by Windows Server 2012 in concert with System Center 2012 Service Pack 1
4. Rackspace Hosting, whove been testing SDN for the past 2 years, in August began rolling it out to about a third of their 180,000 customers siting radical improvements in configuration adaptability. Theyre deploying the SDN solution from Nicira.
5. And last April Google executive, Urs Holzle disclosed that the search giant spent the last 2 years redesigning the network that connects its data centers - so that its entirely SDN. Holzle says the move saves money and makes the network easier to test and manage.
6. Finally, entrenched players like Cisco and Juniper, with a vested interest in the $37B data networking market and the healthy margins associated with the status quo - are also embracing the technology. Cisco put $100M into an SDN startup called Insieme, with rights to buy - for up to $750M. And Juniper has plans to roll out its first SDN products within a year.
Who to watch in this rapidly emerging space? SDN is fueling a whole new crop of startups including Big Switch Networks, Midokura, Embrane, Contrail Systems, and others. Keep an eye on Big Switch Networks like Nicira, its another spinout from the Stanford University research lab. Theyre currently positioning themselves as a platform play for the SDN ecosystem, promoting open industry standards and a breadth of SDN-accelerated applications.
Likely suitors for BigSwitch and other newly minted SDN players? Possibly Citrix, also IBM (who has a partnership with BigSwitch as well as its own evolving SDN strategy), Intel and, of course, the usual suspects: Cisco (an unsuccessful contender for Nicira), Juniper, HP, Dell (possibly seeking to augments its Force10 Networks acquisition made last year), Lucent and Arista Networks. As you can see, SDN is rapidly becoming a congested race - even in the starting gate.
In summary, Software Defined Networking represents a quantum leap for the datacenter - enabling us to connect, aggregate and configure computing resources in unprecedented ways. But of potentially greater impact will be the opportunities for software companies to springboard from this new platform and address other elements of network visibility such as analytics, big data and a host of SDN-proficient applications that leverage the newly consolidated power of the SDN control plane, extending new dimensions of capability, configurability and speed. It may be that developers of SDN-savvy applications will comprise the next wave of acquisitions in this rapidly emerging space.
The continued virtualization of the datacenter represents an open-ended environment for software innovation, and we look forward to keeping you up to date as these exciting developments continue.