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Enterprise SDN revenue predicted to grow 72% through to 2020

23 Nov 2016
00:00
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Software-defined networking (SDN) is approaching adoption by an early majority of enterprises and will compose nearly 40% of global enterprise network infrastructure revenue (roughly $12.7 billion) by 2020, according to a report released by TBR.

According to TBR, the revenue displacement will be incremental rather than exponential during this time as SDN solutions largely coexist with legacy technologies; however, the ongoing virtualization of network functions is disrupting long-standing go-to-market and innovation models.

“Today’s business environment is characterized by globally distributed pools of information and workers as well as the need for real-time responsiveness,” said Krista Macomber, TBR data center senior analyst.

“Network managers face new security threats and increasingly demanding traffic requirements that traditional architectures struggle to address.”

Enterprises are beginning to deploy SDN technologies for the increased automation, centralization and programmability required to effectively serve the modern workload ecosystem.

Early SDN adopters are beginning to realize benefits such as enhanced network monitoring and more agile IT service delivery, encouraging a transition from trial to production usage.

However, several key barriers, including comparative nascence of solutions and standards bodies, internal change management, and the lack of a broadly messaged and clearly defined business use case remain to be overcome before the architecture becomes mainstream.

Technological maturity — as exemplified by the Open Networking Foundation’s plans to merge with On.Lab — lays the foundation for further adoption, which TBR expects to be accelerated by go-to-market evolutions from vendors.

“SDN promises to introduce much-needed agility into customers’ environments. However, for customers, getting there requires navigating a costly and complex path spanning not only technology but also business silos,” Macomber said.

“For vendors, distilling and touting early success stories will move the needle substantially in validating the usability and IT-centric value of SDN as well as the architecture’s value in better aligning IT with evolving line-of-business needs. Serving as a change agent will be key.”

As SDN deployments broaden, it becomes evident one solution does not meet all customer requirements. Many are deploying multiple SDN technologies to support core networking functions as well as adjacent, specific use cases such as micro-segmentation.

Consequently, the vendor landscape is growing increasingly cooperative as opposed to purely competitive (e.g., market leaders Cisco and VMware moving toward a more amenable relationship). TBR expects, with time, the market will consolidate among a smaller number of large, multiplatform vendors that can accommodate customer demand for more holistic networking and broader data center solutions.

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