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Software Defined Networking Market Implications

Jan 30, 2014 by Rob Newby

As part of a series of blogs concentrating on the market of Software-defined infrastructures such as SDN (Software Defined Networking) or SDCI, I am currently looking into SDN, and the implications that it is will have for the network market in general over the coming months. It helps to understand the context of SDN, a little bit about how it works, and how that shapes the market.

In traditional networking equipment, the management plane manages the control plane which directs traffic in the data plane. Software Defined Networking (SDN) aims to provide more control without physical access to data by removing the control plane from network hardware and implementing it in software. This makes network administration much more flexible and dynamic because simple and standardized APIs can be used to manipulate the control layer, giving software control over network flow without having to configure at the data plane level, risking network disruptions or mismatching of traffic priorities.

This starts to address many of the challenges of large, complex, distributed networks. When large networks merge or move, there can be a number of issues around identity and policy management. Where users move between networks, identities have to follow, and policies must be merged and updated quickly. Being able to control at the software layer removes the burden of configuration from lower level engineering teams, and gives more control at the layer which is interacting with the identity provisioning system. This is far easier to tie into policy than relying on flow-down between documents from policy to process to individual device configuration.

As this removes the difficulties in configuration, it is often called the “Cisco-killer” as it means that commodity hardware can be used for the same purpose as high end kit. It is cheaper to build standard control planes, which means that you only need specialized data planes which are less intelligent and easier to commoditize. It is no coincidence that Cisco have reduced their revenue expectations for the coming year as noted in PCWorld last month.

It has been argued that SDN can create inefficiencies due to ignoring the physical characteristics/differences in underlying hardware. Unless the software is clever enough to recognise the processing power and throughput capabilities of all hardware it runs on at all times, this may prove to be a problem. If this is true, the natural place for SDN to give control without being affected by heterogeneous hardware issues is within virtual networking environments.

Network Function Virtualisation (NFV), as the name suggests, is the building of network functions within virtual environments. The virtualised platform that supports provisioning machines into individual virtual network functions (VNFs) can also support programming virtualised devices, giving us SDN in a fully virtual environment. These virtual networks can be controlled and normalised within a flexible software environment rather than fixed hardware of unknown/differing capacity.

This further complicates things for Cisco, and it is perhaps not surprising to see reports that their relationship with VMWare is becoming a little fraught. This is set to worsen as SDN becomes commercialized, particularly in the hard-won Enterprise space.

Cisco’s business is still primarily based on selling a proprietary integrated solution for the control layer, where they have created lock-in. If this changes, then they either have to sell more standard data-plane-only kit (complete with lower margins and much more competition) and/or compete with SDN vendors within that business again with more competition, but less lock-in.

Cisco’s strategy to conserve the existing market is to participate in the Open Network Environment (ONE) initiative. While this opens a path to SDN for existing customers, the question remains why new investments should rely on Cisco’s legacy technology instead of moving to cheaper, leaner SDN-focused hardware.

Next week I will be exploring the Security implications for SDN and looking at a few vendors who have moved into this space recently.

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Rob Newby
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