News

SDN Datacenter Disruption Pales Compared with Harmful Geopolitical Factors

• By David Ramel
• 09/16/2014

Two research firms last week shed light on the exploding market for software-defined networking (SDN) while warning that outside geopolitical forces could disrupt the enterprise datacenter far more than upstart technologies.

Economic warfare and nationalism were among several disruptive factors that could shake up the entire industry, according to Gartner Inc.

SDN, meanwhile, is just a disruptive technology that's taking the datacenter by storm.

Infonetics Research analyst Cliff Grossner, Ph.D., reported 192 percent growth in data center and enterprise SDN revenue -- including SDN-compatible Ethernet switches and controllers -- from 2012 to 2013.

"There is no longer any question about SDN playing a role in data center and enterprise networks," Grossner said in hawking the for-sale report. "The early SDN explorers -- NEC in Japan and pure-play SDN start-ups in North America -- were joined in 2013 by the majority of traditional switch vendors and server virtualization vendors offering a wide selection of SDN products."

However, just one day after last week's Infonetics announcement, research firm Gartner came out with its own tease of a for-sale report that predicts "dramatic change" in the data center market by four disruptive factors, including non-technical threats such as East vs. West economic warfare and nationalism resulting from "the Snowden effect."

Although, on the surface, the [data center] market is poised for growth, existing assumptions regarding the ongoing growth of the [data center] market are unlikely to be realized," Gartner said in a statement. "They rely heavily on the current base of traditional enterprise IT end users, and a vendor community that is more likely to support the status quo, rather than introduce risk and break the enterprise IT mold."

Western companies that have long dominated the data center infrastructure arena will suffer as China gains market share, aided by its vast resources, more respected products and strong OEM suppliers -- along with "anti-U.S. sentiment," Gartner said. China is seeing gains from its long-term national program to narrow the technological and innovation advantages long enjoyed by Western powers, aided by many subsidized technology programs.

On a broader financial front, China is also involved with a plan to reshape the West-dominated financial system, along with Brazil, Russia, India and South Africa, Gartner said. Those countries have announced a development bank and emergency fund totaling $100 billion.

"The two camps of [data center] infrastructure providers, East and West, cannot peacefully coexist in any market, given the need to protect and/or increase their influence," Gartner said. "The impact is that the market is in constant flux, as both sides try to achieve some sort of dominant constant state over the majority of the markets."

A second disruptive factor, termed the Snowden effect, will drive "severe market fragmentation," Gartner said. The term stems from increasing mistrust of U.S. government electronic spying as leaked by Edward Snowden and possible doubts about major tech companies.

"As buyers come to believe that none of the large multinational providers are trustworthy, emphasis shifts to in-country-developed technologies, and OSS [open source software] and hardware," Gartner said. "The software shift happens first to commercially supported OSS, since it is perceived as more transparent."

The other two threats were grounded on more traditional technological concerns: "highly disruptive competition" and "big cloud provider dominance."

SDN is among the potentially disruptive technologies, Gartner said. The power of that potential threat was bolstered by the Infonetics research.

"In-use for SDN Ethernet switch revenue, including branded Ethernet switches, virtual switches, and bare metal switches, grew more than tenfold in 2013 from the prior year, driven by significant increases in white-box, bare-metal switch deployments by very large cloud service providers such as Google and Amazon," Infonetics analyst Grossner said.

• Vendors are seeding the market with SDN-capable Ethernet switches in the data center and enterprise LAN.
• The leaders in the SDN market will be solidified during the next two years, as 2014 lab trials give way to live production deployments.
• Bare-metal switches are the top in-use for SDN-capable switch use case in the data center and are anticipated to account for 31 percent of total SDN-capable switch revenue by 2018.
• Infonetics forecasts the “real” market for SDN -- that is, in-use for SDN Ethernet switches and controllers -- to reach $9.5 billion in 2018.
• The adoption of SDN network virtualization overlays is expected to go mainstream by 2018.