I’m all for having discussions on the impact of SDN. I’d prefer they have some substance, though, and we have a couple of examples this morning of SDN-impact stories that don’t (in my mind at least) hold much water.
FRB downgraded both Cisco and Juniper yesterday, citing among other factors the view that SDN was going to reduce the switch/router ports deployed by operators by 40% in 18-36 months. To me this is a particularly astonishing vision, given that I just finished (and published in our Netwatcher journal) our detailed analysis of SDN and NFV market impacts, and found nothing whatsoever to support any claim of port reductions due to SDN deployment in that period.
Look around your network plant, buyers, and tell me how many SDN ports you see? The current number is statistically insignificant. Look on the inventories of vendor products supporting SDN today, and tell me how many are not switches and routers. The number is statistically insignificant. Right now, if you want to do SDN in either its central (OpenFlow) or distributed form, you do it by running SDN software on the same switches and routers that Cisco and Juniper and others have been selling all along. There are no current contenders to “replace” switch/router ports with SDN ports because you can’t do SDN without the same darn ports!
This isn’t to say that there aren’t reasons to downgrade Cisco or Juniper. I talked about a previous Juniper downgrade in yesterday’s blog. There is in fact a change taking place in network infrastructure spending, but that change isn’t technology-driven, it’s profit-driven. Operators are going to spend on the parts of their network that generate the most ROI, and there is very little profit to be made by global, uniform, open connectivity. Most revenue, as I’ve said, is derived from services that move traffic for 40 miles or less, and nearly all the incremental revenue fits that pattern. Clearly building traditional edge-core router networks isn’t fitting the profit bill, so less will be built. But offering SDN technology, even if had some impact on network costs, isn’t likely to change the profit reality. Will we stop caching content because of SDN? Hardly. Will we build one big cloud data center in Missouri to serve the whole US just because we could use SDN to get to it? In the end, SDN is a somewhat cheaper and more controlled way of moving traffic, but it’s not moving it faster than light and at a negative cost.
That gets to a second story, which is one in Light Reading asking whether SDN isn’t going to hurt operators because it creates all this bandwidth on demand, encouraging enterprises to replace their persistent-capacity services with rent-a-bit services. First, nobody says that SDN is going to offer bandwidth on demand any more than other technology options we already have. We can deliver elastic bandwidth with Ethernet and IP. Second, nobody says that having elastic bandwidth is going to reduce consumption of bits or produce lower costs. Generally, enterprises say they’d use elastic bandwidth in applications like failover of data center assets into a public cloud. That sounds like a new application to me, one that generates new revenue not kills off old revenue.
In the real network, the network that ROI builds, the network Cisco and Juniper have to really face, it’s not SDN that’s the driver, it’s NFV. NFV addresses something that is very real, the displacement of service functionality from specialized devices to cheap commodity servers. If you were to look at how centralized, software-controlled, SDN could be implemented, the answer is likely to come out of NFV. Your future security offerings are NFV offerings, and so are the CDNs that deliver your content and the components that support your mobile roaming and your mobile payments. NFV defines the partnership between IT and the network. The network of today isn’t about communication but about service delivery, and NFV defines the hosting of service components.
Well, maybe it does. NFV is just getting started, and its treading a path that other bodies have tried to blaze in the past without success. I’ve personally worked on standards aimed at creating a partnership of hosted elements and connectivity for five years now. We still don’t have them. So now you understand why I think it’s so silly to be thinking about 40% penetration of SDN ports in 3 years or the erosion of business service revenues by bandwidth on demand. We’re still tangled up in the starting gates of most of the value initiatives in networking. The guys who ought to be downgraded are the companies who are doing nothing to break out, and we’ll know who they are by this fall. We’ll also likely know who will win. Why? Because 2014 and 2015 are the two years my model says that carrier capex will increase and where opportunity factors will start to drive a new network model. That means the planning cycle this fall, the cycle every vendor had better be ready for, may be doing vendor triage.
