Software defined networking (SDN) is a part of the vision embraced by software defined everything (SDE), reflecting a major evolution in the way networks are designed, built, and run. While the term SDN was originally conceived as a technology to be used within data centres it has evolved to incorporate wide area networking as well. So what are software defined networks in business and what are the key themes?
In the world of software defined everything (SDE), the details of the underlying hardware become irrelevant and the focus shifts to a virtualized software layer instead. In this world, we no longer think of servers, or even central processing units (CPUs). Instead, we describe the resources that our application requires, and the environment manages the rest. Software defined networks are a part of this new world. The world of SDE brings together technologies that allow for the virtualisation of computing resources – (CPUs), memory, storage, connectivity, and network resources, in a way that completely separates the underlying hardware from the software that controls it.
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Why do software defined networks matter for business?
One of the key drivers in this space is a battle royal between the software tribe (developers and cloud providers) and the hardware tribe (network equipment vendors and telecom providers). While the more agile members of the hardware tribe will see growth, the ultimate control of a software defined world will – predictably – lie in the hands of the software tribe.
Networking used to be the sole domain of telecoms companies and network equipment providers, but a new class of player has now entered the market: cloud providers. Not only do cloud providers account for a growing percentage of networking spend, but they are also building out their own networks that can be used in conjunction with, or as an alternative to, the networks provided by telecommunications companies.
Cloud providers are in an enormously powerful position as they represent the software tribe who are leading the charge towards a world in which everything is defined, managed, and controlled via software. Meanwhile, at the other end of the chain, the network equipment and technology vendors live closer to the hardware. Sitting in the middle are the communications service providers who are pushing hard to remain relevant and differentiated in the face of pressure from above and below.
The adoption of SDN will not represent new revenue; it will effectively replace revenue that would have been allocated directly to network equipment numbers. It is also significant that the proportion of network equipment revenues that are essentially software, rather than hardware, will grow significantly over this period such that, by 2028, we expect close to half of total networking equipment revenue to be made up of software and services.
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By GlobalDataAs most of the traffic growth will be within infrastructure controlled by the major cloud providers, they will be the biggest beneficiaries of the transition to SDE, since they are the ones providing the runtime technology within which all that is software-defined will run.
By 2025, the prediction is that cloud service providers will own, or manage, more than a third of internet bandwidth globally.
What are the big themes around software defined networks?
The arrival of software defined everything
The term “software defined everything” has been in use since around 2013. Originally it seemed very ambitious, with shades of Star Trek, but it has taken surprisingly little time for the industry to begin taking tangible steps towards a world in which the physical technology is regarded simply as a logical pool of “stuff” that software ties together, configure and exploits as it needs.
Today, SDE is largely driven by developers and the cloud providers who have them in their thrall. Both groups are striving towards a future in which developers write their software, describe the services and resources it needs, then simply press a button to instruct the infrastructure to “make it so”.
Cloud providers are working to demote telecom operators to the status of “bit carriers”
Cloud providers have the advantage in SDN because they own the relationship with the most powerful people who will define the future shape of the technology industry: software developers.
While many telecom operators have tried to establish a degree of relevance with developers, few have had more than momentary success. While we don’t see catastrophe ahead for the telecom operators, they are in a tight spot between the network equipment vendors and technology suppliers who are working to automate many of the activities that telecom operators currently major in, and the cloud providers above them who ultimately own the relationship with the primary arbiters of the future technology landscape, namely the people that build the software that SDE is meant to provide a platform for.
Security
In principle, SDN should provide a means to automate the security of networking, making it safer and more reliable, but many organizations will prefer to continue to use trusted and experienced providers who have a good track record in helping them to secure their networks.
Large enterprises will continue to roll their own environments (for now)
Notwithstanding the success of the cloud providers in shaping the future of technology infrastructure, there are still many organizations that, rightly or wrongly, continue to build and operate their own infrastructure.
This segment of the market will remain attractive to communications service providers for some time, as the cloud providers focus on the segments that contain many more individual, albeit slightly smaller, opportunities.
However, over time, even large enterprises will embrace the commodification of bandwidth and connectivity and will adopt the vision of SDE in order to drive economic and agility gains.
Automation and simplification are strong drivers
Automation and simplification of businesses’ network infrastructure is a key priority. Businesses also expect the costs of running both internal and wide-area networks to fall.
This highlights an important point, which is particularly relevant in the enterprise market. While the ability to offer a “software defined” proposition should point to the benefits of simplification and automation, it isn’t necessarily the case that SDN will be simpler, so non-SDN solutions that offer a high degree of automation and are easy to adopt and use will still find willing buyers.
SDN will be a component part of a wider SDE story
The networking component of the software defined everything vision is undoubtedly an essential one, but it should be seen in conjunction with the other technology pieces that need to be brought together to achieve the holy grail of SDE. The astonishing speed with which software defined infrastructure has leapt ahead – from virtual servers, which took four decades to emerge, to slimmer containers, which took two decades, to waif-like “server-less functions” which will require well under a decade to take root – provides a strong indication that the components that these highly atomic, agile, and portable applications, or services, require in order to operate need to be highly choreographed and seamlessly integrated. Ultimately, there will be little value in SDN outside the world of software defined storage, databases, and servers.
The cost of bandwidth will continue to decline
Service providers are caught between two conflicting sets of expectations from buyers: on the one hand they want more features, particularly in the form of automation, while on the other there is a universal expectation that prices for networking will continue to fall. It is not unreasonable for providers to hope that customers will pay more for additional features, but the counter-argument from buyers is that improvements in automation bring benefits to both parties, and that the dividend should be shared.
What is the history of software defined networks?
The advent of cloud computing which saw the emergence of telecom infrastructure as a service (IaaS) offered up the promise of removing much of this complexity. In essence, cloud computing wraps up the network, server, and storage tasks, delegating these to the cloud provider and rendering them “software defined” from the perspective of the consumer. The rapid growth of cloud computing drove the early development of software defined networking, as cloud providers sought to deploy technology that would simplify and automate the management of their data centre networks.
The SDN story…how did this theme get here and where is it going?
- 1975: Signalling System 7 developed by AT&T
- 1981: AT&T Network Control Point supported improved automation of telephone networks using out of band signalling
- 2004: The Internet Engineering Task Force (IETF) proposed an interface standard named “Forwarding and Control Element Separation” (ForCES) which sought to decouple the control and forwarding functions in networks
- 2005: The term SDN is defined in an article in MIT Technology Review in April.
- 2009: OpenFlow 1.0 released – building on work done at Stanford on the Ethane project
- 2011: OpenFlow 1.1 – Made available, overseen by the Open Networking Foundation set up by a group including Deutsche Telekom, Google, Facebook, and Microsoft.
- 2012: VMware acquires Nicira for $1.3bn Google discloses that it has begun deploying OpenFlow SDN technology in its data centres
- 2013: Cisco acquires Intucell for $475m
- 2014: In February, Avaya demonstrates its Fabric Connect solution – integrating SDN with OpenStack. In September HP launched the HP SDN App Store provides, aimed at providing its partners’ platform (combined with consulting and support services) aimed at helping them market SDN solutions and applications
- 2015: Microsoft and GTT Communications complete a subsea cable linking the UK, Ireland, and Canada
- 2016: Amazon invests in the Hawaiki Submarine Cable project as one of the key “anchor customers” and Open Networking Foundation merges with the Open Networking Lab, retaining the name Open Networking Foundation
- 2017: Microsoft, Facebook, and Telxius complete the highest-capacity subsea cable to cross the Atlantic, providing up to 160 terabits of data per second
- 2018: Google announces its first private trans-Atlantic cable, with landings at Virginia Beach in the US and on the French Atlantic coast.
This article was produced in association with GlobalData Thematic research. More details here about how to access in-depth reports and detailed thematic scorecard rankings.
