Dell'Oro: SDN Market To Grow More Than Sixfold Through 2017


The software-defined networking (SDN) market may still be in its infancy, but it's starting to grow up -- and quickly, according to new research from industry analyst Dell'Oro Group.

In its new Data Center Disruptors Advanced Research Report, Dell'Oro said it expects the SDN market to grow more than sixfold over the next five years, with the majority of that market growth coming from Ethernet switches and network security appliances.

Dell'Oro Group also said it expects data center market share to become "incredibly important" to networking vendors over the next five years, given that "almost all" revenue growth in the Ethernet switching market will come from data center products.

[Related: Juniper Evolves Data Center Strategy With New MetaFabric Architecture, Switch Series]

"Vendors will have to fight each other for ever-fewer, although larger, deals," said Alan Weckel, vice president at Dell’Oro Group, in a statement.

Many networking vendors are already battling over data center share today, Weckel said, as they recognize the importance of doing so to secure a leadership position in the SDN space.

"Almost every major Ethernet switch vendor with exposure in the data center is announcing significant new products over the next several weeks," Weckel said. "To put perspective on the order of magnitude of the data center equipment market, in 2013 sales will exceed $100 [billion], split among servers, storage, Ethernet switches and data center appliances, etc. We predict a wide variety of manufacturers will engage in a battle for the supremacy of data center spending and control."

One of the vendors prepping a major SDN and data center announcement is Cisco, which confirmed plans to unveil Insieme Networks, its SDN-focused spin-in on Nov. 6.

Insieme's SDN strategy revolves around what it calls an application-centric infrastructure, or a next-generation architecture for data center networks meant to make those networks more programmable, automated and equipped to handle the new wave of applications emerging from trends like big data and the Internet of Things.

Cisco sees Insieme's application-centric infrastructure as a step beyond most of the SDN technologies on the market today, particularly those that work by running a separate, software-based overlay on top of existing network infrastructures.

Some industry experts view SDN as a threat to traditional networking vendors like Cisco, because it reduces customers' reliance on proprietary networking hardware, such as routers and switches.

Kent MacDonald, vice president of Converged Infrastructure at solution provider and Cisco Gold Partner Long View Systems, said he is confident in Cisco's emerging SDN strategy, and thinks the upcoming Insieme launch will bring a sense of validity to the SDN market as a whole.

"The world has somewhat been waiting for Cisco's response. Anytime you talk about networking, the world thinks Cisco," MacDonald told CRN. "Until this point, people have been [saying], 'What is [SDN] and how will it help me?' I think Cisco will bring a lot of legitimacy to this market."

Like Dell'Oro Group, analysts including IDC and MarketsandMarkets have been bullish on their SDN projections. IDC, for its part, expects the SDN market to reach $2.7 billion by 2016, while MarketandMarkets recently estimated the SDN market to grow from $198 million in 2012 to $2.1 billion in 2017.

PUBLISHED NOV. 1, 2013