Large Enterprises Turning to Established Vendors for SDN, Survey Finds

By Jeffrey Burt  |  Posted 2016-02-14 Print this article Print
network virtualization

The first few weeks of 2016 have brought good news for network virtualization vendors both large and small. Talking about the company's most recent quarterly financial numbers, Cisco CEO Chuck Robbins said that since introducing its Application Centric Infrastructure (ACI) technology two years ago, the business has built a $2 billion run rate and grew 100 percent over the past quarter.

"We are defining the next generation of networking, beginning with the data center with our ACI platform providing the automation and programmability for our customers' most critical business applications, with the scale, speed and security they require," Robbins said during a conference call about the quarterly earnings numbers.

Meanwhile, VMware CEO Pat Gelsinger said that the company's NSX business grew 100 percent year-over-year, with an annual run rate of more than $600 million. That number was at $200 million this time last year. Nine of VMware's top 10 deals involved NSX, and another six of the 10 involved VMware's vSAN offering.

Later this year, the company will roll out a new NSX offering that "will enable customers to create secure and encrypted overlay networks across public clouds, including AWS [Amazon Web Services] and [Microsoft] Azure and on-premise data centers," Gelsinger said during a conference call. "This new service will provide unparalleled connectivity, security and visibility across multi-cloud IT resources, regardless of whether the underlying infrastructure is VMware- based or not."

VMware is offering the new service in limited trials on top of AWS, he said.

Smaller vendors also are off to a good start in 2016. In January, Big Switch Networks received $48.5 million in funding from investment firms, while Cumulus Networks got a reported $35 million. Plexxi also received an unannounced amount of funding from GV, formerly known as Google Ventures.

IDC analysts this month said they expect the SDN market—including physical infrastructure, virtualization and control software, applications and professional services—to grow 53.9 percent annually, reaching $12.5 billion by 2020.

"While networking hardware will continue to hold a prominent place in network infrastructure, SDN is indicative of a long-term value migration from hardware to software in the networking industry," Brad Casemore, director of research for data center networking at IDC, said in a statement. "For vendors, this will portend a shift to software- and service-based business models, and for enterprise customers, it will mean a move toward a more collaborative approach to IT and a more business-oriented understanding of how the network enables application delivery."



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