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The race to become the premier software-defined networking supplier is nearing the turn, and two suppliers have pulled to the front of the pack: Cisco and VMware. The former has a solid lead on the latter at this point, but the two SDN market leaders are jockeying for position as they get ready to enter the homestretch.
With the emphasis on system agility increasing, enterprises are trying to move away from manual to automated data center processes. A lot of progress has been made in automating server functions where new VMs are created with a few keystrokes, but altering network configurations is still very manual, very static and very brittle.
"Companies cannot take full advantage of server virtualization features when they are weighed down making manual network changes," said Brad Casemore, research director for data center networks at IDC.
To ease deployments, vendors have been trying to decouple network configuration and management software from the underlying physical infrastructure, and offer more virtual functions. Software-defined networking (SDN) promises to deliver such changes.
The top SDN market leaders
Even though they have taken radically different approaches to delivering such functionality, Cisco and VMware have emerged as early SDN market leaders. Launched in November 2013, Cisco's Application Centric Infrastructure (ACI) SDN builds off of the vendor's traditional strengths in the network hardware market. This offering drops Cisco's Application Policy Infrastructure Controllers into enterprise networks, and relies on the company's Nexus 9000 network switches and an enhanced version of Cisco's NX-OS operating system to add SDN capabilities.
The key benefits with the Cisco system is its integration with the vendor's network equipment. Also, since the industry behemoth is the dominant network equipment supplier, numerous IT staffs have a good understanding of how its systems work, so training is minimized.
The downside with Cisco's approach is a continued reliance on one vendor's network hardware. Also, the Cisco system requires a fair amount of manual intervention to set up.
Shifting to a software focus
VMware introduced NSX in November 2013, after acquiring the technology from startup supplier Nicira for $1.26 billion. This approach, which is software-based, rather than hardware-based, offers a high degree of flexibility, because it features an abstraction layer running above all of the devices. Enterprises can add SDN to any network hardware and add services, such as authorization, firewalling or threat detection.
But there are limitations with the design, causing NSX to trail behind the SDN market leader, ACI. The flexibility makes system design and management difficult.
"The pure overlay model seems appealing, but adds a degree of complexity," noted Zeus Kerravala, principal analyst at ZK Research in Westminster, Mass. "Many companies that have looked at NSX have told me they are basically running two networks -- an overlay and an underlay. If there are any problems with the overlay, there is no way for the network administrators to see it or troubleshoot it."
In addition, the SDN has been criticized for lacking high-end availability and redundancy features -- although VMware has been trying to address such limitations; for instance, NSX 6.2 added advanced load-balancing features.
While there has been a lot of talk about SDN, the market is now in an early stage of development. The systems have been deployed largely in test mode by large technology leading-edge enterprises.
"The SDN market has been slow to take shape; companies have found them challenging to deploy," Kerravala said.
The early sales have stratified. Cisco has done well with its traditional network techies, and VMware has had success with server techies who have taken over the networking reigns, according to Casemore.
Analysts expect the two groups to meld -- and clash -- more as the market matures. The movement toward the software-defined data center is breaking down traditional dividing lines among server, storage and networking products, and support teams. Corporate cultures evolve slower than technology, so many enterprises are struggling to get everyone on board with the new system design. Eventually, businesses will get everyone on the same page.
This eventual change is one reason why the SDN market has explosive growth. IDC expects revenue to rise at compound annual growth rate of 53.9% from 2014 to 2020, and reach $12.5 billion in 2020. With the market in such a nascent state and the expectation of high growth, changes could occur on the supplier pyramid.
Being one of the top -- ideally, the top -- SDN market leaders is vital to VMware. The company's core server virtualization business has grown long in the tooth, and revenue rises have been slowing. Consequently, the vendor is banking on NSX licensing revenues to pick up the slack. The early results have been promising: NSX bookings tripled from 2014 to 2015, and the vendor now has 1,200 paying customers.
NSX has some potentially alluring features, as the market solidifies. To date, SDN has focused on network connections inside one data center. As businesses move to the cloud, they will need to connect their private cloud data center to public cloud services. Linking a logical network that supports VMs in one data center, say a private cloud, to another network -- for instance, a public cloud -- running in a second data center so they appear to be one cohesive network will become a very important feature. NSX has a good story to tell there.
Whether that story will be strong enough to capture businesses' attention is unclear, but the potential is there. VMware's NSX has jumped to the front of the pack of SDN market leaders, but will need to continue to evolve in order to remain in that position or catch Cisco before the SDN race reaches the finish line.
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