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Is it ever too early for a Year in Review column? Didn’t think so. For this attempt, let’s take a look at the exciting trends in network virtualization (NV), as a mixture of open and proprietary technologies battle to be the cloud networking foundation of the future.
On the competitive front, we took a detailed look at the market in our “Future of Network Virtualization and SDN Controllers Report,” released in September. The market continues to grow, with a dynamic mixture of NV incumbents and startups gaining market traction.
The NV Market Continues Growing
The NV sector is already a multibillion-dollar market, with the “Big Four” – Cisco, Juniper Networks, Nuage Networks, and VMware – generating the bulk of the revenue. To get an idea of the size of the NV market, you can look at the publicly disclosed run rates announced by Cisco and VMware, which show their NV-related portfolios generating close to $3 billion in 2016.
While the Big Four are closely watched in the networking and cloud industry, what’s interesting about the NV market is that it continues to be dynamic, with openings for many startups. SDxCentral.com research shows that 20 vendors were being considered by 116 potential end users that we polled for our 2016 survey (see chart below).
This is pretty remarkable for an emerging technology market. Many tech markets tend to get reduced to two or three leaders fairly quickly – but it’s clear that many startups and incumbents are still in the mix here. Recently the resurgence of startups such as Big Switch Networks as well as incumbents such as Huawei and HPE has been noteworthy. The message here is that customers are taking a look at a wide swath of solutions as they pick their NV and SDN strategies.
NV Trends in Benefits for Customers
So what are potential customers looking for? In 2016 our research continued to indicate that the prime needs are management flexibility, opex savings, and capex savings. Some secondary benefits include programmability, monitoring, and security functionality.
Vendors and customers alike put flexibility at the top of the list. This is the second year in a row that flexibility has been identified as NV’s biggest value in our survey, indicating that users are continuing to see NV as a technology that can help them tie their IT investments to business initiatives that go beyond cost cutting.
Capital cost savings are likewise important – chosen by 41 percent of end-users and 39 percent of technology vendors.
The Rise of Containers
One last trend I want to talk about is the rise of container and microservices technology in both NV and network functions virtualization (NFV) deployments. Container technology, though still in an early stage of development, is a method of managing distributed applications in the cloud. It represents the next phase of virtualization, and I think its influence on NV will continue to grow.
You can tell that containers are of great interest to both NV customers and vendors because of the increase in activity from providers of NV technology. For example, Cisco acquired ContainerX this year. Cisco has said that investing in containers is part of its effort to shift to selling software and services rather than traditional equipment.
Meanwhile, at VMworld in Las Vegas in August, VMware made a lot of noise about the integration between VMware and containers, including the launch of vSphere Integrated Containers (VICs), which are containers built for the vSphere environment.
But VMware’s strategy doesn’t stop there. VMware is also talking about integrating both Photon OS and its VICs with NSX for containers. Photon OS is a lightweight Linux host that VMware has built in case the customer wants to use it as the basis of a container platform.
As you can see, there are a lot of strategy shifts and technology moves still being made in the NV space. Moving into 2017, it’s going to be another exciting year as we see NV, microservices, and NFV technology evolve.