It seems NSX’s time has finally arrived.
The software-defined networking (SDN) platform, which also provides security benefits via microsegmentation, now stretches across on-premises data centers and into the cloud.
“NSX is becoming the secret sauce behind everything we do,” said VMware CEO Pat Gelsinger during his VMworld keynote. “Maybe what vSphere was to the first 20 years of VMware, NSX is to the next decade or two.”
IDC analyst Brad Casemore agrees with Gelsinger. “I don’t think there is hyperbole in that statement,” he said.
“NSX has become a strategic glue within this hybrid-cloud world for VMware and you can see it extending,” Casemore added. “It started out as a network function virtual overlay in the data center, then extended to become an extensible overlay between data centers and colocations, now it’s extended out to public clouds. It’s also being installed out to the edge and branch remote offices. NSX is going to be everywhere VMware goes.”
NSX Use Cases
NSX “changes the paradigm,” said Jeff Jennings, GM of VMware’s networking and security business unit, during a VMworld panel. “Not everyone gets it at first, but eventually it starts to catch on. You see the momentum build and the excitement and it starts to change to world. I do believe that NSX will be everywhere.”
The panel included three NSX customers: check printer and financial services firm Deluxe; the state of Louisiana; and the University of Nebraska Medical Center.
Brad Skeel, senior manager for enterprise cloud operations and engineering at Deluxe, said his company used NSX to build a private cloud in 2015, and plans to use VMware Cloud on AWS to migrate some workloads to AWS’ public cloud.
“That’s why we picked NSX two years ago,” Skeel said. “I knew at some point we’d get to a point in time where we would be able to extend NSX out to various clouds, with ease. It really will make it easier for us to extend our security posture, our microsegmentation, and everything else across these public clouds.”
About one-quarter of the University of Nebraska Medical Center’s network infrastructure is tied into NSX, said CIO Brian Lancaster, adding that the “goal is to get to 100 percent” as part of the hospital’s push to automate IT.
UNMC first chose NSX for microsegmentation, which enables fine-grained security policies to be assigned to data center applications, down to the workload level.
“What NSX brought to the table first was some insight tools to allows us to understand what was normal [network] activity,” Lancaster said. “We found our EPIC [Electronic Health Record System] environment had over 5 million open ports. By understanding the traffic we should have, we were able to close those ports down to a handful. When we did the ROI of potential breech and costs associated with it, that’s over a $30 million ROI for us.”
The NSX story “is still unfolding,” IDC’s Casemore said. “If you look at where they are in terms of NSX customers relative to the vSphere install base, you’re dealing with a lot less than 20 percent. It might even be less than 10 percent. There’s still a lot of growth that can occur.”
VMware doesn’t make it easy to put a number on this growth potential. The company doesn’t break out total vSphere customers.
At the end of June 2016, VMware reported 1,700 NSX customers. By August 2017, that number jumped up to 2,900. Customer numbers grew more than 50 percent year-over-year. All of VMware’s top 10 deals for its second fiscal quarter of 2018 that ended Aug. 4 included NSX.
When asked if VMware has realized the promise of NSX, Forrester Research analyst André Kindness said “definitely they have — to my surprise.”
The surprise isn’t personal. It’s because networking is complicated stuff.
“If you’re not a core networking company, networking is tough to understand,” Kindness said. “And if you end up buying it, it usually ends up withering on the side.”
Networking in the Cloud
Kindness points to a 2016 Forrester study that found 60 percent of infrastructure and operations professionals say they have a hybrid cloud strategy. “Surprisingly a virtualization company has been leading the direction on what you need for networking in the cloud,” he said.
But networking also requires physical infrastructure “and the physical and the virtual have to work together,” Kindness said. “Right now [VMware] says, ‘we play with everybody,’ but ultimately the overlay and the underlay have to work together. They’re going to have to make a bet on working with somebody.”
Another potential threat to NSX is the possibility of another vendor offering a similar solution. “There’s Nuage Networks and others that are coming along and can easily do the same thing,” Kindness said. “It’s just that VMware has been the darling of the enterprise.”