2018 Trends in Networking

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1 PREVIEW 2018 Trends in Networking DEC 2017 Jim Duffy, Senior Analyst, Networking Four events we expect in networking in 2018 include adoption of intent-based networking, further consolidation in the software-defined WAN market, acceleration of network function virtualization stabilization efforts based on the demand for virtualized services like software-defined WAN, and increased adoption of disaggregation. These portend the growing development and adoption of virtualized networking to address cloud, mobility and the Internet of Things Research, LLC

2 ABOUT 451 RESEARCH 451 Research is a preeminent information technology research and advisory company. With a core focus on technology innovation and market disruption, we provide essential insight for leaders of the digital economy. More than 100 analysts and consultants deliver that insight via syndicated research, advisory services and live events to more than 1,000 client organizations in North America, Europe and around the world. Founded in 2000 and headquartered in New York, 451 Research is a division of The 451 Group Research, LLC and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication, in whole or in part, in any form without prior written permission is forbidden. The terms of use regarding distribution, both internally and externally, shall be governed by the terms laid out in your Service Agreement with 451 Research and/or its Affiliates. The information contained herein has been obtained from sources believed to be reliable. 451 Research disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although 451 Research may discuss legal issues related to the information technology business, 451 Research does not provide legal advice or services and their research should not be construed or used as such. 451 Research shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. NEW YORK SAN FRANCISCO LONDON BOSTON 1411 Broadway Suite 3200 New York, NY P F Geary Street 9th Floor San Francisco, CA P F Paxton House Ground floor 30 Artillery Lane London, E1 7LS, UK P +44 (0) F +44 (0) Federal Street 5th Floor Boston, MA P F ABOUT THE AUTHOR JIM DUFFY SENIOR ANALYST, NETWORKING Jim Duffy is Senior Analyst for the Networking Channel at 451 Research. He covers enterprise network infrastructure and associated software, and network performance management. Jim has been covering technology for over 30 years, including 25 at Network World. His coverage focused predominantly on enterprise networking infrastructure, including routers, switches and associated software. II

3 Key Findings As speed becomes a commodity, intent-based networking will become the new point of differentiation for providers, creating new opportunities for those quick to meet the demand. The potential opportunity for software-defined WAN (SD-WAN) is much more profound than exists in the enterprise WAN alone. The automation and orchestration of virtualized services that SD-WAN offers can be applied to the broader branch office network and IT resource pool, and then perhaps to the entire enterprise network. What first standards or market adoption? That question may be answered in the telco space, where uptake of virtual services (like SD-WAN) is outpacing progress on consensus for infrastructure to spin them up. Can traction in individual virtual services speed coalescence of software-defined networking/ network functions virtualization standards? Disaggregation, long the appeal of cloud and service providers, is beginning to take hold in the enterprise, especially in retail branches where the cost and simplicity of white-box switching can be readily realized. III

4 Executive Summary INTRODUCTION Networking saw many advancements in 2017 in the enterprise campus and WAN, and in service-provider-managed services. Progress was also realized in service providers software-defined networking (SDN) deployments, while definitions and specifications on architectures for those deployments crept along at a measured pace. Intent-based networking took center stage on the enterprise campus. This is an outgrowth of policy-based networking with a closed-loop function wherein the network infrastructure continually delivers state information and analytics back to the policy controller. The controller then adapts policy definition based on changes in state, which the infrastructure enforces, thereby making the network more adaptable and responsive to business intent. This real-time feedback/response loop is an example of DevOps-style infrastructure as code programmability continuous integration of data/continuous deployment of services. Vendors, large and small, established and startup, positioned their products as facilitators of this new networking trend, which is a compelling use case for enterprise SDN and DevOps-style operations. It s designed to make network infrastructure more flexible, agile, adaptable and secure to support enterprise IT initiatives in cloud, IoT and mobility. As those initiatives ramp up, intent-based networking will become integral to the rollout of enabling infrastructure and supportive services. It will likely become the enterprise campus network du jour in 2018, and a catalyst for network upgrades and refresh cycles in 2018 and beyond. The driver of enterprise WAN upgrades is software-defined WAN (SD-WAN). As with intent-based networking, SD-WAN employs a compelling use of SDN in the enterprise WAN by making a static, rigid, 20-year-old, cloud-unfriendly architecture more nimble and agile, and easier and less expensive to operate through software. SD-WAN traction accelerated in 2017, and another, broader use case became apparent: While loosening up the WAN and chaining in virtual services such as firewalls and WAN optimization, the virtualization, orchestration and automation enablement of SD-WAN software can be applied across the branch LAN network as well. SD-WAN can usher in the cloud-managed virtual branch, orchestrating and automating the branch office through SDN in a way that dovetails and integrates with datacenter network and IT application and security policy definition and enforcement. This was one of the synergies noted by Cisco and VMware in their respective acquisitions of Viptela and VeloCloud in We expect other IT titans to take note too, and pick up the SD-WAN acquisition pace in The pace of SD-WAN acquisitions, and market traction for it and other virtual services, will quicken the pace for stability in service provider SDN/network functions virtualization (NFV). It s apparent that the market isn t waiting around for service providers to come to a consensus on NFV infrastructure, orchestration and management before diving into virtual network functions (VNFs) like SD-WAN. That said, demand will probably light a fire under service providers, NFV vendors and standardssetting organizations to come to a consensus on multiple proposals and solidify, stabilize and mature their architectures. IV

5 2018 TRENDS IN NETWORKING 451 Research s 2018 Datacenters and Critical Infrastructure Trends Source: 451 Research, 2017 Intent-Based Networking Will Become the New Enterprise Norm Consolidation Will Ramp Up, Spurred by the Expansion of SD-WAN Momentum in SD-WAN Will Accelerate Progress in SDN/NFV Disaggregation Will Gain Traction in the Enterprise and Continue To Flourish in Cloud/Service Provider Networks WINNERS Enterprises with adaptable networks that are dynamically responsive to company application, security and compliance policies; vendors that refresh their switch, router and software portfolios to address the new adaptive/responsive demands of intent-based networking; service providers that offer new managed and cloud IaaS services based on the closed-loop, intent-driven network SD-WAN startups and their investors that sell their assets at a premium to market value; vendors and service providers acquiring SD-WAN assets as the foundation of these next-generation IT opportunities; enterprises comfortable doing business with larger vendors and service/cloud providers, and that require SD-WAN and associated technologies for WAN, branch and broader IT initiatives Service providers with more choice among suppliers of NFV infrastructure and consistent operation of NFV orchestration and management; vendors and suppliers that offer base-level standards compliance (with value-added extensions for differentiation); enterprises in the market for SDN/NFV infrastructure Cloud/service providers that offer more choice among suppliers and more versatile infrastructure to accommodate scale, application and cost considerations; vendors and suppliers that address increasing demand for disaggregated hardware and software; enterprises opting for disaggregation LOSERS Vendors that continue to emphasize speeds and feeds; enterprises that cling to a current infrastructure because they are loath to fix what s not broken ; service providers that are slow to jump on the managed- and cloudservice opportunities afforded by intent-based networking SD-WAN startups that stay too niche in SD- WAN; network infrastructure vendors and service providers that fail to see the long-term opportunities in owning SD-WAN assets; enterprises that fail to see the synergies between SD-WAN and broader IT initiatives in digitization, cloud, etc. Service providers that eschew consensus and continue to drive their own implementations; vendors and suppliers that back one specific proposal from a large customer; enterprises that do not spur their service providers to action Cloud/service providers that are complacent with current suppliers of vertically integrated proprietary hardware and software; vendors and suppliers that continue to push proprietary kit; enterprises clinging to existing systems METHODOLOGY Reports such as this one represent a holistic perspective on key emerging markets in the enterprise IT space. These markets evolve quickly, though, so 451 Research offers additional services that provide critical marketplace updates. These updated reports and perspectives are presented on a daily basis via the company s core intelligence service, 451 Research Market Insight. Forward-looking M&A analysis and perspectives on strategic acquisitions and the liquidity environment for technology companies are also updated regularly via Market Insight, which is backed by the industry-leading 451 Research M&A KnowledgeBase. Emerging technologies and markets are covered in 451 Research channels including Cloud Transformation; Customer Experience & Commerce; Data Platforms & Analytics; Datacenters & Critical Infrastructure; Development, DevOps & IT Ops; Information Security; Internet of Things; Managed Services & Hosting; Mobile Telecom; Multi-Tenant Datacenters; Networking; Storage; Systems & Software Infrastructure; and Workforce Productivity & Compliance. Beyond that, 451 Research has a robust set of quantitative insights covered in products such as Voice of the Enterprise, Voice of the Connected User Landscape, Voice of the Service Provider, Cloud Price Index, Market Monitor, the M&A KnowledgeBase and the Datacenter KnowledgeBase. All of these 451 Research services, which are accessible via the web, provide critical and timely analysis specifically focused on the business of enterprise IT innovation. For more information about 451 Research, please go to: V

6 Table of Contents TRENDS 1 TREND 1: INTENT-BASED NETWORKING WILL BECOME THE NEW ENTERPRISE NORM 1 RECOMMENDATIONS WINNERS LOSERS TREND 2: CONSOLIDATION WILL RAMP UP, SPURRED BY THE EXPANSION OF SD-WAN 3 Figure 1: SD-WAN Will Keep Growing RECOMMENDATIONS WINNERS LOSERS TREND 3: MOMENTUM IN SD-WAN WILL ACCELERATE PROGRESS IN SDN/NFV 5 RECOMMENDATIONS WINNERS LOSERS TREND 4: DISAGGREGATION WILL GAIN TRACTION IN THE ENTERPRISE AND CONTINUE TO FLOURISH IN CLOUD/SERVICE PROVIDER NETWORKS 7 RECOMMENDATIONS WINNERS LOSERS THE LONG VIEW 9 FURTHER READING 10 INDEX OF COMPANIES 11 VI