1102RA Software-Defined Networking: Another Key Step Toward the Boundary-free Enterprise™

What is Happening?  On 23 July, 2012, VMware announced it has signed a definitive agreement to acquire Nicira, Inc., a pioneer in software-defined networking (SDN) and a leader in network virtualization for open source initiatives. Saugatuck views this acquisition as “legitimizing” and accelerating the nacent trend toward abstracting the definition of network connections above the level of traditional network switches and routers.

Why is it Happening?  For about five years Saugatuck has been alerting clients to the challenges and benefits of virtualized infrastructures (389STR, Real or Virtual: All Infrastructures Must be Managed, 24Sept2007). Saugatuck views SDN as the next logical step in the evolution from traditional infrastructures consisting of dedicated physical devices (e.g., servers, storage, networks) to virtualized/abstracted and dynamically provisioned resources (e.g., memory, processing power, data, transmission bandwidth) which characterize the Boundary-free Enterprise™.

SDN delivers efficiencies and ease-of-use in network routers and switches that are analogous to the efficiencies and ease-of-use delivered by virtualization of servers and storage. Most notably, those efficiencies include:

• Reducing or even eliminating requirements for level 2 and 3 switches, and
• Enabling easy implementation of changes or reconfigurations of network connections and data paths.

Market Impact  Given the first benefit identified above, Saugatuck views SDN as an increasingly attractive alternative over the next five years versus sophisticated switches offered by companies such as Cisco and Juniper. Depending on VMware’s marketing and pricing, SDNs from it and other providers could reduce demand for sophisticated switches by as much as 20 percent by YE2014, and yield savings for customers of 5 percent or more of their network expenses. Further, due to Nicira’s focus on Open Source, even Juniper’s SDN offering is potentially exposed.

SDN has the potential for significant new functionality including:

• Abstraction of the logical network from the physical devices. This provides the foundation for managing all logical connections and data flows rather than managing the physical network components. This could provide a single control point and hopefully easy user interface.
• Dynamic and non-disruptive network modifications or re-definitions. Besides enabling easier implementations of network changes, this could enable dynamic/automated load balancing across parallel data paths.
• Data source independence. This provides workload and data flexibility since the application does not distinguish between data accessed via a transmission link and data accessed from a local storage device.

However, design of an SDN offering can pose new challenges and exposures. Saugatuck suggests that before committing to any SDN solution, customers should investigate the following areas:

• Single Point of Failure: Ensure that appropriate availability provisions are standard or optional to prevent the server(s) running the SDN logic from becoming a “single point of failure” for the entire network.
• Security: Ensure that appropriate safeguards exist to prevent security exposures in the SDN server(s).
• Performance: Understand any performance or configuration limitations which can potentially arise from moving some of the network control logic from specialized hardware to general purpose processors.

No doubt, this will be a competitive threat to Cisco’s historical dominance in network switches and routes – and a call to arms for many of the other systems vendors such as HP and IBM to likewise bring SDN offerings to the market by mid-2014 (whether by acquisition and organic growth). For example, we view SDN as a natural extension of IBM’s PureSystems family of servers.

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