As communications service providers (CSPs) refashion their networks and operations processes for the cloud era, software defined networking (SDN) has been somewhat overshadowed by its complementary technology, network functions virtualisation (NFV).

In 2016, however, that began to change. Smart CSPs are harnessing SDN to support new enterprise services now while planning a longer term, more complete WAN redesign in conjunction with their wider cloudification efforts. A range of vendors, including new entrants, are attacking the SDN in the WAN opportunity with multiple approaches.

CSPs until recently used SDN only in the data centre

Analysys Mason forecasts that global CSP spending for SDN-related software, hardware and professional services will grow from USD1.3 billion in 2016 to USD5.0 billion in 2020, split between data centre and network applications, says Dana Cooperson, head of Networks-Focused Software Systems Research at Analysys Mason.

SDN in the DC is well understood and the transition is well underway. A high proportion of telco data centres will be SDN-enabled by 2020 with SDN controllers from vendors including Brocade, Cisco, HPE, NEC, Nokia, Juniper and others, driven by the need for cost reduction, the migration of internal IT workloads to cloud, NFVI requirements, and the growth in enterprise cloud services.

SDN in the WAN is more complex; deployments started in earnest in 2016

Multiple SDN-based network abstraction approaches that improve service flexibility and WAN programmability are being tested and deployed by CSPs or are just coming to market, including platforms/software suites such as Ciena’s MCP, Cisco’s NSO, Infinera’s Xceed, Juniper’s NorthStar SDN Network Controller and Nokia NSP (see Figure 1).

Enterprise-service-focused SDN deployments (vCPE, cloud VPN, SD-WAN and multi-cloud bursting) are driving spending now; SDN to create a programmable IP/optical WAN will follow because it requires a rethink about how the WAN is built. Consulting and integration requirements will drive SDN-related professional services spend.

Of the CSP WAN SDN spend captured in Figure 1, USD221 million in 2016 and USD902 million in 2020 is specifically for network management and control software and related professional services.

SDN could disrupt the WAN networking vendor status quo

The WAN is not a greenfield operation; CSPs have spent billions creating WAN infrastructure based on sophisticated, high-performance IP/optical network elements from Alcatel-Lucent (now Nokia), Ciena, Cisco Systems, Huawei, Infinera, Juniper and other leading network equipment providers (NEPs).

These vendors have a deep understanding of WAN networking; some of them (Cisco, Nokia, Juniper, in that order) have already taken an early lead in SDN in the WAN software and professional services in support of service-driven deployments, and they will fight to hold their hardware positions while expanding their software and services revenues.

ISVs, including Amdocs in its role as a multi-vendor network orchestration vendor and systems integrator, are among the leaders in SDN-related professional services. New entrants including Silver Peak, Versa and Viptela are attacking the opportunity with SD-WAN overlay solutions.

Simpler SDN-based network configuration and overlay solutions will continue to lead spending in the next several years; more-sophisticated control plane extension approaches and solutions that integrate the network underlay and overlay will follow. Industry open-source and standards initiatives are essential for creating programmable WANs.

An upcoming Analysys Mason research report will map the different types of vendors attacking the SDN in the WAN opportunity against the different technology approaches.

The author of this blog is Dana Cooperson, head of Networks-Focused Software Systems Research at Analysys Mason

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