Worldwide Carrier Routing & Switching Market Decreases

The Worldwide Carrier Routing & Switching market decreased both quarter over quarter and year over year, 10.6% and 6.6% respectively, posting revenues of $2.6 billion in Q1. 

Although the US economy has improved slightly and there is an increase in global carriers’ CapEx, ACG Research anticipates that the service provider switching and router market will increase slightly in 2013. There are, however, some positive signs in the market; in EMEA, the Middle East and in some parts of Africa the growth is solid and expected to continue throughout 2013. 

Countries in Europe are still contending with floundering and unstable economies; organizations and governments have maintained persistence in their demands for changes in exchange for bailouts. For all vendors Europe and the public/government sectors continue to be challenging markets. Service providers in Europe have indicated that they need to spend on their networks or risk falling behind to competitors and ultimately becoming obsolete. Whether they will remains to be seen.

For more information about ACG Research's Router and Switching service or other syndicated and consulting services, contact sales@acgresearch.net.

Ray Mota

rmota@acgresearch.net

www.acgresearch.net

Hybrid Cloud Networks Face Challenges, but SDN May Be the Answer

While the potential benefits of running IT services in the cloud are clear, there are still important challenges to overcome before the full promise of elastic clouds can be realized. The nature of these challenges varies -- affecting cloud networks, compute resources and storage -- and perhaps the most critical place they must be addressed is in hybrid cloud deployments. 

Click to read ACG's cloud analyst Paul Parker-Johnson's SearchCloudProvider article.

Paul Parker-Johnson
pparkerjohnson@acgresearch.net
www.acgresearch.net

Dell Strengthens Its Cloud Management Hand with Enstratius Acquisition

Among the cloud’s great promises are the lure of unmatched agility and scale delivering IT applications and services. Along with these great promises the cloud’s early days have also seen challenges handling governance of applications as they stretch dynamically across their virtualized infrastructures, and actually simplifying management of multitiered applications as they deploy across private and hybrid private/public clouds. A strong ‘felt need’ for simplified management of enterprise application portfolios across multiple supporting cloud service platforms has emerged. In fact, to realize the agility and scaling goals of the cloud across a whole portfolio of applications, providing that kind of consistent management for a heterogeneous mix of infrastructures is an essential tool for IT moving forward.

Recognizing this, as Dell has strengthened its hand for enabling its enterprise customers to meet these challenges of the clouds with its acquisition of Enstratius on May 6. Enstratius’ Cloud Management System brings a ‘cloud neutral’ approach to providing consistent governance and management to enterprise applications across a flexible mix of virtualized cloud environments in private and hybrid private/public deployments. Enterprises are able to leverage the capabilities of virtual data center management platforms from say, VMware and OpenStack and integrate them into a portfolio of applications managed from Enstratius’ CMS. If needs dictate the use of public clouds for overload computing, flexibly expanded development resources, or automated disaster recovery across applications, secure access to public cloud resources from, say, Rackspace, Azure, or Terremark services (to name a few) can be enabled from CMS via integrated functionality and APIs. The net effect is to introduce a layer of consistency in managing applications across the multiple virtual infrastructure platforms.

As enterprise customers, and service providers supporting them, address their need for consistent, scalable controls, and simplified management of applications across multiple participating clouds, a layer of management such as Dell’s newly acquired Enstratius CMS may provide an important building block in enabling the cloud’s potential. Kudos to Dell for perceiving the importance of this need, and bringing the Enstratius CMS into its menu of offerings for cloud IT.

For more information on ACG's cloud services and SDN services, contact sales@acgresearch.net.

Paul Parker-Johnson
pparkerjohnson@acgresearch.net
www.acgresearch.net

ACG Launches SDN Syndicated and Consulting Services

Software-Defined Networking is an approach to architecting networking equipment that fundamentally changes the way we design and build networks. Software-Defined Networking separates the control plane from the data plane in network switches and routers. The control plane is implemented in software on servers separate from the network equipment and the data plane is implemented in network equipment. OpenFlow is the leading API offered in the SDN architecture.

ACG Research's SDN Practice combines three of ACG Research's leading market syndicated services into one practice that is focused on service providers. Our forecast covers the controller market size and the impact it has on routers and switches. 

ACG’s syndicated and consulting services cover: Market Analysis, SDN Education, Business Case Modeling, Architectures and Recommendations.

For more information or to subscribe to the service, contact sales@acgresearch.net.

Ray Mota

rmota@acgresearch.net

www.acgresearch.net

SDNs: Key to Accelerating the Adoption of Public Cloud-Based Services?

Today’s cloud-based services, while clearly ground-breaking, still have important gaps to fill, such as in the reliability and integrity of their service delivery infrastructures, or the degree of automation they use for activating and managing services, before the full promise of the cloud can be achieved.. While the baseline of many offerings is in place, many efforts to close these gaps are furiously underway.

Alongside the virtualized infrastructures of the cloud computing data center, an additional domain in which important progress remains to be made is in the quality, performance, and agility of the communication networks cloud providers leverage to deliver their offerings. As things stand today, many service offerings are limited in responsiveness, performance, and scale because of the limitations of the communication networks on which they are relying. The effects of the limitations vary by the operator’s location, operating model and asset pool. For example, cloud SPs running over the top of the Internet to their customers have a different set of issues to address than SPs offering cloud-based services on top of customer-connecting networks they already own. 

Stepping it up

Some steps have been taken to reduce the size of the gaps. For example, many operators have developed cloud VPNs that activate special properties for enterprises and over-the-top customers to improve their experiences. However, the agility of these offerings is constrained in many cases by the multivendor, multidomain nature of SPs’ infrastructures, and activating suitably powerful SLAs for both wireline and wireless customers still poses significant challenges.

Which brings us back to the essential question of this note: do SDNs present a special opportunity for operators to accelerate the success of their public cloud-based services? The short answer is, they may. A resounding yes will depend on how pervasively operators and suppliers embrace the paradigm, as along with the pace of their uptake.

Promises, promises

SDN has the potential to normalize templates for deploying a wide range of services on top of heterogeneous network infrastructures. In cloud-based services, one can easily imagine an SP constructing service templates for offerings it wants to support which could be overlaid consistently onto its underlying networks. In this mode, an SP could activate any cloud-based service it has on its menu from burst compute, storage archiving and cloud-based software development to distributed m2m and real-time conferencing on demand and without constraint. The templates would be consistent, and deployment could be achieved in any topology required.

Accelerating the path to the cloud

By leveraging this basic flexibility, software-defined networks could accelerate the feasibility, speed of deployment, and rate of acceptance of a broader range of cloud-based services than is achievable today. SDNs also have the additional virtue of each operator injecting its own differentiating value into its service offerings. 

If early implementations yield positive results, it will be clear SDNs have a role to play in accelerating the creation of superior clouds by removing barriers to achieving the agility customers expect before embracing the cloud-enabled world with confidence. The only remaining questions will be, by which operators, for which services and customers, and how fast?

For more information on ACG's cloud services and SDN services, contact sales@acgresearch.net.

Paul Parker-Johnson
pparkerjohnson@acgresearch.net
 www.acgresearch.net

Seven Myths of Machine to Machine

Interest in machine to machine has been gaining considerable momentum in both the press and industry and is expected to boost new productivity in many industries and require a new IT ecosystem. 

The interest in machine to machine (M2M), sometimes called the Internet of Things or IoT, is prompting a degree of hyperbole in the industry—as often happens with new technology. In addition to inflating expectations, too much hoopla can confuse the market and detrimentally overshadow some of the realities of drivers, adoption rates and addressable market size. In spite of the hype (which is typical in the early adoption cycle), M2M is a substantive technology transition that will create a new market and ecosystem. However, the industry needs a reality check related to the myths associated with M2M.

Click here to download the Market Impact.

David Dines
ddines@acgresearch.net
www.acgresearch.net

Increases in Total Worldwide Service Provider Carrier Router-Switch Market Projected

The Total Worldwide Service Provider Carrier Router-Switch market is projected to moderately increase from $11.7B to $15.1B by 2018. From a regional perspective, APAC and the Americas, respectively, will lead the growth as carriers respond to increases in data traffic, big data, virtualization, software-defined networking and the unrelenting demand for innovative and intelligent applications and services. The projected five-year growth will be strongest (in order of growth) in APAC (CAGR +6.4%), Americas (CAGR +4.9%), and EMEA (CAGR +4.9%). ACG anticipates that the total router and switching market will increase 4.6% in 2013 as well as increase in each successive year. 

In spite of challenges facing global economies, the emphasis on new and innovative services will instigate a significant shift in networking. Cloud services and machine-to-machine connectivity, which have redefined the way applications run on the network, exposing their underlying limitations, have contributed to the explosion of inter-data center traffic. The long-term demand for high-performance and innovative networks/architectures that address inter-connected data centers will increase in momentum. 

In the next five years service providers will continue to focus on monetizing emerging opportunities, which will require networks that enable them to accelerate service innovation, scale services, and expand the customers’ experiences all within a viable economic framework. Service providers are looking at vendors’ solutions that provide a single operating system, operational simplicity and a platform with the highest possible scale across bandwidth, subscribers, and services. 

For more information about ACG Research's syndicated and consulting services, contact sales@acgresearch.net.

Ray Mota

rmota@acgresearch.net

www.acgresearch.net

OpenDaylight: The Break-Away Moment for SDN

The Linux Foundation just announced the formation of a new open source development project intended to harness contributions from a wide range of cloud and networking industry participants to accelerate development of a consistently structured framework for software-defined networks or SDNs. This announcement is a watershed in the networking industry’s evolution, as it holds the potential to break multiple categories of developers free from the constraints of sometimes hopelessly constrained API constructs. By bringing firms as diverse as Cisco, IBM, Juniper, Red Hat, Microsoft, Intel and VMware (to name just a few) together in a mutual tryst to contribute intellectual energy and technology contributions to a normalized set of SDN building blocks that can serve as the foundation on which other application innovations can be built, the networking community has arrived at a milestone that has the potential of being its lift off point toward an unprecedented range of innovation. Multifaceted application systems may just end up having a rich catalog of easily integrated capabilities that will accelerate their uptake and deployment.

Is this rosier picture of network-savvy applications a guaranteed outcome of OpenDaylight’s work? Hardly, the outcomes remain to be seen from the efforts of its contributors. But is the possibility of a rapidly developed and richly endowed common foundation of SDNs significantly improved by forming the OpenDaylight Project versus limping along with the smorgasbord of SDN approaches we have been experiencing in the first year of two of the paradigm’s emergence? It’s hard to arrive at a different conclusion, when you think of the range of talents assembled toward achieving the project’s objectives, and imagine the best practices in open source platform development that can be brought to bear on the process with the Linux Foundation’s experience close at hand. The full Internet community stands to be the beneficiary with each company that contributes able to reap some of the benefits for the use cases and applications on which they choose to focus for their customers.

While momentum is only discernible with delivery of concrete capabilities along the project timeline, you can see it foreshadowed by the strength of the contributing assembly. With proper guidance, it would seem the break-away period for SDN is more within sight now than it ever has been before. 

For details about OpenDaylight, click here.

For more information about ACG Research's cloud computing services, click here.

Paul Parker-Johnson

pparkerjohnson@acgresearch.net 

www.acgresearch.net

Building Broadband Past the Saturation Point

U.S. broadband has reached the end of its growth phase, and the industry is now shifting from building infrastructure and acquiring customers to creating sustainable business models. 

The U.S. fixed-line broadband market appears to have reached the saturation point. The most recent FCC broadband report with data through 2011 indicates that about 80% of U.S. households are served by fixed-line broadband. It also shows the classic S shaped market development curve with the last inflection point in the S occurring in 2007. This data, when combined with year-end 2012 data from the largest fixed-line broadband operators, confirms market saturation. Fixed-line broadband connections for 4Q12 compared to the previous year showed little change: AT&T (NYSE: T) 0.3%, CenturyLink (NYSE: CTL) 3.5%, Comcast (Nasdaq: CMCSA) 6%, and Verizon (NYSE: VZ) 1.4%.

Click here to read Michael Kennedy's FierceTelecom article.

For more information about Michael Kennedy, click here.

Click here for more information about ACG's business case analysis consulting research service.

Michael Kennedy

mkennedy@acgresearch.net
www.acgresearch

The Business Case for Ethernet Services for Mid-Sized Businesses

Network-based applications such as Voice over IP (VoIP), cloud, collaboration services and video applications of all kinds are driving the need for high-speed, high-quality and reliable networks that exceed the capabilities of the services many businesses are using today. Bandwidth requirements are forcing growing businesses to rethink their networking solutions. For example, we estimate that mid-sized business sites will require 25 Mbps to 85 Mbps of bandwidth over the next three years. TDM-based access networks in use today are poorly positioned to meet these emerging network service needs. They do not scale easily to meet higher bandwidth requirements, and quality guarantees and resiliency features must be added via a switching or routing overlay.

Ethernet services scale from 1 Mbps to 10 Gbps and beyond and have built-in quality and resiliency features that are compliant with industry-standard Carrier Ethernet specifications. When combined with an Ethernet LAN, Ethernet services provide an end-to-end Native Ethernet solution. This makes Ethernet services easier to install, operate and maintain than TDM-based access service alternatives.

For typical mid-sized businesses, ACG Research compared the monthly recurring costs of Ethernet versus TDM access for point-to-point, point-to-multipoint, and multipoint-to-multipoint network configurations. We found that Ethernet services have 56 percent to 71 percent lower costs than TDM-based alternatives. In addition, Ethernet services provide a complete end-to-end solution, while a switching or routing overlay must be added to the TDM access service to create a complete solution.

An analysis of scaling economics of Ethernet and TDM/SONET access services shows that Ethernet solutions are available at many bandwidth speeds with gradually increasing prices. In contrast, TDM bandwidth speeds are limited with steep price steps as speed increases. The TDM scaling behavior creates bandwidth barriers to increasing network capacity that can be overcome by switching to Ethernet services. 

Click here too download the whitepaper.

For more information about ACG Research's business case analysis service, click here.

Michael Kennedy

mkennedy@acgresearch.net
www.acgresearch