ACG Projects Purchases of SDN Products by Service Providers for Use in Live Deployments Will Reach $15.6 Billion by 2018
The importance of SDN in service providers’ networks will grow, supporting cloud-based application and IT services data centers, advanced WAN IP and multilayer transport services. Adoption of the SDN model of abstracted and logically centralized control plane and network control applications will be extensive, influencing all major domains of SPs’ network infrastructures.
Service providers will deploy not only SDN software (including SDN controllers and control applications) but also evolve their underlying network infrastructures to use platforms enhanced to work with higher layer SDN controls in key network domains. SDN enabled infrastructure will be purchased in multiple equipment categories, including data center switches and routers, edge and core IP routers, carrier Ethernet switches and metro and core optical networking platforms. Adoption will occur along two dimensions: a portion of the SDN enabled equipment will be used directly in active developments, trials and deployments of SDN driven offerings. The percentage of total purchases used in live SDN deployments by SPs will increase. Beyond this percentage, there will be an additional portion purchased with the ability to be used in SDN deployments but whose functions are not turned on as of the time of purchase (they are being purchased so the SP will be ready to use SDN functionality at the appropriate time in their service development life cycles). Together, these two categories define the total opportunity at stake for SDN enabled infrastructures in SP markets.
Total purchases of SDN products by service providers for use in live SDN deployments worldwide will be $15.6 billion annually by 2018 and uptake will occur in essentially equal amounts (in total dollar terms) in the four principal domains of SP networking: data center, edge, metro and core. SDN software will comprise approximately 20% of this total with service control applications comprising a larger portion (margin of 60–40%) of the overall software spend by 2018 than SDN controllers. Both types of SDN software will be a crucial part of the SDN deployments though the value of control applications being embedded into the solutions will increase as deployments expand. At the current time and through 2016, data centers will be the most active domain for live deployments, representing over 50% of the total in the market in that period. However, by 2018 the importance of the other three domains will have increased, and deployment volumes will be of approximately equal size across them.
Revenue-generating services that SDN will enhance include cloud-based application and IT services, media and entertainment delivery, machine-to-machine and Internet of things (IoT) applications, and managed network services of multiple types. Most important, use cases will include service deployment automation, workload placement optimization, application-driven traffic steering, custom path generation, dynamic SLA assurance, and development of custom and differentiated services.
For additional information about ACG’s SP SDN Forecast contact Karen Grenier, kgrenier@acgresearch.net or 408-200-0967.
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