A recent report from TBR forecasts 70% CAGR in enterprise-related SDN revenue through 2020, though warns vendors may need to change mindsets
Global enterprises are on pace to spend $12 billion on software-defined networking by 2020, according to a recent report from Technology Business Research.
Despite claims enterprises are still in the early phases of trialling SDN equipment, the report forecasts a 70.2% compound annual growth rate in enterprise-related SDN revenue between 2015 and 2020, with a majority of spend on infrastructure and “displacing legacy technologies.” However, to reach this growth, TBR states vendors will need to be more proactive in helping enterprises move beyond legacy business practices.
“Adoption is still fairly small and concentrated,” said Krista Macomber, a data center senior analyst at TBR. “But 2016 will be a telling year as standards bodies, such as the Open Networking Foundation, mature and a growing number of success stories from trial deployments are cultivated. This will pave a path to accelerated customer adoption, increasingly at the expense of legacy technologies.”
TBR sees further challenges for hardware-centric vendors still grappling with new business and operational models. The research firm noted vendors like Cisco will likely see increased competition from vendors moving aggressively toward software-infused white boxes, opening up the opportunity for strategic alliances as SDN vendors look to bring new products to market. Those alliances are expected in “strategic areas” including hyperconverged platforms and security, with SDN partnerships also set to open up new revenue streams for vendors able to serve broader user cases.
Of course, vendor mindsets also will need to change in terms of working with rivals to further the SDN market. TBR noted progress has been made by various standards bodies to lessen the barriers to these partnerships based on the use of open source platforms, but vendors will need to be open to such initiatives if they want to benefit from the market.
“Standards bodies lay the groundwork to overcome many customer pain points, such as workload bottlenecks and lack of flexibility,” said Stephanie Long, a data center research analyst at TBR. “Barriers to entry, such as resistance to change and lack of knowledge about SDN, remain, however, and vendors will need to overcome these obstacles to foster widespread adoption.”
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