There’s good news for IT service providers – the enterprise networking market will grow at a compound rate of 5.9 percent through 2018. According to the market research firm Technology Business Research (TBR), that means the value of this category will reach $99 billion.
While this research bodes well for IT service providers, there will be a lot of turmoil along the way. The price of networking infrastructure will fall at an increase rate, while the services segment of the enterprise networking market will grow at a compound annual rate of 7.2 percent.
Eliminating network appliances
According to the researchers at TBR, much of this change will be driven by the shift to cloud computing services and software-defined networking (SDN).This means that rather than managing complex enterprise networks themselves more organizations are going to find it simpler to invoke, for example, unified communications as a service.
Making the matter more quixotic for IT services providers focused primarily on selling network hardware is the that fact that a greater percentage of networking equipment will be based on commodity silicon and industry standard x86 servers that will command a lower margin than products based on proprietary ASIC technologies. In addition, many of the network appliances that IT service providers currently resell are likely to disappear thanks to the rise of Network Function Virtualization (NFV) software that eliminates the need for many dedicated network appliances.
Increasing flexibility in networking environments
On the plus side of the ledger is the fact that the cost of managing enterprise networks is going to fall significantly. Fundamentally, SDNs are about replacing command line interfaces with a higher level of software that abstracts away the complexity of managing the underlying network infrastructure.This is accomplished by separating the control plane from the underlying network using a controller.
The most significant aspect of SDNs is the amount of flexibility they introduce into the networking environment. Not only do SDNs eliminate potential lock-in at the hardware level, multiple software controllers can be used in tandem to simultaneously manage a broad array of network services that are no longer mapped to a specific piece of network infrastructure.
Because those controllers are based on software, they can scale just by making additional infrastructure available as needed. As a result, managing those networks becomes simpler. NFVs take that concept a step further by turning physical appliances into a piece of software that still performs a specific function, such as load balancing, running on top of a shared piece of commodity infrastructure.
Controllers then expose northbound APIs that application developers can use to directly control network resources. That means that for all intents and purposes controllers turn the network into a set of unified programmable resources.
A recent research report from Rayno Media says that once this transformation is complete the SDN market will be worth well over $20 billion. Naturally, it will take a while for all this to come about. But as it does, it’s clear that enterprise networking and the IT service providers who once knew it will never be the same again.