Cisco buying Viptela is the first real shot in the battle, a recognition that SD-WAN is not a fad, is going to be a real business and can no longer be ignored. SD-WAN has momentum and customers love it. Most importantly, Viptela is a pure software play, so Cisco can offer this to its existing customer base on top of its existing hardware products without any issues. I see this as a positive for Cisco, finally admitting that the current WAN structure was untenable. In a world of agile businesses, a flexible software layer on the top can alleviate WAN complexity and let the businesses move faster. John Vincenzo, SVP of Silver Peak, stated in an email to me,

“The Cisco acquisition of Viptela serves as a clear indication that pure-play SD-WAN vendors that can’t address the broader performance and security requirements of the WAN edge will be challenged to build stand-alone businesses, and are likely to be consolidated.”

I am primarily in agreement of his assessment, but put another way, if you are only a software layer, the barrier to purchase and integration is a lot lower. Unfortunately, so is stickiness and switching costs for your customers, making it easier for a business to jump ship if you are not innovating. Part of the appeal of a pure SD-WAN play for customer is the very thing that creates challenges for vendors in growing and sustaining the business: lack of a consistent ongoing revenue stream.

SD-WAN technology is reaching market velocity, and deployments are coming along quickly. But most of the 30-40 vendors deploying SD-WAN are simply touting the ability to create a hybrid WAN, basically a WAN environment that uses multiple connections (like MPLS, internet, 4G LTE or others). This is an interesting feature, but long-term differentiation will be difficult. It is hard to build an empire on a feature, which is why most of the dozens of businesses will fail. The evolution of SD-WAN will be Company (yesterday) → Product (today) → Feature (near future) → Table Stakes (long-term future). In a few years SD-WAN will be an assumption, not a differentiation, but until that happens, expect a lot of jockeying in the market.

Software-Defined WAN progression: From dedicated Company to standalone Product to differentiated Feature to simple Table Stakes (Source: John Fruehe / Moor Insights & Strategy & 123RF.com / Wilm Ihlenfeld)

After a year of watching the market, talking to customers and studying the technology, I believe we’ll see the following three major trends:

• Consolidation: Nuage went early, consumed by Nokia, who has continued to operate it with much autonomy; Viptela was second in line, moving under the Cisco umbrella. The better companies in the market are probably now all in play: CloudGenix, VeloCloud, Versa Networks and Silver Peak are probably top contenders here. They have good technology and more importantly a market footprint. I expect equipment vendors to be prime suitors, but don’t discount a carrier, MSP or large cloud provider stepping up somewhere.
• Cloud Connectivity: Early SD-WAN offerings were pitched for hybrid WAN connections, reducing MPLS costs, and branch office automation. Today the big pitch for SD-WAN is as a cloud connectivity layer for datacenters. Many are now offering specific cloud optimizations and even “cloud traffic reports.” Clearly, they see branch office cloud connectivity being a bigger opportunity than just connecting to HQ. Routing web and cloud app traffic directly out of the branch and not hair-pinning it through the HQ datacenter and back is a big cost saver and simplifies traffic management greatly—as long as you have a good hold on the security.
• Carrier Deals: While enterprises are a bigger market (with higher ASPs), they move slowly; the real action in the past year has been carrier deals. SD-WAN vendors are locking down their footprint with carriers and that could be the Trojan horse for getting into enterprises in the long run. If your carrier is already using product X to connect you, it creates a great bias toward purchase when your enterprise decides to start down the SD-WAN path.

All of these trends point to good future for SD-WAN. But that is not an infinite path. Eventually all networks will have software definition, because hard coding the connections and rules is time consuming and inflexible. By this time, SD-WAN will simply be called WAN, as the software-definition of the whole network will mostly be expected. Much like seatbelts—which were once an upsell or an advertised feature—are now standard equipment expected in every vehicle. Eventually, SD-WAN will be just as mundane. But until then, expect a lot of movement in the market.

The post SD-WAN Gets Real As Cisco Systems Makes A Big Investment appeared first on Moor Insights & Strategy.

Open source solutions, on the other hand, appear to be the antithesis of proprietary networking: plenty of innovation, an ability to move fast and dramatically lower cost. What’s not to love? Well, for starters, choice. Nobody likes a monopoly, but on the other end of the spectrum, having too many choices makes the evaluation and selection process nearly impossible. The business world needs a better alternative, and the open source community is listening, beginning to deliver this in a more cohesive manner.

The historical problem with open source was that, while better alternatives existed, the burden of integration landed on the customer or a specialized integrator (who simply created a different kind of lock-in). Most businesses tended to stick with a proprietary solution because it already worked with what they had and there was lower risk if things went wrong. IT was hesitant to open that can of worms, and business leaders weren’t interested in rocking the boat. This was until the proprietary solutions limited a business’ ability to change or innovate, which puts new pressure on IT to come up with a better solution.

To be fair, all enterprise solutions will, by default, create a lock-in as once they are deployed they are very difficult to replace. The benefit of open source is not that it removes lock-in altogether; instead of being wed to single vendor and a single technology, one is connected to a platform / API. While the open source solution may be driven by a single organization, there are a wider range of technology choices underneath.

Two large open source organizations, the Open Networking Foundation and ON.LAB are merging, signaling that they understand the business need for a more fully baked open source solution instead of just projects. The idea that “If we build it, they will come” is stepping aside, being replaced by the realization that “We can build it, but if we don’t make it easy and interoperable, they won’t come.”

With the merger of these two organizations, the companies and individuals involved are now contributing to projects that are more cohesive and more “commercially adaptable”, enabling greater reach than before.

The combined organizations are working to create an “innovation pipeline” to help overcome the biggest challenge with open source acceptance: the need to string all of these pieces together yourself. By shifting the focus from projects to a pipeline, they can establish a stack that enables multiple projects or platforms to be easily chained together, working to deliver the services that businesses need. This chain is comprised of both the solution blocks (projects and platforms) as well as the “glue” (the standards and internetworking APIs that link them all together). If one envisions this like Lego blocks, the blocks themselves are the projects and the small, standardized round pegs on the top are the APIs, allowing pieces to be combined into a solution. By standardizing the connections and interfaces between these blocks, more interesting and customized solutions can be built because less time needs to be spent on the integration.

An example of how this pipeline works is CORD, a project to re-architect a telecom central office as a datacenter, enabling a more flexible and distributed solution. While this is a defined platform, variants for mobile (M-CORD), residential (R-CORD) and enterprise (E-CORD) can easily be designed by “snapping” in different pieces, like building different models with Legos, using many of the same base blocks but some specialized blocks to differentiate between a car and a house.

The beauty of this approach is that it enables other open source alternatives to be integrated into the design, for instance adding alternative frameworks like OPNFV or alterative controllers like OpenDaylight, without requiring someone to re-architect everything from top to bottom.

While much of the early work will be focused with telecom operators and service providers, that makes the most sense because they are the early adopters these days. The old stodgy phone company has become the innovator as carriers reinvent themselves, shedding years of proprietary equipment in favor of more flexible, open solutions. We’ll see this trend play out with enterprises as well. They are behind carriers on the open platform revolution but can be the fast followers as they see success in business transformation taking hold with carriers.

While this innovation pipeline will not replace proprietary networking, it does put more pressure on those traditional networking vendors, which is a good thing. That is how markets are supposed to work. Competition for ideas drives innovation, and in the end, business are the ultimate beneficiaries.

The post A Networking Open Source Innovation Pipeline Can Accelerate Businesses appeared first on Moor Insights & Strategy.

The biannual ONUG forum is a chance for all of these companies to collaborate on their use cases in order to drive vendors towards actual open networking solutions. To give you an idea about the influence that this group can have, when the topic of network monitoring came up, the speaker asked if all of the people spending more than $100M a year in monitoring would stand up. 9 companies were represented. When he then asked who was spending more than $10M most of the room was on their feet. That is a billion right there in the room; these are opinions that matter if you are a vendor. And vendors are listening. Software-defined WAN (SD-WAN) was an early use case that was identified by this group; now we have dozens of different solutions to choose from and high market acceptance / deployment.

Here is the TL;DR summary of what I heard:

• SD-WAN is mainstream. This is important, because it shows the influence that ONUG has had in getting vendors to better address how businesses link their headquarters with branches, suppliers and partners, making it easier, faster and cheaper.
•  Second-level problems are pointing to maturity and deployments. In academic environments one can wax about “the way things should be” but in production environments you find out “how things should really be”, including all the warts and pitfalls. This is a positive sign that the solutions are actually being deployed in production environments, not in test vacuums.
• Analytics is becoming more of an issue. Beyond everything being connected, everything is now reporting health and status. This is what a business can use to fine tune and optimize everything from manufacturing processes to marketing. But businesses still have to collect and analyze all of that data, there is no “easy button” here.
• Complexity is a given. Three years go everyone said SDN will make things easier. Now companies are finding out that to gain the flexibility of SDN and open networking there will actually be more complexity. Which is why I predict that automation will be the next front in this war. The more complex things get, the more automation a business will need to offset the complexity.
• People are going to make the difference. Nobody in IT has the right skills today. Over and over, in almost every session, the call for more investment in developing people was made loud and clear. 3 years ago SDN was seen by some as a job killer, now it might actually become a résumé enhancer.
• Hybrid cloud is going to be critical. I hosted a panel on hybrid cloud (and have also recently written about it), and it is clear that there is high interest in this topic. While there are plenty of different definitions of what hybrid cloud actually means, it’s clear that almost everyone wants some kind of answer. And now.

Overall we are seeing continued interest, and most importantly, action, from ONUG. Member companies are investing the manpower and resources to drive these working groups, because they see the value coming out the other end. We’re still in the early first quarter of this network transformation game, but it is clear where things are headed. They are heading towards open and flexible, because businesses can’t get where they need to go with the infrastructure they have today, something has to change.

To read the full report please visit our site.

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But to do this, networking needs to change, from the old paradigm of large, vertical and tightly integrated solutions towards modern, distributed and more easily managed systems. It is no surprise that this change in the datacenter is being driven by open source challengers like OpenDaylight, OPNFV or ONOS, because innovation rarely comes from incumbents protecting their share. SDN / NFV have primarily been tools for IT to help automate and modernize the datacenter, but the “software definition-ization” is starting to show up all over the network now, not just in the datacenter. This trend promises to move us from the unresponsive in-demand world where users are always waiting to an on-demand world where users are better served at the speed of business.

Just as the datacenter has changed, network connections outside of the datacenter are changing in reaction to this demand for IT to shape its offering to better align with the needs of the business.

The wide area network (WAN), which connects branch offices to headquarters or serves as a connection to cloud services, was the lowest hanging fruit for IT to tackle. Software-Defined WAN (SD-WAN) is running at a good clip with more than 70% of the customers in the spring Open Networking User Group (ONUG) meeting already engaged in a pilot or in production. Clearly the benefits of software definition in terms of flexibility and agility are overpowering the slower moving proprietary products. Companies like Glue Networks, Riverbed, Silver Peak, VeloCloud and Viptela are all staking their claim in this space, each with a slightly nuanced approach to SD-WAN in an area that is large enough for multiple vendors to compete profitably.

Coming up quickly is Wi-Fi. Wi-Fi has been a fixture in corporate environments for years, but the typical complaint was that your Wi-Fi at home was faster than in the office. At home, an access point and controller are a single unit, so replacement to faster technologies was fast and relatively inexpensive. In businesses the access points are strewn throughout the campus with centralized (expensive and proprietary) controllers that were tightly linked to these access points. Upgrading is difficult, expensive and time consuming, but this is changing. The linkage between access points and controllers is becoming less stringent, allowing for customers to choose different APs and controllers, even moving their controller to the cloud for convenience. Companies like Aerohive, Cisco Systems (Meraki), Hewlett Packard Enterprise Aruba, Mojo Networks and Ruckus Networks are changing the way that Wi-Fi is delivered. More importantly, all are adding location / proximity to their platforms, enabling, for instance, a retail business to better track its customers and provide more customer-optimized experiences. Because of these capabilities and the experiential features, suddenly the demand for new / better WiFi is often coming from the CMO instead of the CIO. Look for SD-WiFi to become the next new phrase, especially in businesses looking to maximize their customer engagement.

In addition to Wi-Fi, software definition is coming to the local area network (LAN) as well, especially to the campus networks were business changes are often difficult for IT to manage. By moving from more “hard-wired” infrastructures to those that that are software-defined and more flexible, changes to the campus network can now match the pace of change in the business. Workgroups can change quickly, the network and applications can morph to match changing conditions and IT can manage access and data closer to the users that need it. Mergers, acquisitions and divestitures can have a dramatic impact on campus computing as IT struggles to react to these business changes. Moving from a more hard-coded to a software-defined management structure will enable IT to match the changing needs of the business. The idea of an SD-LAN would encompass both the wired and wireless infrastructures (a wider definition of SD-WiFi that we discussed above). We have written about this convergence in the past and see it as a growing trend in the market. Aerohive was the first company that I had heard using the SD-LAN moniker, but it genuinely encompasses what is starting to happen in the campus networks, so expect to hear more of that over time.

The key to all of this are the business drivers. I have often said that servers and storage were “easy” to deal with because they are endpoints, where networking is a mesh that connects everything together. When you change an endpoint, you might create a problem, but when you change the mesh you can create hundreds or thousands of problems. Which is why businesses are loathe to change networking strategies. But the need to drive more efficient and agile businesses is creating a pull on IT to start responding to the business needs with a more flexible, software-defined approach in order to enable the company to better respond to changing market needs. It truly is an exciting time to be in networking, but only if you are embracing change in networking. The old-school network leaders like Cisco, Juniper and Alcatel-Lucent are trying to figure out where they live in this new world.

The post Software-Defined Networking: Not Just For Datacenters Anymore appeared first on Moor Insights & Strategy.

Clouds are a set of pooled computing resources that can be provisioned and orchestrated on the fly in an automated manner. Amazon Web Services is a great example of a public cloud service, and your own business may run a private cloud in its datacenter. Similar to virtualization, clouds are an elastic pool where resources can be added and sliced in any way, all from an interface that exposes the capability to the end user (self-servicing vs. IT job tickets).

Originally, the hybrid cloud concept was a single cloud where compute spanned both public and private domains, existing on both sides of the firewall. But from a security and a logistics standpoint, this was hard to implement. Today “hybrid cloud” is becoming “hybrid cloud environment”, a strategy where businesses might be running applications in different environments, with multiple cloud vendors, both public and private. Data and resources are shared across multiple domains (and providers), but each element only lives in one domain.

Normally compute follows data, but there may be instances where data and compute need to live in different domains, whether it is for security, latency or other factors. The interconnection between these disparate elements of the hybrid environment is where businesses struggle, and cloud service providers step in to join it all together. Here are some basic examples of a hybrid environment:

(Source: John Fruehe)

Typically, private cloud might be used for proprietary or differentiated applications, essentially the company’s “secret sauce” applications that give them a competitive advantage or potentially hold very secure/confidential information that must live inside their firewall. Private cloud is typically not as self-serviceable as public, but that is changing. Private clouds also require hardware although externally hosted options, and pure Opex models are now finding favor. Public cloud tends to be used for application development, “bursty” workloads or applications that are non-differentiated (like the typical backoffice operational and billing applications that work the same for everyone). Both public and private have their place and long term coexistence will be fundamental for most businesses, thus the need for standards.

Clouds differ from virtualization and traditional IT infrastructures in the following ways:

Most companies are entering a hybrid cloud environment because they are dealing with multiple clouds, data sources and vendors. Here are some examples of what vendors might refer to as hybrid cloud environments:

• Running a private cloud in your datacenter while also leveraging public cloud services like Amazon Web Services or Microsoft Azure
• A private cloud application that integrates an external data feed like meteorlogical or mapping data from a public source
• Using public cloud analytical tools to analyze your company’s proprietary internal data that sits within your datacenter (or in a hosted private cloud)
• An Internet of Things (IoT) private cloud application in your datacenter using public cloud services as endpoint gateways for collection of telemetry data
• Using “bursting” to push private cloud apps to a provider when traffic explodes

With many vendors approaching hybrid cloud differently, there need to be some standards, common methodology and lexicon to help businesses navigate this area. Multi-cloud and multi-vendor are becoming the preferred strategies for most companies; interconnection, policy adherence and common management will need to be in place for these strategies to succeed.

The Open Networking User Group (ONUG) is actually working on this challenge, creating a Hybrid Cloud Framework that will enable vendors to not only get onto the same page in how they address hybrid clouds, but also solve one of the biggest customer challenges being faced today. At the last ONUG meeting someone posed the question, “Is cloud just the next generation of proprietary lock-in?” A compelling question to be sure, primarily because most believe that they should be able to move an app from one cloud to another—but few (if any) have ever accomplished that. A common framework would go a long way towards helping businesses work with hosters, brokers and cloud technology providers. The working group will be focused on defining the standards around security, contracts, technical architectures and more, helping to put together something similar to the Rosetta Stone of hybrid cloud, enabling businesses and providers to all work on the same page. Just as standardization helped the server business grow rapidly, some standardization in the hybrid cloud space could make it easier for businesses to make the move into the cloud, gaining more efficiency and flexibility. By not being locked in, a business can leverage clouds without worrying about the downstream complications.

If you are going to be in New York on October 24-25 it would be worth your time to attend the ONUG Fall 2016 event to learn more about how hybrid cloud will impact your business.

The post The ‘Hybrid Cloud’ Dilemma appeared first on Moor Insights & Strategy.