Light Reading

Adding Up the SDN Effect

Craig Matsumoto
News Analysis
Craig Matsumoto

4:50 PM -- Few customers have really plunged into software defined networking (SDN), but the technology is going to be a bigger fact of life for equipment vendors, and that's something to worry about.

Numbers from Brian Marshall, an analyst with ISI Group Inc. , seem to support that. In a report published Wednesday, Marshall claims that in five years, the capex budget of the "Web 2.0 Big Six" will equal that of AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) -- roughly $37 billion.

(The big six are Inc. (Nasdaq: AMZN), Apple Inc. (Nasdaq: AAPL), eBay Inc. (Nasdaq: EBAY), Facebook , Google (Nasdaq: GOOG) and Yahoo Inc. (Nasdaq: YHOO).)

The analysis isn't talking about all service-provider capex, just the two big U.S. telcos. But considering how much concern AT&T's budget generated coming into 2012, it seems noteworthy that the Gang of Six could eventually wield purchasing power that could make or break vendors' quarters. (See Carrier Capex Could Rebound Quickly.)

The difficulty for equipment vendors is that while telcos sought out exacting standards and reliability, the Web 2.0 companies mainly want stuff to be cheap. That leaves Marshall "somewhat concerned longer-term by initiatives aimed at taking costs out of their IT infrastructure," he writes, citing Google and Yahoo's interest in OpenFlow, and Facebook's Open Compute Project. At Interop next week, I expect every switch and router vendor to be pitching an SDN story, arguing why the technology won't commoditize their markets. They could be right, but Marshall is probably correct in saying that a growing chunk of the business will be directed at customers who wouldn't mind a commoditized market. Vendors have to play along with SDN, but SDN isn't necessarily their friend.

— Craig Matsumoto, Managing Editor, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Light Beer
12/5/2012 | 5:34:08 PM
re: Adding Up the SDN Effect

The boogeyman for hardware has a new face ... and it is real and getting comfortable in Cisco's closet. Will be scary when it comes out.

Pete Baldwin
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:34:08 PM
re: Adding Up the SDN Effect

That's a good way to put it.

I do think there's credence to Dave Ward's talk about SDN and Cisco, how the increased importance of policy and analytics can give Cisco a wider role in the network.

But, there's a growing customer segment that doesn't care about any of that, and just wants a really fast switch that it can have greate control over.

I don't think SDN means the end of Cisco, just as Huawei hasn't meant the end of Cisco. But like Huawei, SDN has the potential to make life uncomfortable for everybody in the sector.

(David Ward link: )

User Rank: Light Beer
12/5/2012 | 5:34:03 PM
re: Adding Up the SDN Effect

It's a storm in a tea cup really... thats SDN in a nutshell

From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Centec on Ethernet Switching

11|26|15   |   09:58   |   (0) comments

Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (10) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (2) comments

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Samsung: No Sale of Wireless Unit
Dan Jones, Mobile Editor, 11/25/2015
How Might Open Source Fail?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/24/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
Networking Shines in HP's Gloomy Final Earnings
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Cats with Phones
Can't Find the Phone on Thanksgiving? Click Here
Check under the cat! (hint: bottom right)
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.