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SDN

1. Present a clear Vision about how your SDN technology benefits customers, including those with legacy network infrastructure.

2. It is VERY early days for SDN – the market will evolve, you will need to evolve your marketing with it.

3. Have a Positive Message – how SDN will help IT (as opposed to what is wrong with SDN or existing networks).

4. Speak in Business Value terms (how does it benefit your customers) – the best technology does not (usually) win.

5. The majority of IT buyers want Solutions – not APIs.  Create an ecosystem to help provide this (e.g. ISVs, channel, professional services partners).

6. Highlight a Use Case or 2 – SDN needs examples of business (IT) value implementations by real (paying) customers.

7. Don’t (just) target the bleeding edge – have a plan to reach the broad business IT market via channels, ISVs, IT partners, etc.

8. Reducing Network Operational Costs (OPEX) is critical for most IT buyers – place a strong emphasis on your security and network management tools.

9. Target Market Differentiation – if targeting more than one customer type (Enterprise vs. Telecom) or use case (WAN vs. DC) – have a distinct marketing message for each.

10. Don’t swim upstream – by trying to create a “new” unique category that (only you supply).

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Company Overview

Big Switch is an OpenFlow pioneer and one of the leading platform-independent software-defined networking vendors. Big Switch was founded in 2010 by Guido Appenzeller, who led the Clean Slate lab at Stanford. The company’s Open SDN platform leverages industry standards and open APIs that enable customers to deploy flexible networking applications, including data center network virtualization. It released its Floodlight controller as open-source in early 2012 and has over 7,500 downloads to date of its controller and APIs.

New Funding

On October 31, 2012 Big Switch received $25 million in Series B funding from new investors Redpoint Ventures and Goldman Sachs. The Palo Alto-based company will use the cash to add to its engineering staff. Existing backers Index Ventures and Khosla Ventures also participated in this round.

Ecosystem

Big Switch has a broad ecosystem of partners to insure interoperability with existing network infrastructure and to help develop new applications to leverage its OpenFlow development.
Big Switch has broad interoperability support with network products including Arista, Brocade, Dell, Extreme, HP, IBM, Juniper and hypervisors including VMware, Microsoft, Citrix and Red Hat.
Security and Layer 4-7 partners include F5, Palo Alto, Radware, Fortinet, V-Armour, A10, and Coraid.

New Product Announcement

On November 13, 2012, Big Switch made 3 product announcements:

• Commercial availability of its OpenFlow Controller (Big Network Controller)
• An OpenFlow application that dynamically provisions virtual network segments (Big Virtual Switch)
• An application that improves monitoring and management of OpenFlow (Big Tap)

Impact on the SDN Market

The Big Switch announcement brings the concrete benefits of OpenFlow to enterprise IT. It provides both CAPEX (e.g. increased VM densities) and OPEX (e.g. improved network monitoring capabilities) benefits for enterprise networks and cloud data centers.

Doyle Research believes that SDN adoption will be driven by the applications that provide specific improvements to customer networks. Big Switch introduced 2 applications that clearly demonstrate the value of SDN/OpenFlow. Big Virtual Switch will reduce the time to provision public and private data center networks and allow for increased VM densities. Big Tap offers much needed virtual monitoring of OpenFlow switches.

Big Switch has a strong ecosystem that will deliver many more valuable OpenFlow applications to its customers, including security (e.g. firewalls), server load balancing, WAN optimization, and network management. Its partnership with many leading universities is likely to yield many more diverse OpenFlow applications. Big Switch’s ability to work with a wide range of VM environments, legacy switch infrastructure, and the emerging OpenFlow ecosystem make it a strong supplier for those organizations looking to implement OpenFlow.

There is no question that the SDN arena is a hotbed of new ideas, well funded start ups, and established vendor SDN plans. However, there is a significant question about how big (in terms of revenue) the SDN market will be in the future.  VMware’s $1.2B acquisition of Nicira (an SDN start with minimal current revenues) speaks volume about the potential market size.

Definitions

The 1st challenge of sizing any market is defining what is and what is not included in the market.  For some markets (e.g. PCs), this may be relatively straightforward.  For SDN, definitions are complex and evolving.  For example, everyone includes OpenFlow controllers in SDN – but they tend to disagree on the rest.

Here is my short list of market factors for a SDN forecast:

  • Enterprise vs. Telecom.  These are 2 very different markets with enterprise SDN focused on public and private cloud data centers.  SDN’s impact on the telecom market will include a wide range of optical, 4G wireless, and OSS/BSS technologies.
  • Software, Hardware, and Services.  Everyone includes software as part of software defined networking.  And this software needs to run on specialized or general purpose (new) hardware that supports SDN (e.g. OpenFlow controllers).  But what about Ethernet switches or routers that now support OpenFlow?  Services is another important market in terms of size (over 20% of the enterprise network HW market).  Professional and support services will no doubt be a big part of the SDN opportunity in the future.
  • Layer 2-7.  Ethernet switches, routers, server load balancers, WAN optimization, SSL acceleration, IP VPNs, firewalls, etc. are all part of a potential SDN stack.  A sizing must define which of these functional markets to include.

Related Markets

Growth in public cloud services is a primary driver of the massive expansion of hyper-scale data centers (and the resulting need for SDN technology).  Enterprise adoption of private clouds in their data centers will likewise impact the need to change the underlying network to SDN technology.  Therefore, any SDN forecast will need to identify specific assumptions related to the growth of public and private cloud.

Conclusion

The SDN market can be sized by using appropriate market definitions and assumptions.  Demand will 1st be driven by hyper-scale data centers built by public cloud providers.  Additional demand will be generated over time by private cloud data centers and changes in campus/branch network architectures.   The SDN ecosystem will take time to develop especially for software applications and services.

So how large is the SDN market opportunity?  According to Doyle Research, the market for Enterprise SDN software and new hardware (including Layers 2-7) will be $1.6B by 2017.

Please contact ldoyle@doyle-research.com for your customized SDN forecast.

Visit doyle-research.com for more information