Light Reading made an interesting point yesterday in commenting about this year’s Interop show. I’ve been to Interop in the past, and it’s always been the bastion of Big Network Iron. Now it may be about to show its softer side, if you believe the advance comments on keynotes and vendor announcements. Trade shows drive hype more than they drive the industry, but a virtual change in Interop could presage something big if it really develops. But could it be that virtual players will threaten real ones? That’s not so sure.
As I noted in a blog I did on Metaswitch’s virtual IMS (an interview with LR on that development was also on their site), virtualization as a mechanism for radically reducing the unit cost of functionality is still a hope more than a predictable outcome. There are many examples of purpose-built gear for residential and light business use where hardware prices of fifty bucks can be sustained. It’s hard to imagine hosted functionality of the same level being priced much less, and it’s completely unknown whether such a framework can be operationalized. But while we can’t expect that just transplanting network functions into the IT world will save a zillion bucks, we can presume it would do some interesting things, and these might have the effect of empowering some players and disemboweling others.
The functions that would be easiest to switch to hosted form would be the higher-layer functions involving things like security, VPNs, or application performance management. Many vendors, including Cisco and Juniper, hoped to pull these functions into smarter edge devices to increase their value and differentiability. If they’re hosted on servers instead, the result isn’t a reduction in the number of edge routers sold, but a reduction in the price per router. We might see a “unit of edge functionality” that would have cost ten grand in the vendors’ smart-edge model costing nine in the new model, but two of that nine might then go to hosting and software, which would reduce vendor sales by 30% unless they got the hosting/software deal.
More complex higher-layer functionality like content delivery (CDN) and the components of mobile infrastructure (IMS, EPC) could create even more impact. Both CDN and IMS/EPC are sold in package form today, and there are open-source and cloud-based commercial versions of all of the stuff already. A major thrust toward open-source IMS, driven in my view more by the potential efficiencies of a properly designed/componentized software framework than by the fact that the software is “free”, would undermine Alcatel-Lucent, Ericsson, and NSN who rely a lot on IMS/EPC supremacy to pull through their overall mobile/metro solutions.
In the data center, I don’t think that SDN or virtualization is as much a threat as an opportunity. No matter how many vSwitches you deploy, you don’t switch squat unless you have something real underneath that can carry traffic. From the first, Nicira’s papers on the topic always made it clear that you might actually need to oversupply your data center network with bandwidth since virtual overlay traffic can’t be managed on a per-switch, per-trunk basis for optimized flows. But what you can do in the data center is create a whole new model of how applications are deployed, a model that would transform our notion of security, application performance management, load balancing, and more stuff. Each of these transformations is an opportunity for a far-seeing vendor, legacy or emerging. If these transformations could be pulled out of the data center and extended to the branch, they would transform both carrier Ethernet networks and enterprise networks. HP and Dell would be potentially big winners, or losers, in this changing of the guard.
Then there’s metro. Metro will be the beneficiary of more incremental dollars than anywhere else, and more dollars means more changes could be made to create a transformation or revolution. I pointed out before that we could add tens of thousands of new data centers to host network features. These are green fields, open to any new architecture, and that’s more opportunity than all the enterprises on the planet will generate. Metro is where all this virtualization will come home, literally, because whatever we know about services, one thing that’s clear is that you have to couple features to them at the customer edge where it’s easy—not in the core where it’s hard.
The key point in all of this, though, is the “R” in the “ROI”. As I said, simple cost management, even improvements in operations costs, are not going to revolutionize the network because they have too slow an uptake in a modernization cycle. You need some prodigious benefits, which means significant revenue, to create enough return to justify a major transformation. IaaS isn’t going to cut it. SDN isn’t going to cut it. This is an applications-and-services revolution that is funded because we figured out how to transform the services of the service providers and the productivity of the enterprises. So it’s not really Interop we need to be looking at to read networking’s tea leaves, it’s some yet-to-be-launched show that talks about what Apple and Google might talk about, but in carrier and enterprise terms. Services, in the end, are what we perceive to be in our hand, and what we can do with those things.