How Buyers See New Network Choices

Networking is changing, in part because of demand-side forces and in part because of technologies.  The question is whether technology changes alone can have an impact, and for that one I went to some buyers to get answers on how they viewed some of the most popular new technology options of our time.  The results are interesting.

One of the most interesting and exciting (at least to some) of the SDN stories is the “white box” concept.  Give an enterprise or a service provider an open-source SDN controller, OpenFlow, and a bunch of “white box” generic/commodity switches and you have the network of the future.  Since “news” means “novelty” rather than “truth” it’s easy to see why this angle would generate a lot of editorial comment.  The questions are first, “Is it true?” and second, “What would it actually mean?”

The white-box craze is underpinned by two precepts.  First, that an open-source controller could create services using white-box switches that would replicate IP or Ethernet services of today.  Second, that those white-box switches would offer sufficiently lower total cost of ownership versus traditional solutions to induce buyers to make the switch.  The concept could deliver, but it’s not a sure thing.

Buyers tell me that in the data center the white-box concept isn’t hard to prove out.  Any of the open-source controllers tried by enterprises and operators were able to deliver Ethernet switching services using white-box foundation switches.  This was true for data centers ranging from several dozen to as many as several thousand servers.

However, buyers were mixed on whether the savings were sufficient.  Operators said that their TCO advantage averaged 18%, which was they said less than needed to make a compelling white-box business case if there was already an installed base of legacy devices.  Most said it was sufficient to justify white-box SDN in new builds.  Enterprises reported TCO benefits that varied widely, from as little as 9% to as much as 31%.  The problem for enterprises was that they had little expectation of new builds and most set a “risk premium” of about 25% on major technology changes.  Thus most enterprises indicated that they couldn’t make the business case in the data center.

Outside the data center it was even more negative.  Only 8% of operators’ projects outside the data center were able to even match the data center’s 18% TCO benefit, and operators expressed concerns that white-box technology was “uproven” (by a 2:1 margin) or offered too low a level of performance (by 60:40) to be useful at all, savings notwithstanding.

Interestingly, virtual switching/routing fares a lot better outside the data center.  Almost 70% of operators thought that virtual switching/routing could if hosted on optimal servers deliver at least 20% TCO benefit relative to legacy devices.  For enterprises the number was just over 75%.  Inside the data center, both operators and enterprises believed vSwitch technology could reduce their need to augment data center switching substantially (offering savings nearly 40% in TCO) but they didn’t see it displacing current switches or eliminating the need for new switches if new servers were added.  The consensus was that vSwitches were good for VMs, not for servers.

Operators believe that agile optics can supplement vSwitch technology and selected white-box deployments to displace as much as 70% of L2/L3 spending by 2025.  This suggests that white-box SDN and virtual switching/routing is best employed to supplement optical advances.  They see white-box data centers emerging more from NFV deployments, interestingly, than they do from directly driven SDN opportunities.  The reason seems to be that they believe NFV will generate a lot of new but smaller data centers where white-box and virtual technology is seen as suitable in performance.

Buyers are in general not particularly enthusiastic about white-box support or vendor credibility.  Three out of four enterprises and almost 90% of operators think their legacy vendors are more trustworthy and offer more credible support.  Virtually 100% of both groups think that they would want “more contractual assurances” from white-box vendors to counter their concerns about reputation and historicity.

What about white-box devices from legacy vendors.  Almost half of both buyer groups think that will “never happen” meaning no chance for at least five years.  Everyone saw legacy vendors entering the white-box space in earnest only when there was no option other than to lose business to others.  Nobody saw them as being leaders, though almost all buyers say that they can get SDN control for legacy devices from their current vendors.

Another option that generates mixed reviews is the overlay SDN model popularized by Nicira (now part of VMware).  While nearly all network operators and two-thirds of enterprises see benefits in overlay-based SDN, they’re struggling to assign an economic value to their sentiment.  The most experienced/sophisticated buyers in both groups (what I call the “literati”) believe that virtual-overlay technology combined with white-box basic physical switching in the LAN and agile optics in the WAN.  They say that the potential benefits are not promoted by vendors, however.

Interestingly, both network operators and enterprises are more hopeful about the Open Compute switching model than about white-box products based on SDN.  Almost 80% of enterprises say they would purchase OCP switches from “any reputable vendor” and almost 70% say they would buy commodity versions of these products.  Operators run slightly lower in both categories.  The difference, say buyers, is that OCP is a “legacy switch in a commodity form” where white-box SDN switches are based on a “new and less proven” technology combination.

What I get from all of this is that buyers need a more holistic statement of a new switch/routing paradigm than they’re getting.  It would seem that a combination of white-box physical switching and overlay SDN might be very attractive, but in the main buyers don’t see that being offered as a combination and they see do-it-yourself integration of two less-than-proven technologies as unattractive.  They’d love to see a major computer vendor (HP or IBM) field that combination; they’re not convinced that network giants will do that, and they’re still a little leery of startups, though less so than they’d been in the past.

The lesson is that there’s no such thing as a “point revolution”.  We have to expect rather significant and widespread change if we’re going to see much change at all, and users need a lot of reassurance about new technologies…and new partners.