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Network Evolution and Market Outlook
March 2017
Rohit Mehra
Research Vice President, Network Infrastructure
Agenda
§  Digital Transformation (DX): Need for Scale
§  Datacenter Networks- Impact from the
Growth of Cloud
§  Telecom Network Evolution
§  Enterprise Networks
•  SD-WAN & Cloud Apps
§  Final Thoughts
Organizations adapt to changes in their ecosystem by leveraging digital
technologies to create digitally enhanced, customer centric business models.
Create new
customer
experiences
Generate
new revenue
streams Rapidly
respond to
changing
conditions
Improve
operational
efficiencies
In this Digital Economy...
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 3
Source: IDC
The Move to Digital Transformation
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Digital Transformation is Everywhere
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Sleep Number®
Mattresses
Sirona 3.8
Biogeneric Dental
Impression
System
Not a dental
scanner, but a
revenue center
Orthodonture platform
Not a bed, but a
cloud-connected
comfort and
fitness platform
Airbus A380
Not an airplane,
but a flying
datacenter
700+ applications
Cloud and IoT Driving Need for Scale
Disruption Landscape
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Last October, Volvo
declared that it would pay
for any injuries or property
damage caused by its fully
autonomous IntelliSafe
Autopilot system, which is
scheduled to debut in the
company's cars by 2020.
Crowd Sourcing Experience Industry Cross over
Communities reduce
design times significantly
3D printed
§  BforBANK provides people
with a rich, interactive
experience and the same
tools as an asset manager
§  Helps people to become their
own money managers; their
own private bankers.
§  More than €3 billion in
deposits in four years
Leadership
Transformation
Omni-Experience
Transformation
Information
Transformation
Operating Model
Transformation
WorkSource
Transformation
19%of total DX
technology
spending in 2015
49%of total DX
technology
spending in 2015
3%
of total DX
technology
spending in 2015
1%of total DX
technology
spending in 2015
28%
of total DX
technology
spending in 2015
Today the Emphasis is on Experience and
Operating Models – the Digital Enterprise
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$1.3T will be spent on
DX Initiatives in 2016
Leadership
Transformation
Omni-Experience
Transformation
Information
Transformation
Operating Model
Transformation
WorkSource
Transformation
25%
of total DX
technology
spending in 2020
33%of total DX
technology
spending in 2020
38%of total DX
technology
spending in 2020
3%
of total DX
technology
spending in 2020
1%of total DX
technology
spending in 2020
By 2020, We Move From Building the Digital Enterprise
to Building the Information-Based Enterprise
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The Digital Divide is Developing
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AD HOC
OPPORTUNISTIC
REPEATABLE
20%
34%
28% Digital Player
Digital Explorer
Digital Resister
12% MANAGED
OPTIMIZED5% Digital Disruptor
Digital Transformer
Source: IDC, Digital Transformation MaturityScape Benchmark, 2016. n=413
Showing the % of organizations in the world at each stage of Digital Transformation
DATACENTER/CLOUD:
NETWORK EVOLUTION
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Public cloud has major and growing impact
on datacenter networking in 2016
§  Growth of major public-cloud
players, led by hyperscale,
commands greater attention
from the networking supply
chain, from vendors of
Ethernet merchant silicon to
ODM and OEM switch
vendors.
§  Innovations in the public cloud,
from containers to ODM
switching and network
disaggregation, are gradually
making their way to the
broader market.
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Datacenter (Ethernet) switching expenditures by public cloud players will grow to nearly
$5 billion in 2020 delivering on scale and agility that enterprises can learn from
Public Cloud Datacenter-Network Spending
Reaches $4.6 billion in 2017
§  In 2021, public cloud exceeds spend on traditional
when it comes to overall DCN deployments
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$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Billions
Traditional DC Public Cloud Private Cloud
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Billions
Enterprise Communications SP Cloud Provider
WW Datacenter Networks Market by
Deployment Type, 2010-2020
13
Source: IDC’s Worldwide Datacenter Networks Qview
Cloud Drives Increasing Growth for 100GbE
§  Demand from cloud
providers increasingly
affects switch port-
shipment mix for
datacenter networks
§  Leaf-spine networks
proliferate in large cloud
datacenters
§  In 2016, 100GbE
shipments exceed
700,000 ports, grow to
nearly 10.5M ports in
2020
§  10GbE switch-port growth
plateaus during forecast
period
14
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Primary Use Cases for SDN and
Network Virtualization
§  Drivers are increased server virtualization and
adoption of 3rd Platform, especially cloud
§  Primary use cases are . . .
•  Business and Operational Agility – automate and
accelerate network provisioning, speed service
delivery
•  Security – microsegmentation to provide east-west
security in virtualized datacenter, security analytics
•  Business continuity/disaster recovery
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Agility, Automation and Programmability,
Datacenter Security Key SDN Motivators
Q2. If you are implementing SDN, which of the following factors is the primary motivation?
30.7%
22.7%
22.7%
12.0%
4.0%
4.0%
2.7%
1.3%
22.9%
22.6%
28.7%
10.1%
9.2%
3.7%
1.8%
0.9%
0% 5% 10% 15% 20% 25% 30% 35%
Need the network to have more agility to support
virtualization and cloud
Require better automation and programmability of
network for operational efficiency (OpEx gains)
To improve security in the datacenter (such as
microsegmentation)
Use SDN to address VLAN sprawl and complexity
Increase speed for provisioning the infrastructure
for application workloads
More easily scale the network to support various
and growing workloads
Use SDN to lower CAPEX (initial investment
costs in network hardware)
Simplify moves, adds, changes and
decommissions
Cloud Provider (N=75) Enterprise (N=327)
Source: SDN Survey, IDC, September, 2015
16
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WW Datacenter SDN Revenue 2020
Segmented – $12.5 Billion
SDN
Applications
28%
Physical
Networks
30%
Virtualization/
Control
19%
Professional
Services
23%
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Open-Source Networking: Vendors Must
Look for Sustainable Value Creation
§  Community counts, it will decide winners
and losers
§  Traditional SPs leverage open-source
networking for cost savings, operational
efficiencies, scale their businesses cost-
effectively
§  Vendors must integrate with open source/
open systems where appropriate, focus on
areas where they can add value and
differentiate – application policy, analytics,
enhanced-management software, and
security
•  Not just bottom of the networking stack
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18
Network Disaggregation Gets
MindshareQ23. As part of your network architecture, have you considered a hardware-agnostic, third-party network operating system, such as one from
Cumulus, Pluribus, Pica8 or Big Switch?
53.3%
37.3%
9.3%
44.0%
43.1%
12.8%
0% 10% 20% 30% 40% 50% 60%
Yes
No
Not aware of this solution
Cloud Provider (N=75) Enterprise (N=327)
Source: SDN Survey, IDC, September, 2015
19
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ODM-Direct (White box) Switching Grows,
Sees Limited Enterprise Adoption
§  ODM-Direct (White box) switches surpass $900
million in 2017, driven primarily by demand from
hyperscalers, public cloud, and some large
service providers.
§  ODM-Direct switches fail to make meaningful
headway in enterprise datacenters or campus
deployments in 2017.
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ODM Direct Market Shares by Revenue,
2015 & 1H16 (%)
Celestica
32.0%
Quanta
31.0%
Delta
27.3%
Accton/
EdgeCore
9.5%
2015
Source: WW Datacenter Networks Qview
21
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Celestica
29.5%
Quanta
27.4%
Accton/
EdgeCore
24.3%
Delta
18.1%
Others
0.7%
1H16
Network Disaggregation: Value
Proposition, Addressable Market
•  Savings on CapEx, OpEx, biz and operational
agility
•  Run NOS on standardized network hardware provided by
multiple vendors
•  Simplified management
•  Reduced vendor lock-in
•  Reduced software/maintenance costs
•  Addressable market:
•  Large datacenters and/or datacenters that are critical to
business success (faster service delivery, agile delivery of
new services, etc.)
•  Datacenters where network changes occur relatively
frequently
•  Linux, DevOps shops, even relatively small ones
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Brilliant Box: Enterprise Interest Not
Converted Into Enterprise Adoption
§  Enterprises are interested in brilliant box (OEM and
ODM switch hardware paired with third-party
network operating systems)
•  But interest has not translated into deployments
§  Challenges are mainly non-technical
•  Enterprise skill sets (Linux in networking department)
•  Cultural factors
•  Service and support
§  Some technical challenges
•  Hardware-reliability concerns
•  Software needs to be modular,
composable
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TELECOM NETWORK EVOLUTION
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Digital  Experience  in  Telecom:  The  Shi5
§  To DX: Customer at
the Center of the
Business
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§  From traditional:
Network at the Center
of the Business
Network
Network
Service
Omni-channel
Multi-service
IP/Optical
Virtualization
Existing &
New Services
CSP (Wireline and Wireless)
Network Transformation Goal
26
Programmable, Intelligent,
Automated, Open
2020 Highly Automated Networks
REALIZE NEW ADDITIONAL REVENUE STREAMS
30-40 %Network Utilization 60-80 %Network Utilization
Custom, Complex, Costly, Closed
Static Networks 2014
Source: IDC, September 2016
Worldwide Telecommunications 2017
Predictions	
  
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   27	
  
Source:	
  IDC	
  FutureScape:	
  Worldwide	
  TelecommunicaAons	
  2017	
  PredicAons,	
  IDC	
  #US40848516,	
  November	
  2016	
  #IDCMWC16	
  
@erainge	
  
Note: The size of the bubble indicates complexity/cost to address
§ Non-telecom services revenue gaining momentum: MNS, hosting,
cloud, prof. services, security
§ Capex declined by 3.1% to $316.6B in 2015; biggest decline
since 2009 economic slowdown
§ Mobile voice increasingly becoming commoditized due to
saturation & fierce competition, growth driven by mobile data
§ Blended ARPU drivers: Competition, migration to shared data
plans, economic factors
§ Wireline services revenue declines in every market despite
growth in broadband revenue
§ Enterprise: Strong demand for VPNs, cloud, and steady growth
of collaborative services; regional CSPs finding niche success
Global
Wireless
Wireline
CSP Market Trends
28
CSP: Key Networking Priorities today
§  Retire legacy TDM network infrastructure and converge
access, aggregation, and edge networks to packet
optical and IP routers
§  Support multiple services such as Ethernet data, video,
MPLS VPN, cloud connect, and broadband Internet on
a converged IP network infrastructure
§  Develop new NFV-based virtual network services for
greater service agility and efficiency.
•  SD-WAN and vCPE
§  Enhance capacity in network core, edge and DCI to
accommodate the high growth rate in data applications,
converged networks, and higher bandwidth services
§  Prepare for 5G!
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Worldwide Capex Spending Forecast
(Wireline and Wireless)
30
Source: Capital Expenditure Report, 2015-2020: Spending on ICT, Convergence Technology Continues to Be a Key Focus for CSPs (IDC
#US41401116, June 2016)
§  Converged IT infrastructure spending increases
§  White Box Switching, 400Gbps Ethernet
§  4G/LTE – Radio Access + Mobile Packet Core
§  5G Infrastructure
§  Software Platforms (analytics, automation, orchestration)
§  Converged Packet Optical/IP Routing
CSP Infrastructure Virtualization Outlook
Unified Integrated
Network
Data
centers
Mobile Core
Network
Datacenters
Business
Services
Network
Cloud
Isolated
31
Operations of NFV
IT & Network Priorities for Hybrid Environment vary
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Which capabilities are priorities for investment to enable you to manage virtual and hybrid
services and network? 1= Lowest, 5= Highest
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
IT Respondent
Multi-technology, vendor agnostic OSS
Unified orchestration managing multiple orchestrators
Centralized orchestration, as a single system
Automated on-boarding of multi-vendor VNFs
Service creation capabilities
Near real-time, integrated view
Dynamic, real-time monitoring and assurance
Staff skills for NFV-based services
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
Network Respondent
Multi-technology, vendor agnostic OSS
Unified orchestration managing multiple orchestrators
Centralized orchestration, as a single system
Automated on-boarding of multi-vendor VNFs
Service creation capabilities
Near real-time, integrated view
Dynamic, real-time monitoring and assurance
Staff skills for NFV-based services
Lower
importance
to Ntwk
Highimportance
toIT
Lower
importance
to IT
Higherimportance
toNetwork
Source: IDC
Virtual Network
Functions
VNFs orchestrated and managed on abstracted
commodity hardware
Commodity servers
Commodity switches
Commodity storage
Classical Physical Network
Function (PNF) or Appliance
approach
Virtual Network Function (VNF)
approach
The Core and Edge are moving to
Virtual Network Functions
Source: IDC, Feb 2017
NFV Plans: Timeline
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2015-early 2017:
§  Customer premise
equipment,
especially for
business customers
§  Evolved packet core
§  IMS linked to VOIP/
VoLTE
2017-2020:
•  Edge
•  IP Core
•  IMS
•  RAN/cloud RAN
•  EPC
Next 6 to 10+
years:
•  Limited visibility
•  Issues of reach,
DevOps are
expected to get
resolved,
automation
vCPE
1st
Virtual/Cloud-Managed Enterprise CPE
§  Move enterprise network functions from on-premise,
physical appliances to virtual, cloud-managed
•  Consolidates branch network technologies into one appliance/
platform running multiple VNFs
§  Provides simplicity, scalability, redundancy, and agility
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IP or MPLS based
Service Provider
Network
SP Datacenter/
Cloud Platform
Enterprise	
  Branch	
  Loca:on	
  
vCPE	
  
Evolution of Managed Services
Software Defined WAN Network Function Virtualization
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§  Transport agnostic
§  Manage App not CPE
§  Agile Delivery
§  Replace expensive CPE
§  On-demand service pricing
§  Manage virtual appliances (firewall, WanOp)
CSP SD-WAN – A Key Disruptor
§  Key WAN challenges:
•  Security, Delivering SaaS, Managing connectivity
•  Almost 50% of Apps accessed via Internet
§  Top SD-WAN use cases:
•  Multiple WAN providers, increased reliability, direct
SaaS provider access
§  Key SD-WAN components:
•  Security, WAN Optimization, Policy Control,
Automation
•  Vendor vs CSP SD-WAN solutions preferred (typical
of early stage)
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38
Getting ready for 5G: Network Slicing
Source: IDC, Feb 2017
§  5G will require Carriers to deliver diverse use cases spanning the
latency and bandwidth spectrum
§  Network Slicing is key to this delivery
5G Ecosystem and Technology Enablers
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LTE Advanced Evolution
Narrowband LTE
New Radio (NR)
Next Gen Core
Multi RAT Integration and management
mmWave
Massive MIMO and beamforming
Densification
Management and Orchestration
Open Source
Network Function Virtualization (NFV)
Software Defined Networks (SDN)
Network Slicing
Tactile Internet
Mobile edge Computing
Virtual and Augmented Reality
Artificial intelligence
Cloud
Big Data and Analytics
5G Ecosystem
Innovations in Open Source
Collaboration
§  Robust collaboration for CSP Operations
•  CSP-led industry consortia
•  Commercial supplier ecosystem programs
•  Projects emphasize Enterprise business services
§  Next phases will see consolidation of numerous
approaches
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Networks	
  2020:	
  Compute	
  Everywhere,	
  
Common	
  Access	
  
	
  
CSPs	
  will	
  deploy	
  
compute	
  resources	
  
on	
  all	
  levels	
  of	
  the	
  
network	
  to	
  
support	
  their	
  
internal	
  funcAons	
  
and	
  services	
  for	
  
their	
  customers	
  	
  
Services	
  will	
  uAlize	
  
any	
  access	
  means	
  
available,	
  
governed	
  by	
  
network	
  and	
  
customer-­‐centric	
  
policies	
  
	
  
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   41	
  
SoWware	
  
Common	
  Infrastructure	
  
Distributed	
  
SDDC	
  
Flexible	
  
Converged	
  
Transport	
  
5G	
  Radio	
  
Fixed	
  
Access	
  
Edge	
  	
  
CompuAng	
  
VNFs	
  
NG	
  
OSS	
  
Virtualized	
  
Core	
  
Common	
  	
  
Access	
  
Big	
  
Data	
  
#IDCMWC16	
  
@ehalilovicidc	
  
ENTERPRISE NETWORK EVOLUTION
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Enterprise Network Infrastructure Trends
§  Introduction of SDN for the campus
•  Powered through enterprise NFV
•  LAN and WLAN offerings
§  Cloud-managed networking offerings
grow
•  Metered networking
•  Customer trust and desire for cloud grows
§  Practical obsolescence of 802.11n WLAN
beginning in some markets
§  SD-WAN poised to shake up market
•  Connects edge to datacenter in new ways
•  Sets the stage for cloud-managed/virtual
CPE
§  M&A and consolidation
§  Industry ecosystem partnerships
•  To compete with #1 and #2 vendors
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Mobility Meets Cloud in Virtuous Circle
Internet
Cloud Services
§ Management
§ Provisioning
§ Security
HQ Branch Offices, Remote
Sites, Mobile Workers
Private
Cloud/
Datacenter
Regional
Offices
Cloud Apps/SaaS
§ CRM
§ ERP
From Retail to Education to Healthcare, Enterprise IT is being challenged to
provide mobile access to cloud-based business and consumer applications
44
What Does the Digital Workplace
Require?
§  Mobile-first network design
•  Wireless is becoming primary access
method for enterprise networks
§  Latest Standards
•  Wave 1 vs. Wave 2
•  Emerging multi-gigabit Ethernet
§  Right mix of cloud services
§  Infrastructure convergence
•  Wired and Wireless
§  Optimization of network
intelligence
12
Key Use Cases That Heighten Need for
Network Transformation
46
Enterprise
Network
© IDC Visit us at IDC.com and follow us on Twitter: @IDC
§  Continued adoption of mobile apps
and mobility-first architectures
§  Proliferation of collaborative (UC&C)
apps, including video conferencing
§  Optimized Access to Cloud Services,
including SaaS/Cloud providers
§  Simplified deployment/provisioning of
branch sites/applications
§  Rapid Response to Security threats
and vulnerabilities
Cloud Brings Changes to the WAN
Driving Need for SD-WAN
Q. You mentioned that you currently use cloud IaaS and/or SaaS. What changes have you made or do
you expect to make to your WAN as a result of your organization's cloud computing usage?
0% 10% 20% 30% 40% 50% 60%
Increase access bandwidth (bandwidth from individual
sites into the network)
Increase core network bandwidth (bandwidth across the
WAN or VPN backbone)
Extend your network to the cloud provider(s) so the cloud
service appears within your private network
Use a quality of service (QoS) mechanism on your
network
Change your main WAN/VPN network service provider
Deploy WAN optimization or acceleration technology
No changes as a result of using cloud services
N=644
Base=Respondents currently using IaaS/SaaS cloud computing services/technologies
Source: U.S. Enterprise Communications Survey, IDC, December, 2015
47
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Defining SD-WAN
§  Hybrid WAN
A hybrid WAN includes at least two WAN connections from
each branch office, leveraging two or more different access
technologies (MPLS, broadband Internet, 4G/LTE, etc.).
§  SD-WAN
SD-WAN leverages hybrid WANs, but includes a centralized,
application-based policy controller; analytics for application
and network visibility; a software overlay that abstracts and
secures underlying networks; and an optional SD-WAN
forwarder (routing capability) that together provides intelligent
path selection across WAN links, based on application policies
defined on controller.
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Demand Drivers for SD-WAN
§  Enterprise WANs are costly
and complex to manage
•  15% of IT budgets
§  40-60 % of enterprise data
traffic is migrating from WANs
to the internet
§  Cloud drives requirement for
increased WAN agility and
flexibility
•  Use of different networks
(Internet broadband, 4G/LTE,
MPLS)
•  Automated provisioning
•  Specification and prioritization of
network connection on per-
application basis
•  Improved visibility
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Key SD-WAN Considerations
Q. Which of the following attributes of an SD-WAN service or solution are the most important considerations when
choosing an SD-WAN solution for branch office connectivity? Rank order from 1 to 5 with 1 the most important.
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Flexibility to add/change bandwidth capacity in near real-
time
Flexibility to use different networks (e.g., Broadband,
MPLS, LTE) for application delivery
Lower WAN transport costs
Faster turn up (WAN provisioning)
Prioritize network connection by application type or
workload
Policy-based intelligent path selection
Optimizing WAN traffic by latency, jitter, packet loss
Reduce dependency on the MPLS network
Reduce WAN-management complexity
Self-service portal
Total
N=744
Base=Respondents indicated organization plan to migrate existing WAN/network connections to a SD-WAN alternative within or more 2 years
Notes:
Source: U.S. Enterprise Communications Survey, IDC, December, 2015
50
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Nearly 70% Expect to Use SD-
WAN in Next 18 Months
Q. Does your organization currently use or plan to use SD- WAN?
0% 5% 10% 15% 20% 25% 30% 35%
Currently use
Plan to use in the next 12 months
Plan to use in 12-18 months
No plans to use
N = 605
Base=All Respondents
Notes: Managed by IDC's Quantitative Research Group.; Data Not Weighted; Use caution when interpreting small sample sizes.
Source: Software-Defined WAN (SD-WAN) Survey, IDC, April, 2016
© IDC Visit us at IDC.com and follow us on Twitter: @IDC
51
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 52
Source: IDC, 2016
Pure-play SD-WAN SolutionsWAN Infrastructure, WAN Optimization-
based SD-WAN Solutions
Emerging
SD-WAN
Market
Landscape
Cloud-managed SD-WAN ServicesManaged CSP SD-WAN Services
§  Cisco
§  Riverbed
§  Silver Peak
§  Juniper
§  Citrix
§  ALU/Nuage
§  Viptela
§  CloudGenix
§  VeloCloud
§  Versa Networks
§  Cybera
§  Talari
§  VeloCloud
§  CloudGenix
§  Riverbed
§  Versa Networks
§  Aryaka
§  Verizon
§  BT
§  Telstra
§  Orange Business
§  CenturyLink
§  SingTel
§  COLT
Emerging SD-WAN Landscape
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 53
*Source: Cloud and Drive for WAN Efficiencies Power Move to SD-WAN (IDC Doc #US41101416)
SD
WAN
§  SPs will leverage SD WAN
opportunity to offer value
added services around
applications, cloud connectivity,
bandwidth, orchestration
§  Important go-to-market strategy
for SPs to address on-going
MPLS market transformation
§  Opportunity to compete in SD
WAN market - forecast to grow
to $6 billion in 2020 (with a
93% 2015-2020 CAGR)*
Worldwide SD-WAN Equipment & Services
Revenue Explodes
Renaissance of [Campus Network]
Virtualization
§  Interest growing in virtualized converged branch
networking architectures
•  SDN ignites interest and enables network virtualization
§  “Enterprise” NFV garners attention
•  Routing, firewalling, and other functions
§  Virtualization feeds cloud-managed networking and vice-
versa- in a virtuous cycle
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 54
Enterprise Campus SDN Emerges
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 55
§  Some vendors have introduced
campus SDN solutions
•  Early adopters will be vital in
showcasing ROI/viability
§  New architectures meet old campus
challenges
•  Bandwidth/Performance
•  Application agility
•  Security
§  Datacenter SDN and SD-WAN
helping IT understand potential
benefits of Campus SDN
•  Appliance virtualization
•  End-to-end visibility
•  Automation and
programmability
Virtualized Network Appliances Viewed
Favorably
Q. Has/Will the adoption of SDN cause your organization to reassess or redeploy any of the following
physical appliances as virtual appliances (software)?
56.7
36.8
53.4
57.3
59.3
2.0
0% 10% 20% 30% 40% 50% 60% 70%
WLAN controllers
Routers
Network management appliances
Network security appliances
WAN Optimization appliances
Other
N = 240
Source: IDC Campus Network Innovation Survey, IDC, October, 2015
56© IDC Visit us at IDC.com and follow us on Twitter: @IDC
Many Delivery Paths for Cloud-
Managed Networking
Q. Who manages and operates your Cloud-managed WLAN infrastructure?
50.8
29.6
5.9
3.8
10.0
0.0
0% 10% 20% 30% 40% 50% 60%
WLAN Solution/Equipment Vendor
Major Telecom Services Provider
Third Party Managed Services Provider
Systems Integrator/VAR
Self-operated (IT Dept.)
Don't Know
N = 198
Source: IDC Campus Network Innovation Survey, IDC, October, 2015
57© IDC Visit us at IDC.com and follow us on Twitter: @IDC
Worldwide Enterprise Network
Infrastructure Forecast by Technology
58
©	
  IDC	
  	
  	
  Visit	
  us	
  at	
  IDC.com	
  and	
  follow	
  us	
  on	
  Twi6er:	
  @IDC	
  
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Billions
L2-3 Switch ADC ADCaaS Router
WLAN WAN Optimization IP Telephony Enterprise Video & TP
FC & Infiniband Switch NVO/SDN Controller
Essential Guidance
59
§  Digital Transformation is a critical
industry imperative
•  The “3rd Platform” is transforming the
network’s importance to business
§  Network transformation is a key
requirement in this evolution
§  SDN/NFV is an architectural
response to these requirements,
driven by increased cloud
adoption and the need to bring
agility to IT/Network Ops
© IDC Visit us at IDC.com and follow us on Twitter: @IDC

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Network Evolution and Market Outlook

  • 1. Network Evolution and Market Outlook March 2017 Rohit Mehra Research Vice President, Network Infrastructure
  • 2. Agenda §  Digital Transformation (DX): Need for Scale §  Datacenter Networks- Impact from the Growth of Cloud §  Telecom Network Evolution §  Enterprise Networks •  SD-WAN & Cloud Apps §  Final Thoughts
  • 3. Organizations adapt to changes in their ecosystem by leveraging digital technologies to create digitally enhanced, customer centric business models. Create new customer experiences Generate new revenue streams Rapidly respond to changing conditions Improve operational efficiencies In this Digital Economy... © IDC Visit us at IDC.com and follow us on Twitter: @IDC 3
  • 4. Source: IDC The Move to Digital Transformation © IDC Visit us at IDC.com and follow us on Twitter: @IDC 4
  • 5. Digital Transformation is Everywhere © IDC Visit us at IDC.com and follow us on Twitter: @IDC 5 Sleep Number® Mattresses Sirona 3.8 Biogeneric Dental Impression System Not a dental scanner, but a revenue center Orthodonture platform Not a bed, but a cloud-connected comfort and fitness platform Airbus A380 Not an airplane, but a flying datacenter 700+ applications Cloud and IoT Driving Need for Scale
  • 6. Disruption Landscape © IDC Visit us at IDC.com and follow us on Twitter: @IDC 6 Last October, Volvo declared that it would pay for any injuries or property damage caused by its fully autonomous IntelliSafe Autopilot system, which is scheduled to debut in the company's cars by 2020. Crowd Sourcing Experience Industry Cross over Communities reduce design times significantly 3D printed §  BforBANK provides people with a rich, interactive experience and the same tools as an asset manager §  Helps people to become their own money managers; their own private bankers. §  More than €3 billion in deposits in four years
  • 7. Leadership Transformation Omni-Experience Transformation Information Transformation Operating Model Transformation WorkSource Transformation 19%of total DX technology spending in 2015 49%of total DX technology spending in 2015 3% of total DX technology spending in 2015 1%of total DX technology spending in 2015 28% of total DX technology spending in 2015 Today the Emphasis is on Experience and Operating Models – the Digital Enterprise © IDC Visit us at IDC.com and follow us on Twitter: @IDC 7 $1.3T will be spent on DX Initiatives in 2016
  • 8. Leadership Transformation Omni-Experience Transformation Information Transformation Operating Model Transformation WorkSource Transformation 25% of total DX technology spending in 2020 33%of total DX technology spending in 2020 38%of total DX technology spending in 2020 3% of total DX technology spending in 2020 1%of total DX technology spending in 2020 By 2020, We Move From Building the Digital Enterprise to Building the Information-Based Enterprise © IDC Visit us at IDC.com and follow us on Twitter: @IDC 8
  • 9. The Digital Divide is Developing © IDC Visit us at IDC.com and follow us on Twitter: @IDC 9 AD HOC OPPORTUNISTIC REPEATABLE 20% 34% 28% Digital Player Digital Explorer Digital Resister 12% MANAGED OPTIMIZED5% Digital Disruptor Digital Transformer Source: IDC, Digital Transformation MaturityScape Benchmark, 2016. n=413 Showing the % of organizations in the world at each stage of Digital Transformation
  • 10. DATACENTER/CLOUD: NETWORK EVOLUTION © IDC Visit us at IDC.com and follow us on Twitter: @IDC 10
  • 11. Public cloud has major and growing impact on datacenter networking in 2016 §  Growth of major public-cloud players, led by hyperscale, commands greater attention from the networking supply chain, from vendors of Ethernet merchant silicon to ODM and OEM switch vendors. §  Innovations in the public cloud, from containers to ODM switching and network disaggregation, are gradually making their way to the broader market. © IDC Visit us at IDC.com and follow us on Twitter: @IDC 11 Datacenter (Ethernet) switching expenditures by public cloud players will grow to nearly $5 billion in 2020 delivering on scale and agility that enterprises can learn from
  • 12. Public Cloud Datacenter-Network Spending Reaches $4.6 billion in 2017 §  In 2021, public cloud exceeds spend on traditional when it comes to overall DCN deployments © IDC Visit us at IDC.com and follow us on Twitter: @IDC 12 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 $20.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Billions Traditional DC Public Cloud Private Cloud
  • 13. $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Billions Enterprise Communications SP Cloud Provider WW Datacenter Networks Market by Deployment Type, 2010-2020 13 Source: IDC’s Worldwide Datacenter Networks Qview
  • 14. Cloud Drives Increasing Growth for 100GbE §  Demand from cloud providers increasingly affects switch port- shipment mix for datacenter networks §  Leaf-spine networks proliferate in large cloud datacenters §  In 2016, 100GbE shipments exceed 700,000 ports, grow to nearly 10.5M ports in 2020 §  10GbE switch-port growth plateaus during forecast period 14 ©  IDC      Visit  us  at  IDC.com  and  follow  us  on  Twi6er:  @IDC  
  • 15. Primary Use Cases for SDN and Network Virtualization §  Drivers are increased server virtualization and adoption of 3rd Platform, especially cloud §  Primary use cases are . . . •  Business and Operational Agility – automate and accelerate network provisioning, speed service delivery •  Security – microsegmentation to provide east-west security in virtualized datacenter, security analytics •  Business continuity/disaster recovery © IDC Visit us at IDC.com and follow us on Twitter: @IDC 15
  • 16. Agility, Automation and Programmability, Datacenter Security Key SDN Motivators Q2. If you are implementing SDN, which of the following factors is the primary motivation? 30.7% 22.7% 22.7% 12.0% 4.0% 4.0% 2.7% 1.3% 22.9% 22.6% 28.7% 10.1% 9.2% 3.7% 1.8% 0.9% 0% 5% 10% 15% 20% 25% 30% 35% Need the network to have more agility to support virtualization and cloud Require better automation and programmability of network for operational efficiency (OpEx gains) To improve security in the datacenter (such as microsegmentation) Use SDN to address VLAN sprawl and complexity Increase speed for provisioning the infrastructure for application workloads More easily scale the network to support various and growing workloads Use SDN to lower CAPEX (initial investment costs in network hardware) Simplify moves, adds, changes and decommissions Cloud Provider (N=75) Enterprise (N=327) Source: SDN Survey, IDC, September, 2015 16 © IDC Visit us at IDC.com and follow us on Twitter: @IDC
  • 17. WW Datacenter SDN Revenue 2020 Segmented – $12.5 Billion SDN Applications 28% Physical Networks 30% Virtualization/ Control 19% Professional Services 23% © IDC Visit us at IDC.com and follow us on Twitter: @IDC 17
  • 18. Open-Source Networking: Vendors Must Look for Sustainable Value Creation §  Community counts, it will decide winners and losers §  Traditional SPs leverage open-source networking for cost savings, operational efficiencies, scale their businesses cost- effectively §  Vendors must integrate with open source/ open systems where appropriate, focus on areas where they can add value and differentiate – application policy, analytics, enhanced-management software, and security •  Not just bottom of the networking stack © IDC Visit us at IDC.com and follow us on Twitter: @IDC 18
  • 19. Network Disaggregation Gets MindshareQ23. As part of your network architecture, have you considered a hardware-agnostic, third-party network operating system, such as one from Cumulus, Pluribus, Pica8 or Big Switch? 53.3% 37.3% 9.3% 44.0% 43.1% 12.8% 0% 10% 20% 30% 40% 50% 60% Yes No Not aware of this solution Cloud Provider (N=75) Enterprise (N=327) Source: SDN Survey, IDC, September, 2015 19 © IDC Visit us at IDC.com and follow us on Twitter: @IDC
  • 20. ODM-Direct (White box) Switching Grows, Sees Limited Enterprise Adoption §  ODM-Direct (White box) switches surpass $900 million in 2017, driven primarily by demand from hyperscalers, public cloud, and some large service providers. §  ODM-Direct switches fail to make meaningful headway in enterprise datacenters or campus deployments in 2017. © IDC Visit us at IDC.com and follow us on Twitter: @IDC 20
  • 21. ODM Direct Market Shares by Revenue, 2015 & 1H16 (%) Celestica 32.0% Quanta 31.0% Delta 27.3% Accton/ EdgeCore 9.5% 2015 Source: WW Datacenter Networks Qview 21 ©  IDC      Visit  us  at  IDC.com  and  follow  us  on  Twi6er:  @IDC   Celestica 29.5% Quanta 27.4% Accton/ EdgeCore 24.3% Delta 18.1% Others 0.7% 1H16
  • 22. Network Disaggregation: Value Proposition, Addressable Market •  Savings on CapEx, OpEx, biz and operational agility •  Run NOS on standardized network hardware provided by multiple vendors •  Simplified management •  Reduced vendor lock-in •  Reduced software/maintenance costs •  Addressable market: •  Large datacenters and/or datacenters that are critical to business success (faster service delivery, agile delivery of new services, etc.) •  Datacenters where network changes occur relatively frequently •  Linux, DevOps shops, even relatively small ones © IDC Visit us at IDC.com and follow us on Twitter: @IDC 22
  • 23. Brilliant Box: Enterprise Interest Not Converted Into Enterprise Adoption §  Enterprises are interested in brilliant box (OEM and ODM switch hardware paired with third-party network operating systems) •  But interest has not translated into deployments §  Challenges are mainly non-technical •  Enterprise skill sets (Linux in networking department) •  Cultural factors •  Service and support §  Some technical challenges •  Hardware-reliability concerns •  Software needs to be modular, composable © IDC Visit us at IDC.com and follow us on Twitter: @IDC 23
  • 24. TELECOM NETWORK EVOLUTION © IDC Visit us at IDC.com and follow us on Twitter: @IDC 24
  • 25. Digital  Experience  in  Telecom:  The  Shi5 §  To DX: Customer at the Center of the Business © IDC Visit us at IDC.com and follow us on Twitter: @IDC 25 §  From traditional: Network at the Center of the Business Network Network Service Omni-channel
  • 26. Multi-service IP/Optical Virtualization Existing & New Services CSP (Wireline and Wireless) Network Transformation Goal 26 Programmable, Intelligent, Automated, Open 2020 Highly Automated Networks REALIZE NEW ADDITIONAL REVENUE STREAMS 30-40 %Network Utilization 60-80 %Network Utilization Custom, Complex, Costly, Closed Static Networks 2014 Source: IDC, September 2016
  • 27. Worldwide Telecommunications 2017 Predictions   ©  IDC      Visit  us  at  IDC.com  and  follow  us  on  Twi6er:  @IDC   27   Source:  IDC  FutureScape:  Worldwide  TelecommunicaAons  2017  PredicAons,  IDC  #US40848516,  November  2016  #IDCMWC16   @erainge   Note: The size of the bubble indicates complexity/cost to address
  • 28. § Non-telecom services revenue gaining momentum: MNS, hosting, cloud, prof. services, security § Capex declined by 3.1% to $316.6B in 2015; biggest decline since 2009 economic slowdown § Mobile voice increasingly becoming commoditized due to saturation & fierce competition, growth driven by mobile data § Blended ARPU drivers: Competition, migration to shared data plans, economic factors § Wireline services revenue declines in every market despite growth in broadband revenue § Enterprise: Strong demand for VPNs, cloud, and steady growth of collaborative services; regional CSPs finding niche success Global Wireless Wireline CSP Market Trends 28
  • 29. CSP: Key Networking Priorities today §  Retire legacy TDM network infrastructure and converge access, aggregation, and edge networks to packet optical and IP routers §  Support multiple services such as Ethernet data, video, MPLS VPN, cloud connect, and broadband Internet on a converged IP network infrastructure §  Develop new NFV-based virtual network services for greater service agility and efficiency. •  SD-WAN and vCPE §  Enhance capacity in network core, edge and DCI to accommodate the high growth rate in data applications, converged networks, and higher bandwidth services §  Prepare for 5G! © IDC Visit us at IDC.com and follow us on Twitter: @IDC 29
  • 30. Worldwide Capex Spending Forecast (Wireline and Wireless) 30 Source: Capital Expenditure Report, 2015-2020: Spending on ICT, Convergence Technology Continues to Be a Key Focus for CSPs (IDC #US41401116, June 2016) §  Converged IT infrastructure spending increases §  White Box Switching, 400Gbps Ethernet §  4G/LTE – Radio Access + Mobile Packet Core §  5G Infrastructure §  Software Platforms (analytics, automation, orchestration) §  Converged Packet Optical/IP Routing
  • 31. CSP Infrastructure Virtualization Outlook Unified Integrated Network Data centers Mobile Core Network Datacenters Business Services Network Cloud Isolated 31
  • 32. Operations of NFV IT & Network Priorities for Hybrid Environment vary © IDC Visit us at IDC.com and follow us on Twitter: @IDC 32 Which capabilities are priorities for investment to enable you to manage virtual and hybrid services and network? 1= Lowest, 5= Highest 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 IT Respondent Multi-technology, vendor agnostic OSS Unified orchestration managing multiple orchestrators Centralized orchestration, as a single system Automated on-boarding of multi-vendor VNFs Service creation capabilities Near real-time, integrated view Dynamic, real-time monitoring and assurance Staff skills for NFV-based services 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Network Respondent Multi-technology, vendor agnostic OSS Unified orchestration managing multiple orchestrators Centralized orchestration, as a single system Automated on-boarding of multi-vendor VNFs Service creation capabilities Near real-time, integrated view Dynamic, real-time monitoring and assurance Staff skills for NFV-based services Lower importance to Ntwk Highimportance toIT Lower importance to IT Higherimportance toNetwork Source: IDC
  • 33. Virtual Network Functions VNFs orchestrated and managed on abstracted commodity hardware Commodity servers Commodity switches Commodity storage Classical Physical Network Function (PNF) or Appliance approach Virtual Network Function (VNF) approach The Core and Edge are moving to Virtual Network Functions Source: IDC, Feb 2017
  • 34. NFV Plans: Timeline © IDC Visit us at IDC.com and follow us on Twitter: @IDC 34 2015-early 2017: §  Customer premise equipment, especially for business customers §  Evolved packet core §  IMS linked to VOIP/ VoLTE 2017-2020: •  Edge •  IP Core •  IMS •  RAN/cloud RAN •  EPC Next 6 to 10+ years: •  Limited visibility •  Issues of reach, DevOps are expected to get resolved, automation vCPE 1st
  • 35. Virtual/Cloud-Managed Enterprise CPE §  Move enterprise network functions from on-premise, physical appliances to virtual, cloud-managed •  Consolidates branch network technologies into one appliance/ platform running multiple VNFs §  Provides simplicity, scalability, redundancy, and agility © IDC Visit us at IDC.com and follow us on Twitter: @IDC 35 IP or MPLS based Service Provider Network SP Datacenter/ Cloud Platform Enterprise  Branch  Loca:on   vCPE  
  • 36. Evolution of Managed Services Software Defined WAN Network Function Virtualization © IDC Visit us at IDC.com and follow us on Twitter: @IDC 36 §  Transport agnostic §  Manage App not CPE §  Agile Delivery §  Replace expensive CPE §  On-demand service pricing §  Manage virtual appliances (firewall, WanOp)
  • 37. CSP SD-WAN – A Key Disruptor §  Key WAN challenges: •  Security, Delivering SaaS, Managing connectivity •  Almost 50% of Apps accessed via Internet §  Top SD-WAN use cases: •  Multiple WAN providers, increased reliability, direct SaaS provider access §  Key SD-WAN components: •  Security, WAN Optimization, Policy Control, Automation •  Vendor vs CSP SD-WAN solutions preferred (typical of early stage) © IDC Visit us at IDC.com and follow us on Twitter: @IDC 37
  • 38. 38 Getting ready for 5G: Network Slicing Source: IDC, Feb 2017 §  5G will require Carriers to deliver diverse use cases spanning the latency and bandwidth spectrum §  Network Slicing is key to this delivery
  • 39. 5G Ecosystem and Technology Enablers © IDC Visit us at IDC.com and follow us on Twitter: @IDC 39 LTE Advanced Evolution Narrowband LTE New Radio (NR) Next Gen Core Multi RAT Integration and management mmWave Massive MIMO and beamforming Densification Management and Orchestration Open Source Network Function Virtualization (NFV) Software Defined Networks (SDN) Network Slicing Tactile Internet Mobile edge Computing Virtual and Augmented Reality Artificial intelligence Cloud Big Data and Analytics 5G Ecosystem
  • 40. Innovations in Open Source Collaboration §  Robust collaboration for CSP Operations •  CSP-led industry consortia •  Commercial supplier ecosystem programs •  Projects emphasize Enterprise business services §  Next phases will see consolidation of numerous approaches © IDC Visit us at IDC.com and follow us on Twitter: @IDC 40
  • 41. Networks  2020:  Compute  Everywhere,   Common  Access     CSPs  will  deploy   compute  resources   on  all  levels  of  the   network  to   support  their   internal  funcAons   and  services  for   their  customers     Services  will  uAlize   any  access  means   available,   governed  by   network  and   customer-­‐centric   policies     ©  IDC      Visit  us  at  IDC.com  and  follow  us  on  Twi6er:  @IDC   41   SoWware   Common  Infrastructure   Distributed   SDDC   Flexible   Converged   Transport   5G  Radio   Fixed   Access   Edge     CompuAng   VNFs   NG   OSS   Virtualized   Core   Common     Access   Big   Data   #IDCMWC16   @ehalilovicidc  
  • 42. ENTERPRISE NETWORK EVOLUTION © IDC Visit us at IDC.com and follow us on Twitter: @IDC 42
  • 43. Enterprise Network Infrastructure Trends §  Introduction of SDN for the campus •  Powered through enterprise NFV •  LAN and WLAN offerings §  Cloud-managed networking offerings grow •  Metered networking •  Customer trust and desire for cloud grows §  Practical obsolescence of 802.11n WLAN beginning in some markets §  SD-WAN poised to shake up market •  Connects edge to datacenter in new ways •  Sets the stage for cloud-managed/virtual CPE §  M&A and consolidation §  Industry ecosystem partnerships •  To compete with #1 and #2 vendors © IDC Visit us at IDC.com and follow us on Twitter: @IDC 43
  • 44. Mobility Meets Cloud in Virtuous Circle Internet Cloud Services § Management § Provisioning § Security HQ Branch Offices, Remote Sites, Mobile Workers Private Cloud/ Datacenter Regional Offices Cloud Apps/SaaS § CRM § ERP From Retail to Education to Healthcare, Enterprise IT is being challenged to provide mobile access to cloud-based business and consumer applications 44
  • 45. What Does the Digital Workplace Require? §  Mobile-first network design •  Wireless is becoming primary access method for enterprise networks §  Latest Standards •  Wave 1 vs. Wave 2 •  Emerging multi-gigabit Ethernet §  Right mix of cloud services §  Infrastructure convergence •  Wired and Wireless §  Optimization of network intelligence 12
  • 46. Key Use Cases That Heighten Need for Network Transformation 46 Enterprise Network © IDC Visit us at IDC.com and follow us on Twitter: @IDC §  Continued adoption of mobile apps and mobility-first architectures §  Proliferation of collaborative (UC&C) apps, including video conferencing §  Optimized Access to Cloud Services, including SaaS/Cloud providers §  Simplified deployment/provisioning of branch sites/applications §  Rapid Response to Security threats and vulnerabilities
  • 47. Cloud Brings Changes to the WAN Driving Need for SD-WAN Q. You mentioned that you currently use cloud IaaS and/or SaaS. What changes have you made or do you expect to make to your WAN as a result of your organization's cloud computing usage? 0% 10% 20% 30% 40% 50% 60% Increase access bandwidth (bandwidth from individual sites into the network) Increase core network bandwidth (bandwidth across the WAN or VPN backbone) Extend your network to the cloud provider(s) so the cloud service appears within your private network Use a quality of service (QoS) mechanism on your network Change your main WAN/VPN network service provider Deploy WAN optimization or acceleration technology No changes as a result of using cloud services N=644 Base=Respondents currently using IaaS/SaaS cloud computing services/technologies Source: U.S. Enterprise Communications Survey, IDC, December, 2015 47 © IDC Visit us at IDC.com and follow us on Twitter: @IDC
  • 48. Defining SD-WAN §  Hybrid WAN A hybrid WAN includes at least two WAN connections from each branch office, leveraging two or more different access technologies (MPLS, broadband Internet, 4G/LTE, etc.). §  SD-WAN SD-WAN leverages hybrid WANs, but includes a centralized, application-based policy controller; analytics for application and network visibility; a software overlay that abstracts and secures underlying networks; and an optional SD-WAN forwarder (routing capability) that together provides intelligent path selection across WAN links, based on application policies defined on controller. © IDC Visit us at IDC.com and follow us on Twitter: @IDC 48
  • 49. Demand Drivers for SD-WAN §  Enterprise WANs are costly and complex to manage •  15% of IT budgets §  40-60 % of enterprise data traffic is migrating from WANs to the internet §  Cloud drives requirement for increased WAN agility and flexibility •  Use of different networks (Internet broadband, 4G/LTE, MPLS) •  Automated provisioning •  Specification and prioritization of network connection on per- application basis •  Improved visibility © IDC Visit us at IDC.com and follow us on Twitter: @IDC 49
  • 50. Key SD-WAN Considerations Q. Which of the following attributes of an SD-WAN service or solution are the most important considerations when choosing an SD-WAN solution for branch office connectivity? Rank order from 1 to 5 with 1 the most important. 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Flexibility to add/change bandwidth capacity in near real- time Flexibility to use different networks (e.g., Broadband, MPLS, LTE) for application delivery Lower WAN transport costs Faster turn up (WAN provisioning) Prioritize network connection by application type or workload Policy-based intelligent path selection Optimizing WAN traffic by latency, jitter, packet loss Reduce dependency on the MPLS network Reduce WAN-management complexity Self-service portal Total N=744 Base=Respondents indicated organization plan to migrate existing WAN/network connections to a SD-WAN alternative within or more 2 years Notes: Source: U.S. Enterprise Communications Survey, IDC, December, 2015 50 © IDC Visit us at IDC.com and follow us on Twitter: @IDC
  • 51. Nearly 70% Expect to Use SD- WAN in Next 18 Months Q. Does your organization currently use or plan to use SD- WAN? 0% 5% 10% 15% 20% 25% 30% 35% Currently use Plan to use in the next 12 months Plan to use in 12-18 months No plans to use N = 605 Base=All Respondents Notes: Managed by IDC's Quantitative Research Group.; Data Not Weighted; Use caution when interpreting small sample sizes. Source: Software-Defined WAN (SD-WAN) Survey, IDC, April, 2016 © IDC Visit us at IDC.com and follow us on Twitter: @IDC 51
  • 52. © IDC Visit us at IDC.com and follow us on Twitter: @IDC 52 Source: IDC, 2016 Pure-play SD-WAN SolutionsWAN Infrastructure, WAN Optimization- based SD-WAN Solutions Emerging SD-WAN Market Landscape Cloud-managed SD-WAN ServicesManaged CSP SD-WAN Services §  Cisco §  Riverbed §  Silver Peak §  Juniper §  Citrix §  ALU/Nuage §  Viptela §  CloudGenix §  VeloCloud §  Versa Networks §  Cybera §  Talari §  VeloCloud §  CloudGenix §  Riverbed §  Versa Networks §  Aryaka §  Verizon §  BT §  Telstra §  Orange Business §  CenturyLink §  SingTel §  COLT Emerging SD-WAN Landscape
  • 53. © IDC Visit us at IDC.com and follow us on Twitter: @IDC 53 *Source: Cloud and Drive for WAN Efficiencies Power Move to SD-WAN (IDC Doc #US41101416) SD WAN §  SPs will leverage SD WAN opportunity to offer value added services around applications, cloud connectivity, bandwidth, orchestration §  Important go-to-market strategy for SPs to address on-going MPLS market transformation §  Opportunity to compete in SD WAN market - forecast to grow to $6 billion in 2020 (with a 93% 2015-2020 CAGR)* Worldwide SD-WAN Equipment & Services Revenue Explodes
  • 54. Renaissance of [Campus Network] Virtualization §  Interest growing in virtualized converged branch networking architectures •  SDN ignites interest and enables network virtualization §  “Enterprise” NFV garners attention •  Routing, firewalling, and other functions §  Virtualization feeds cloud-managed networking and vice- versa- in a virtuous cycle © IDC Visit us at IDC.com and follow us on Twitter: @IDC 54
  • 55. Enterprise Campus SDN Emerges © IDC Visit us at IDC.com and follow us on Twitter: @IDC 55 §  Some vendors have introduced campus SDN solutions •  Early adopters will be vital in showcasing ROI/viability §  New architectures meet old campus challenges •  Bandwidth/Performance •  Application agility •  Security §  Datacenter SDN and SD-WAN helping IT understand potential benefits of Campus SDN •  Appliance virtualization •  End-to-end visibility •  Automation and programmability
  • 56. Virtualized Network Appliances Viewed Favorably Q. Has/Will the adoption of SDN cause your organization to reassess or redeploy any of the following physical appliances as virtual appliances (software)? 56.7 36.8 53.4 57.3 59.3 2.0 0% 10% 20% 30% 40% 50% 60% 70% WLAN controllers Routers Network management appliances Network security appliances WAN Optimization appliances Other N = 240 Source: IDC Campus Network Innovation Survey, IDC, October, 2015 56© IDC Visit us at IDC.com and follow us on Twitter: @IDC
  • 57. Many Delivery Paths for Cloud- Managed Networking Q. Who manages and operates your Cloud-managed WLAN infrastructure? 50.8 29.6 5.9 3.8 10.0 0.0 0% 10% 20% 30% 40% 50% 60% WLAN Solution/Equipment Vendor Major Telecom Services Provider Third Party Managed Services Provider Systems Integrator/VAR Self-operated (IT Dept.) Don't Know N = 198 Source: IDC Campus Network Innovation Survey, IDC, October, 2015 57© IDC Visit us at IDC.com and follow us on Twitter: @IDC
  • 58. Worldwide Enterprise Network Infrastructure Forecast by Technology 58 ©  IDC      Visit  us  at  IDC.com  and  follow  us  on  Twi6er:  @IDC   $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Billions L2-3 Switch ADC ADCaaS Router WLAN WAN Optimization IP Telephony Enterprise Video & TP FC & Infiniband Switch NVO/SDN Controller
  • 59. Essential Guidance 59 §  Digital Transformation is a critical industry imperative •  The “3rd Platform” is transforming the network’s importance to business §  Network transformation is a key requirement in this evolution §  SDN/NFV is an architectural response to these requirements, driven by increased cloud adoption and the need to bring agility to IT/Network Ops © IDC Visit us at IDC.com and follow us on Twitter: @IDC