SDN Market to Reach $8 Billion in 2018

At the annual IDC analyst breakfast meeting at the Interop conference on April 29, analysts provided new color and forecasts on the current state of the networking industry.

The biggest number provided by IDC during the meeting was that of the entire worldwide enterprise market for networking. According to IDC, in 2015 the global enterprise networking market generated $40.2 billion in revenue. Of that, 49 percent is attributed to the layer 2-3 switching segment. Wireless (WLAN) networking gear accounted for for 12.2 percent of revenues.

One of the areas touched on during the session was the Software Defined Networking (SDN) market, which IDC is now forecasting to reach $8 billion in revenue by 2018. For IDC, making predictions about the size of the SDN market is an annual tradition at Interop. During IDC’s Interop 2012 breakfast meeting. the analyst firm forecast that SDN would be a $2 billion market by 2016. By the end of 2012, IDC upped the forecast to $3.7 billion in SDN revenue by 2016.

“Networks only exist to support applications,” IDC analyst Brad Casemore said.

As part of that reality, Casemore noted that according to IDC, 80 percent of U.S. companies are considering either public or private cloud for application deployment. He added that SDN was developed because of the cloud.

“You don’t develop network architectures just for the fun of it,” Casemore said. “If your applications are not going to change, you really don’t need to change your network.”

Casemore added that as the workload changes for the cloud, it’s important that the network changes to support the productivity that is required. With SDN, Casemore said that it’s going through an evolution with a lot of overlay based solutions in the data center today.

There is also an emerging trend toward the use of containers that will have an impact on networking as well.

“We’re seeing Docker containers come out of the Linux world,” Casemore said. “The rise of containers as it takes off in enterprise environments, will need robust and secure networking.”

In the age of cloud, another transition mentioned by Casemore is that traditional WAN optimization is not enough.

“There are various WAN connections and there are also cloud services that are no longer in your own data center,” Casemore said. “So you need to have things like intelligent path selection, cloud VPN, and you have to look at what your workloads need over the WAN.”

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and Follow him on Twitter @TechJournalist.

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