IHS Markit: Enterprise Data Center SDN savings yet to be realized

by Josh Bancroft, IHS Markit Analyst

IHS Markit recently surveyed 100 North American enterprises that are evaluating or implementing software-defined networking (SDN) for the data center by 2020. Respondents currently evaluating SDN expect that it will drive operational- and capital-expenditure decreases at a faster pace than what has been experienced by those already deploying SDN.

“Migrating to SDN means deploying new equipment, upgrading existing equipment, and training IT staff, which requires investment,” said Josh Bancroft, senior analyst, cloud and data center research, IHS Markit. “Those evaluating SDN need to adjust their expectations that savings might not be felt immediately, but instead might happen over a longer period of time.”

The 2018 “Data Center SDN Strategies North American Enterprise Survey” indicated that the transition to live SDN deployment is well underway. By the end of 2019, 74 percent of respondents will be in production trials, and 36 percent will be in live production, up from 38 percent and 20 percent, respectively, in 2018. Enhancements have been made by vendors, including integrating network analytics to improve application performance and security. Doing so will encourage enterprises to deploy SDN, since improved application performance and improved security were two of the top drivers for deploying SDN. Other top deployment drivers for SDN included; decreased operating costs, simplified network provisioning and improved management capability.

In the IHS Markit survey, Cisco, VMware, and Dell EMC were identified as the SDN hardware and software manufacturers with which respondents were most familiar.

Following are some additional highlights from the survey:

  • Top deployment barriers among the respondents were the interruption of critical network operations (30 percent), interoperability with existing network equipment (29 percent) and lack of trained staff (29 percent)
  • Less than half (48 percent) of respondents expect capital expenditures (capex) to increase again in the second year of deployment. However, capex increased in the second year for 61 percent of those who have deployed SDN, which suggests those evaluating deployment should adjust their expectations.
  • Nearly one-third (31 percent) of respondents chose automated disaster recovery as the top use case for capex reduction, while 35 percent selected automated provisioning as the top use case for operating expenditure (opex) reduction, and 30 percent chose automation for application deployment as the top use case for employee productivity.
  • By 2020, 83 percent of respondents will be in live production with data center SDN.

Data Center SDN Strategies North American Enterprise Survey

This IHS Markit survey analyzes the trends and assesses the needs of enterprises deploying SDN in their data centers. The study probes issues defining how the enterprise market will evolve with data center SDN, including deployment drivers and barriers, rollout plans, applications, use cases, vendors installed and under evaluation, top rated vendors, and more.

IHS Markit: SDN deployed by 78% of global service providers at end of 2018

By Michael Howard, senior research director, carrier networks, IHS Markit


  • All of the 23 service providers surveyed reported that they will deploy SDN at some point. More than three-quarters (78 percent) of those providers will deploy or evaluate the architecture by the end of this year, growing to 87 percent by the end of 2019.
  • Software-defined wide-area networks (SD-WANs) leads the list of SDN-based services expected to generate new revenue, with 78 percent of respondents identifying it as a key deployment goal, while nearly half (48 percent) plan to implement network slicing for IoT.
  • Automation and reduction of capex and operating-expenditure (opex) are among the goals for the top domains for SDN deployments. By the end of 2019, 74 percent of respondents will use SDN to automate the delivery of new services, followed by operations and management at 65 percent.

Our analysis

Service providers are in the early stages of a long-term transition to software-defined networks (SDN), according to the sixth annual “Carrier SDN Strategies Service Provider Survey” in 2018 from IHS Markit. Various barriers and drivers have become more prominent, as operators get closer to commercial deployment, although the barriers remain. These barriers include the problem of products that are not carrier grade and difficulty with integration into existing networks.

Service providers around the globe – representing 44 percent of worldwide telecom capital expenditure (capex) and 44 percent of revenue – are investing in software defined networks (SDNs) as part of a larger move to automate their networks and transform their internal processes, operations, and the way they offer services to their customers. Providers view SDN as a key technology underpinning the fundamental changes in telecom network architecture that delivers benefits in new service agility, quicker time to revenue, automation, operational efficiency, and capex savings.

Many operators have some parts of their networks running under SDN control. The rest are moving from their proof-of-concept (PoC) investigations and evaluations for SDN toward commercial deployments in the tail end of 2018 and 2019.

The top two reasons service providers are investing in and deploying network SDN are the following:

  • Simplification and automation of service provisioning, leading to service agility and quicker time to revenue
  • End-to-end network management and control as part of increased automation

The majority of service providers are investing in SDN in order to simplify and automate the provisioning of their networks for end-to-end network and service management and control—with the goal of having a global view of network conditions across the various vendors’ equipment, network layers, and technologies. SDN figures in provider plans to generate revenue, with multi-cloud and network slicing for applications and IoT figuring more prominently this year.

Still, carriers will learn that some avenues are not as fruitful as expected, and telecom equipment manufacturers and software suppliers may well invent new approaches that open up new applications.

Carrier SDN Strategies Service Provider Survey – 2018

This sixth annual survey of global service providers explores plans and strategies of 23 operators for evaluating and deploying SDNs. The study identifies the drivers for this fundamental change in service provider network architecture and explores use cases, development stages, barriers, applications, target network areas, and timing of deployment plans.


Editor’s Note:

But what SDN model or version was implemented by these service providers?  That is not stated in Michael Howard’s report.

There’s the classical SDN/Open Flow model from ONF, the overlay or virtual network model, the evolutionary model, hybrid model, DevOps management model, VMWare’s two NSX versions, etc

Also, most versions of SDN use a centralized controller and NOT segment or hop by hop routing. Yet Cisco and Juniper routers can handle segment-routing traffic. Their versions of SDN are ready for segment routing, as well. Moreover, Linux has an open source implementation of segment routing, and Cumulus Networks’ Linux-based network OS also supports it.

With so many different versions of SDN, it appears that network equipment and software built for one SDN based network will not work on ANY other service provider’s SDN unless multiple SDN versions/models are supported in the same equipment/software.



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