IEEE ComSoc Technology Blog

I.  Infonetics Research released excerpts from its 2nd quarter 2014 (2Q14) Set-Top Boxes and Pay TV Subscribers report, which tracks IP, cable, satellite, and digital terrestrial (DTT) set-top boxes (STBs) and over-the-top (OTT) media servers.

2Q14 SET-TOP BOX MARKET HIGHLIGHTS:
.    Globally, set-top box (STB) revenue-including IP, cable, satellite, and DTT STBs and OTT media servers-is up 4% in 2Q14 from 1Q14, to $4.8 billion
.    STB unit shipments grew 7% sequentially in 2Q14, but are down 3% from the year-ago 2nd quarter of 2013
.    Cable STB revenue increased by 3% sequentially in 2Q14, and unit shipments grew 4% during this same period
.    Arris, the worldwide STB market share leader, gained almost 2 share percentage points in 2Q14 over 1Q14
.    Over-the-top (OTT) media servers are quickly becoming the STB of choice for pay TV providers in emerging markets such as China, where free video content is abundant and service providers are looking to bundle live streaming video with their own broadband offerings
.    The worldwide STB market is forecast by Infonetics to be essentially flat, i.e. growth at a -0.05% compound annual growth rate (CAGR) – from 2013 to 2018, when it will total $19.2 billion.
.     Surprise forecast: In 2018, satellite STBs are expected to contribute the majority of STB revenue at 36%

“The global set-top box (STB) market is in a fascinating period of mixed signals. While quarterly unit shipments are up, on a year-over-year basis shipments are down. And though nearly all STB product categories saw volume increases in 2Q14, satellite shipments continue a downward trend, while cable set-tops are growing due to an ongoing refresh cycle in North America and Europe,” says Infonetics’ Jeff Heynen, principal analyst for broadband access and pay TV.

STB REPORT SYNOPSIS:
Infonetics’ quarterly STB report provides worldwide and regional market size, vendor market share, forecasts through 2018, analysis, and trends for IP STBs; cable and satellite STBs (digital, hybrid, video gateways, media players); DTT STBs; and OTT media servers. The report also tracks telco IPTV and cable and satellite video subscribers. Vendors tracked: ADB, Apple, Arris, Changhong, Cisco, Coship, DVN, Echostar, Huawei, Humax, Jiuzhou, Kingvon, Netgem, Pace, Roku, Sagemcom, Samsung, Skyworth Digital, Technicolor, ZTE, others.

To buy report, contact Infonetics: www.infonetics.com/contact.asp

RELATED REPORT EXCERPTS:
.    DOCSIS channels pass 1 million for first time in Q2; CCAP revenue up 42%
.    Broadband aggregation equipment passes $2B in 2Q14 as operators ‘binge on broadband’
.    Fixed broadband infrastructure investments are rebounding in Brazil
.    OTT and multiscreen TV drive spending on broadcast and streaming video equipment
.    802.11ac routers to make up nearly a third of WiFi-enabled router shipments by 2015

II. Research and Markets has announced the addition of the “Global and China Set-Top Box (STB) Industry Report 2014” report to their offering.

The Global and China Set-Top Box (STB) Industry Report 2014 is a professional and in-depth study on the current state of the global set-top box industry with a focus on the Chinese market.

The report provides a basic overview of the industry including definitions, classifications, applications and industry chain structure. The set-top box market analysis is provided for both the international and Chinese domestic situations including development trends, competitive landscape analysis, key regions development status and a comparison analysis between the international and Chinese markets.

Development policies and plans are also discussed and manufacturing processes and cost structures analyzed. Set-Top box industry import/export consumption, supply and demand figures and cost price and production value gross margins are also provided.

The report focuses on thirteen industry players providing information such as company profiles, product picture and specification, capacity production, price, cost, production value and contact information. Upstream raw materials and equipment and downstream demand analysis is also carried out. The set-top box industry development trends and marketing channels are analyzed. Finally the feasibility of new investment projects are assessed and overall research conclusions offered. 

For more information visit http://www.researchandmarkets.com/research/7b85kd/global_and_china

Media Contact: Laura Wood, +353-1-481-1716, [email protected]

Infonetics Research released excerpts from its new SIP Trunking Services market size and forecasts report, which tracks Session Initiation Protocol (SIP) trunking revenue, trunks, and average revenue per trunk.

SIP trunking is a means of synthesizing the Session Initiation Protocol and Voice over Internet Protocol (VoIP) to provide telephony services over data networks. The two leading SIP trunk providers are BroadVoice and 8×8, Inc.

SIP TRUNKING SERVICES MARKET HIGHLIGHTS:

 .    The global SIP trunking services market is on track to grow 35% in 2014, to $4.4 billion
.    The biggest market for SIP trunking services is North America, although new geographic markets continue to open up, helping fuel growth
.    More and more businesses are making the switch to SIP trunking, but they are not cutting 100% of connections to SIP on day one; rather, SIP is typically being deployed at one or two sites to start
.    Infonetics expects continued strong worldwide growth for SIP trunking over the next five years, forecasting the market to reach $8 billion in 2018
.    SIP trunking is being pitched alongside hosted PBX and unified communications (UC) services as more businesses seek hybrid solutions

“There is no denying the world is moving to IP, and SIP has become the de facto solution of choice for businesses for IP connections. In North America, slightly more than 20% of the installed business trunks are SIP trunking today, with significant upside opportunity,” notes Diane Myers, principal analyst for VoIP, UC, and IMS at Infonetics Research.

SIP REPORT SYNOPSIS:

Infonetics’ annual SIP trunking services report provides worldwide and regional market size, forecasts through 2018, analysis, and trends for SIP trunking revenue, trunks, and average revenue per trunk.

To buy the report, contact Infonetics:

www.infonetics.com/contact.asp

RELATED REPORT EXCERPTS:

.    Infonetics’ October Enterprise Voice, Video, and UC research brief:
http://www.infonetics.com/2014-newsletters/Enterprise-Voice-Video-UC-October.html
.    Over 3/4 of N. American businesses surveyed plan to use SIP trunking by 2016
.    Shift to software and services in enterprise videoconferencing market tamps revenue growth
.    Enterprise session border controller (eSBC) market up 8% in 2Q14
.    PBX market struggles linger in first half of 2014; UC up 31% from year ago
.    Cloud PBX and unified communication services a $12 billion market by 2018

References:

Analysis of the North American VoIP Access and SIP Trunking Services Market 2013-2020

http://www.businesswire.com/news/home/20141001006535/en/Research-Markets…

http://sip-trunking.tmcnet.com/

Infonetics Research released excerpts from its 2014 100G+ and ROADM Strategies: Global Service Provider Survey, which details the plans of operators transitioning optical transmission and switching equipment to higher-speed 100G+ wavelengths.

100G+ AND ROADM SURVEY HIGHLIGHTS:
.    Respondent operators have reasonable expectations for pricing for coherent metro-regional and access applications versus the core
.    When it comes to end-use applications for metro 100G, study participants view data center interconnect as the clear killer app for the next 12 months
.    Respondents also expect a greater uptake of 100GE transport when compared to previous years’ Infonetics surveys
.    Those surveyed expect 100G WDM to account for almost 40% of all metro wavelength deployments and 75% of the core network in 2017
.    Pluggable CFP and CFP2 technology is perceived by respondents as a more important technology for the metro this year than it was last year

“The big battleground for vendors of 100G-and-beyond coherent equipment and components has shifted to the metro as winners for long reach core applications have been decided,” says Andrew Schmitt, principal analyst for carrier transport networking at Infonetics Research.

“There are two very distinct markets for coherent technology. One market is deploying long haul coherent today and will transition to metro in the coming years. But there is another, separate (network provider) customer type that is already fully committed to deploying coherent technology in the metro today,” Schmitt adds. “These two markets have major implications for the supply chain regarding product specialization and the relative lack of interest in flex coherent technology by 
some customers.”

ABOUT INFONETICS’ 100G/ROADM SURVEY:

 For its 19-page 100G+ and ROADM (Reconfigurable Optical Add/Drop Mulltiiplexer) strategies survey, Infonetics interviewed 31 incumbent, competitive, mobile, and cable operators from EMEA, North America, and Asia that have an optical transport network using WDM. Together, the respondents represent a significant 33% of the world’s telecom revenue and 36% of global capex. The survey covers 100G WDM price points, metro coherent wavelength deployment trends, end-use applications for metro 100G, metro and core technology adoption rates, and key technologies for optical transport.

To buy the report, contact Infonetics: www.infonetics.com/contact.asp

http://www.infonetics.com/pr/2014/100G-ROADM-Strategies-Survey-Highlight…

FREE OPTICAL WEBINAR AND WHITEPAPER:

Join Infonetics analyst Andrew Schmitt Oct. 28 at 11:00 A.M. EDT for Building More Efficient Networks with Multi-Layer Packet-Optical, an event examining how network operators are building more capable and efficient networks. Register to attend live or access the replay at:
http://w.on24.com/r.htm?e=846242&s=1&k=C66A31488593733FC7770651A4A1DD98

RELATED REPORTS & BLOG POSTS:
.    Infonetics’ October Optical research brief:
http://www.infonetics.com/2014-newsletters/Optical-October.html 

Top 10 Things to Look for in a Metro 100G Platform

http://www.cyaninc.com/blog/2014/09/09/top-10-things-to-look-for-in-a-me…

Fujitsu unveils 100G coherent CFP for metro networks

http://www.lightwaveonline.com/articles/2014/09/fujitsu-unveils-100g-coh…

Infinera Targets Cloud for 100G Network Between Data Centers

https://www.sdncentral.com/news/infinera-gets-cloud-happy-100g-network-d…

There are so many flavors of “SDN” you can’t keep track of them.  The term “SDN” has come to ONLY mean “software control of a network.”   That could be anything and is a far cry from the original definition which included strict separation of the Control and Data planes, a “centralized controller” that computes paths for many packet forwarding engines (Data plane implementations) and a standardized API (Open Flow v1.3) as the “southbound API” between the Control and Data Planes.

What Guru Parulker of Stanford University called “SDN Washing” (non pure forms of SDN) have come to dominate the industry.  There are network overlay models with multiple instances of Control planes, network virtualization (overlay of a logical network over a physical network) using VMware technology or VxLAN tags, and extensions of proprietary, closed network equipment to accomodate some degree of user control over the network configuration and paths.

I don’t think AT&Ts SDN WAN uses Open Flow or even a centralized  SDN controller to compute paths/routes for multiple data forwarding “engines.”  Instead, they use a proprietary, dynamic routing protocol as described in this article: http://viodi.com/2014/09/18/atts-sdn-wan-as-the-network-to-access-deliver-cloud-services/

What Standards are Required for SDN:

IMHO, Open networking imples multi-vendor interoperability, which requires standards for functionality, protocols, APIs, and interfaces that are in the public domain.   I believe the following standards are needed for SDN:

1.  API/protocol between the Control Plane entity and the Data Plane entity (Open Flow v1.3????)

2.  API/protocol between the Control Plane entity and the Management/Orchestration/Automation entity.  It’s sometimes referred to as the “Northbound API”  or “Management plane API”

There’s also OpenStack Networking API v2.0 (neutron) Reference

Note:  This is a condensed summary of two previously published articles on this excellent conference.  

http://viodi.com/category/weissberger/

Introduction:

The telco data center [^1] (DC) is likely to be the first place network operators deploy Network Virtualization/Network Functions Virtualization (NFV).  That was the opening statement at the Light Reading conference on NFV and the Data Center,  held Sept 16, 2014 in Santa Clara, CA.   A network virtualized data center was defined by the conference host as a “cloudified DC which integrates virtualized telecom network functions utilizing Virtual Network Functions (VNF) or Distributed VNFs.”

Note 1. Larger network operators (e.g. AT&T, Verizon) already operate “telco DCs” for web hosting, storage, cloud computing, managed services, and back end network management/OSS/BSS.  It will be easier for them (compared to those operators with no DC) to implement a NFV based telco DC.  See Heavy Reading Survey results below for more details on this topic.

Concepts and reference architectures from the  ETSI NFV specifications group were predicted to alter the data center from a siloed IT-centric model (separate compute /storage/ networking equipment)  to a harmonized network and IT domain model, in which virtualized telecom functions, e.g. policy control and application orchestration, are added to the growing list of computing demands on servers.  According to Light Reading, NFV will drive an entirely new set of storage, automation, management, and performance requirements, which are only now starting to be defined.

[One must assume that these VNF’s will be implemented as software in the DC compute servers, perhaps with some hardware assist functionality.   Realizing that vision will eliminate a lot of network equipment (hardware) in a telco’s DC and provide much more software control of network functions and services.]

Key industry trends discussed at this excellent 1 day conference included:

•The need for service providers to shorten their service delivery cycles and adopt agile approaches to delivering new services.

•The key role that automation of network processes will play in helping operators deliver more user control and network programmability.

•Taming network complexity remains a significant challenge.

•Services in the era of virtualization must still maintain security and reliability for which telecom has been known.

Key findings from Heavy Reading’s January 2014, multi-client study are presented.  Next, we summarize network operator keynotes from Century Link.  Part 2. will review the Orange, and NTT Communications keynotes as well as our summary and conclusions.

Panel Discussion:

NFV requires operators to find new ways of looking at basic network attributes like performance, reliability and security.  For example, performance metrics may change in migrating to NFV – from raw/aggregate performance to performance per cubic meter, or performance per watt.  Virtualization will transform many ways of configuring and managing network resources. 

However, a business case must be established for an operator to move towards network virtualization/NFV/NVFs.  The cost and ROI must be justified. Heavy Reading analyst Roz Roseboro opined that projects which get funded are those that will affect the top line, meaning increased revenues from new and existing services.  In that sense, NFV is more likely to get funding than SDN, because it will greatly help an operator increase service velocity/time to market and thereby realize more money.   SDN is more about OPEX reductions and efficiency she said.

Century Link Keynote: James Fege, VP of Network Strategy & Development

CenturyLink is counting on its Savvis acquisition to make them hugely successful in cloud computing and to build a “cloudified” telco DC for traditional network services.   Acquired in 2011, Savvis is a separate vertical entity within CenturyLink (which includes the former Embarq, U.S. West, Qwest and other companies. CenturyLink has successfully integrated the cloud orchestration and software development of Tier 3, and the platform-as-a-service capabilities of AppFog in their cloud computing capabilitites). 

According to Feger,  “Cloud is not ‘rust resistant.’  It must be: programable, self-service, and offer on-demand services.” 

The CenturyLink Cloud process and operations involve the following attributes:

• Agile methodology
• 21- to 30-day release cycles
• DevOps team²
• Minimum viable product (not explained)
• Building block architecture which is API based
• Constant feedback to improve operations and services

Note 2:    While network operations is traditionally a stand-alone function with dedicated staff, the DevOps model eliminates the hand-off from development to operations, keeps the developers in the feedback loop, and incentivizes developers to resolve problems or complications on their own instead of passing them to the Operations department. 

The realization of the above cloud attributes is via open applications programming interfaces to software that exists above the physical network.  Open source software will allow developers to offer their apps or services regardless of the underlying infrastructure, Feger said.  He was firm in his view that “agility combined with our network platform is CenturyLink’s differentiator.” 

Feger was quite honest during his talk.  He confessed that the service cycles on the network side are still measured in months, not weeks or days. By incorporating the agile technology approaches of the CenturyLink Cloud and the use of a DevOps model, CenturyLink hopes to improve on that.  But not this year or next.

“It will be a multi-year project to migrate our network to a cloud like set of capabilities, while minimizing (existing) customer disruptions.”

The take away here is that CenturyLink is attempting to leverage their highly regarded cloud capabilities to offer “cloud-like” L1 to L3 network services, e.g. IP MPLS VPN, Ethernet services, private line (e.g. T1/T3/OC3), broadband Internet access, video, and other wire-line services.   Service delivery times must become a lot shorter, while programmability, orchestration, and automation are necessary components to make this happen.  

Orange Keynote:  Christos Kolias, Sr. Research Scientist, Orange – Silicon Valley

Christos first described the the NFV Concept and Vision from his perspective as a founding member of the ETSI NFV specifications group.  It’s a quantum shift from dedicated network equipment to” virtual appliances.”

In the NFV model, various types of dedicated network appliance boxes  (e.g. message router, CDN equipment, Session Border Controller, WAN acceleration, Deep Packet Inspection (DPI), Firewall, Carrier grade IP Network Address Translation (NAT), Radio/Fixed Access Network Nodes,  QoS monitor/tester, etc.) become “virtual appliances,” which are software entities that run on a high performance compute server. 

In other words, higher layer network functions become software based virtual appliances, with multiple roles over the same commodity hardware and with remote operation possible.  “It’s a very dynamic environment, where (software based) network functions can move around a lot.  It’s extremely easy to scale,” according to Christos.

[One assumes that each such virtual appliance would have an open or proprietary API for orchestration, automation, and management of the particular function(s) performed.]

A few examples were cited for a network virtualized telco DC:

• Security functions: Firewalls, virus scanners, intrusion detection systems, spam protection

•Tunnelling gateway elements: IP-SEC/SSL VPN gateways

•Application-level optimization: Content Delivery Networks (CDNs), Cache Servers, Load Balancers, Application Accelerators, Application Delivery Controllers (ADCs)

•Traffic analysis/forensics: DPI, QoE measurement

•Traffic Monitoring: Service Assurance, SLA monitoring, Test and Diagnostics

Note:  This author DESPISES TLAs=three letter acronyms.  In many cases, the TLA used in a presentation/talk is much more recognizable in another industry, e.g. ADC =Analog to Digital Converter, rather than Application Delivery Controller.  Hence, I’ve tried to spell out most acronyms in this and the preceeding article on the NFV conference.  It takes a lot of effort as I’m not familiar with most of the TLAs used glibly by speakers.

Kolias said that the migration from network hardware to software based virtual appliances won’t be easy.  Decoupling NVFs from underlying hardware presents management challenges: services to NFV mapping, instantiating VNFs, allocating and scaling resources to VNFs, monitoring VNFs, support of physical/software resources.

NFV components in a virtualized telco DC might include:  server virtualization, management and orchestration of functions & services,  service composition, automation, and scaling (up and/or down according to network load).   There are lots of servers, storage elements, and L2/L3 switches in such a DC.  There’s also:  security hardware (firewalls, IDS/IPS), load balancers, IP NAT, ADC, monitoring, etc.

NFV in the Data Center will be more energy efficient, according to Kolias.  “It’s  the greenest choice for an operator,” Christos said.   With many fewer hardware boxes, NFV can bring the most energy efficiency to a data center (less energy consumed and lower cooling requirements).  That’s a top consideration for those massively power-hungry DC facilities. “You have to dispose of telecom hardware, but when we move things into software, it becomes more eco-friendly,” Kolias said.   “So yes, there is absolutely a fit for NFV in the Data Center,” he concluded.

Christos thinks it’s probably easier and faster to implement NFV in a telco DC, because there’s less compliance/ regulation and it’s a less complex environment – both technically and operationally.

Service chaining was referred to as “service composition and insertion,” with policies determining the chain order.  Customized service chains are possible with NFV, Kolias added. Ad-hoc, on-demand, secure virtual tenant networks are also possible.  For example, tunnels/overlays using the VxLAN protocol (spec from Arista, VMWare and Juniper).

Kolias also cited other benefits of “cloudification” — a term he admittedly hates. “For example, consolidating multiple physical network infrastructures in a cloud-based EPC (LTE Evolved Packet Core) can lead to less complexity in the network and produce better scalability and flexibility for service providers in support of new business models,” he noted.

Several other important points Christos made about NFV in the telco DC:

1. Virtual switches can be key functional blocks for management of multiple virtual switches and for programmable service chains.

2.  The Control plane could become part of management and orchestration in a unified, policy-based management platform, e.g. OpenStack. 

[That’s radically different than the pure SDN model (Open Network Foundation), where the Control plane resides in a separate enitity, which communicates  with the Management/ Orchestration platform (e.g. OpenStack) via a “Northbound” API.]

3.  Hardware acceleration can play a role in Network Interface Cards (NICs) and specialized servers.  However, they should be programmable.

4.  Challenges include:  Performance (e.g. increased VM-VM traffic requirements), Security Hybrid environment, and Scaling.

APIs will be important for plug-n-play, especially for open platforms like Google, Facebook, Microsoft, eg. WebRTC.  They can enable a plethora of innovative (e.g. ad-hoc/customized) services and lead to new business models for the telcos.  That would translate into monetization opportunities (e.g. for new residential and business/ enterprise customers, virtual network operators (VNOs), and others) for service providers.

Christos predicts that many service providers will move from function/service based networks to app-based models.  They will deploy resources, including Virtual Network Functions (VNFs) on-demand, as an application when the user needs them.   He predicted that smart mobile devices and the Internet of Things (IoT) will precipitate the adoption of APIs for telco apps.

Kolias summed up: “NFV can propel the move to the telco cloud. When this happens we will have succeeded as an NFV community!  NFV removes the boundaries and constraints in your infrastructure. It breaks the barriers and opens up unlimited opportunities.”

NTT Com Keynote:  Chris Eldredge, Executive VP of Data Center Services for NTT America (NA subsidiary of NTT Com)

Background: NTT Com is one of the largest global network providers in the world, in third place behind Verizon and AT&T. They provide global cloud services, managed services, and connectivity to the world’s biggest enterprises.  NTT Com has a physical presence in 79 countries, $112B in revenues, and 242K employees.  It’s network covers 196 countries and regions. The company spent $2.5B in R&D last year, with a North American R&D center in Palo Alto, CA.  Finally, they claim to be the #1 global data center and IP backbone network provider in the world.  [Chris said Equinix has more total square footage in their data centers than NTT, but they don’t have the IP backbone network.] 

NTT Com’s enterprise customers mostly use cloud for development and test applications. “It’s bursty in nature. They turn it up and turn it down,” Eldredge said.  It’s also used for OTT broadcasts of sporting events and concerts.   On January 1, 2014, NTT spun up 200,000 virtual machines (VMs) to meet demand for Europeans watching soccer matches on their mobile devices. After the soccer match was over, those VMs were de-activated.

With the Virtela acquisition, NTT Com has recently deployed their version of NFV capabilities in both their DCs and global network along with SDN based provisioning.

“SDN/NFV is a more scalable network technology that NTT Com is now using to provide cloud and managed services to a broad range of clients,” Eldredge said.  “It allows us to specialize and provide custom solutions for our customers,” he added.

The NFV (higher layer) services NTT Com is now offering include:  virtual firewall, network hosted applications accelerator, Secure Sockets Layer (SSL) VPN, IP-SEC gateway, automated customer portal (for full control of services, self deployment, self management, and full visibility), on premises harware based managed services which provide a fully integrated managed solution for NTT Com customers.

The above NFV enabled services can be easily applied, monitored and rapidly changed. NTT Com can customize applications performance and service levels for specific users and profiles.  In conclusion, Chris said that “NFV has become the next phase of the virtualized DC, extending the enterprise DC into the cloud.  [Such an extension, by definition, would be a hybrid cloud]

In answer to this author’s question on when and if NTT Com would use NFV to deliver pure (L1-L3) network connectivity services, Chris confessed that it wasn’t on their roadmap at this time.

Summary and Conclusions:

Operators are planning for NFV and some – like NTT Com – already have implemented several NFV enabled services.  Examples of NFV capabilities were clearly stated by Kolias of Orange Silicon Valley and Eldredge of NTT Com.  It starts with higher layer (L5-L7) network functions/capabilities, cloud and managed services.  However, it will take considerable time before the entire network is virtualized.  “NFV everywhere by 2020” is too aggressive, according to some.  And don’t expect mainstream connectivity functions (including Carrier Ethernet services, private lines, circuit switching, etc) to be virtualized anytime soon.

Early NFV adopters will  be challenged as they work through internal issues like breaking down their organizational silos and adapting their business models to a quicker, more agile manner of provisioning and controlling network resources and services. 

What happens to the network IT guy when the majority of network equipment disappears and is transformed into virtual appliances? Who maintains a compute server that’s also implementing many higher layer networking functions?  What trouble shooting tools will be available for NFV entities?

Automation and self service are crucial for the network operator to deploy services quicker and hence realize more revenues.   CenturyLink’s Feger said it best: “If you’re on a nine-month release strategy, your network isn’t really programmable.”

“Agility is an asset. You can only tame complexity,” noted Heavy Reading analyst and event host Jim Hodges, who quoted Brocade’s Kelly Herrell from an earlier presentation. “As an industry, we realize complexity is an inherent part of what we’re doing, but it’s something we have to address.”

Infonetics Research released excerpts from its 2014 Data Center and Enterprise SDN Hardware and Software report, which defines and sizes the market for software-defined networks (SDN). 

SDN MARKET HIGHLIGHTS:
.    Vendors are seeding the market with SDN-capable Ethernet switches in the data center and enterprise LAN
.    The leaders in the SDN market will be solidified during the next 2 years, as 2014 lab trials give way to live production deployments
.    Bare metal switches are the top in-use for SDN-capable switch use case in the data center and are anticipated to account for 31% of total SDN-capable switch revenue by 2018
.    Infonetics forecasts the “real” market for SDN-that is, in-use for SDN Ethernet switches and controllers-to reach $9.5 billion in 2018
.    The adoption of SDN network virtualization overlays (NVOs) is expected to go mainstream by 2018

ANALYST NOTE:
“There is no longer any question about software-defined networking (SDN) playing a role in data center and enterprise networks. Data center and enterprise SDN revenue, including SDN capable Ethernet switches and SDN controllers, was up 192% year-over-year (2013 over 2012),” reports Cliff Grossner, Ph.D., directing analyst for data center, cloud, and SDN at Infonetics Research. “The early SDN explorers-NEC in Japan and pure-play SDN startups in North America-were joined in 2013 by the majority of traditional switch vendors and server virtualization vendors offering a wide selection of SDN products.”

“Even more eye opening,” continues Grossner, “In-use for SDN Ethernet switch revenue, including branded Ethernet switches, virtual switches, and bare metal switches, grew more than 10-fold in 2013 from the prior year, driven by significant increases in white box bare metal switch  deployments by very large cloud service providers such as Google and Amazon.”

                                 
ENTERPRISE SDN AND DATA CENTER REPORT SYNOPSIS:
Infonetics’ annual data center and enterprise SDN report provides worldwide and regional market size, forecasts through 2018, analysis, and trends for SDN controllers and Ethernet switches in use for SDN.  Notably, the report tracks and forecasts SDN controllers and Ethernet switches in-use for SDN separately from SDN-capable Ethernet switches. The report also includes significant SDN vendor announcements. Vendors tracked: Alcatel-Lucent, Big Switch, Brocade, Cisco, Cumulus, Dell, Extreme, HP, Huawei, IBM, Juniper, Midokura, NEC, Pica8, Plexxi, PLUMgrid, Vello Systems, VMware, others.

To buy the report, contact Infonetics: www.infonetics.com/contact.asp

RELATED ARTICLE:  

Huawei and 21Vianet Collaborate to Launch China’s Largest Commercial SDN Network

RELATED REPORT:
87% of medium and large N. American enterprises surveyed by Infonetics intend to have SDN live in the data center by 2016  http://www.infonetics.com/pr/2014/SDN-Strategies-Survey-Highlights.asp

“Software-defined networking (SDN) spells opportunity for existing and new vendors, and the time to act is now. The leaders in the SDN market serving the enterprise will be solidified during the next two years as lab trials give way to live production deployments in 2015 and significant growth by 2016. The timelines for businesses moving from lab trials to live production for the data center and LAN are almost identical,” notes Cliff Grossner, Ph.D., directing analyst for data center, cloud, and SDN at Infonetics Research.

“There’s still some work to do on the part of SDN vendors. Expectations for SDN are clear, but there are still serious concerns about the maturity of the technology and the business case. Vendors need to work with their lead enterprise customers to complete lab trials and provide public demonstrations of success.”

SDN SURVEY HIGHLIGHTS  (July 2014):

• Infonetics’ enterprise respondents are expanding the number of data center sites and LAN sites they operate over the next 2 years and are investing significant capital on servers and LAN Ethernet switching equipment
• A majority of survey respondents are currently conducting data center SDN lab trials or will do so this year; 45% are planning to have SDN in live production in the data center in 2015, growing to 87% in 2016
  • Respondents’ plans for LAN SDN are nearly identical to their data center plans
• Among respondents, the top drivers for deploying SDN are improving management capabilities andimproving application performance, while potential network interruptions and interoperability with existing network equipment are the leading barriers
• Meanwhile, enabling hybrid cloud is dead last on the list of drivers, a sign that SDN vendors have some work to do in educating enterprises that SDN can be an important enabler of hybrid cloud architectures
• On average, 17% of respondents’ data center Ethernet switch ports are on bare metal switches, and only 21% of those are in-use for SDN
• Nearly ¼ of businesses surveyed are ready to consider non-traditional network vendors for their SDN applications and orchestration software

 RELATED RESEARCH:

•   87% of medium/large N.A. enterprises say they intend to have SDN in data center by 2016 (see above summary)
•   $1 trillion to be spent on telecom and datacom equipment and software over next 5 years
•    SDN and NFV to bring about shift in data center security investments                                                                  

Summary of Michael Howard’s NFV migration talk at 2014 Hot Interconnects:

http://viodi.com/2014/09/05/2014-hot-interconnects-hardware-for-software-defined-networks-nfv-part-ii/

INFONETICS WEBINARS:

Visit www.infonetics.com/infonetics-events to register for upcoming webinars, view recent webinars on-demand, or learn about sponsoring a webinar.
.    Making Your Network Run Hotter With SDN (View on-demand)
.    NFV: An Easier Initial Target Than SDN? (View on-demand)
.    SDN and NFV Roundup of Trials and Deployments (Oct. 23: Learn More)
.    SDN: vSwitch or ToR, Where is the Network Intelligence, and Why? (Oct. 30: Sponsor)

Infonetics Research released excerpts from its 2nd quarter 2014 (2Q14) Enterprise Routers report, which tracks high end, mid-range, branch office, and low-end/SOHO router revenue and ports.  There was no seasonal rebound in enterprise router sales in 2Q14, as the market was down 9% from one year ago.

2Q14 ENTERPRISE ROUTER MARKET HIGHLIGHTS:
.    Worldwide enterprise router revenue totaled $867 million in 2Q14, just a 1% sequential gain in a quarter that typically sees a strong seasonal pickup; Unit shipments are still growing, up 6% year-over-year
.    Meanwhile, enterprise router sales dipped 9% in 2Q14 from the year-ago quarter (2Q13)
.    The good news in 2Q14: demand for higher-performance routers was strong; High-end and mid range router unit shipments were up by double digits year-over-year, while branch office and low-end routers posted more muted growth
.    Asia Pacific is once again the top-performing region for enterprise routers in 2Q14; North American sales tumbled 19% year-over-year, and EMEA sales fell 11%
.    U.S. vendor performance for enterprise routers was mostly down on a year-over-year basis in 2Q14, while Chinese vendors gained as preferences in China shift to local vendors Huawei and ZTE as well as the H3C division of HP

ANALYST NOTE:
“For the second quarter in a row, enterprise router sales disappointed, and revenue is now trending downward. Demand for routers is still strong, as indicated by rising unit shipments, but discount pressure, preferences for local and lower-cost vendors in China, and lower public sector sales drove down revenue,” notes Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research. 

ENTERPRISE ROUTER REPORT SYNOPSIS:

 Infonetics’ quarterly enterprise router report provides worldwide and regional market size, vendor market share, forecasts through 2018, analysis, and trends for high-end, mid-range, branch office, and low-end/SOHO router revenue and ports. Vendors tracked: Adtran, Alcatel-Lucent, Brocade, Cisco, HP, Huawei, Juniper, NEC, OneAccess, Yamaha, ZTE, others.

To buy report, contact Infonetics:

 www.infonetics.com/contact.asp.

RELATED REPORT EXCERPTS:
.    Cloud is our number-one networking initiative, say enterprises in Infonetics’ latest survey
.    Tight battle for 2nd after Cisco in Infonetics’ enterprise networking infrastructure scorecard
.    $1 trillion to be spent on telecom and datacom equipment and software over next 5 years
.    Infonetics releases Global Telecom and Datacom Market Trends and Drivers report
.    Enterprise router market off to a rough start, plunges 14% sequentially

In sharp contrast to the enterprise router market, Dell’Oro Group,reports that the Service Provider Edge Router market grew to its highest level ever, gaining four percent in the second quarter of 2014 versus the year-ago period, contributing to a record quarter for the Service Provider Router market overall. 

“Demand drivers varied by country as all regions grew versus last year,” said Alam Tamboli, Senior Analyst at Dell’Oro Group.  “In the United States, demand for routers in the backhaul for LTE networks has been one of the primary motives for investment in recent years, however this quarter service providers in the region also invested heavily into fixed networks.  In much of the world, routers used for LTE mobile backhaul networks continued to drive investment in the edge,” Tamboli added. –

The top Four SP Router Vendors Combined Accounted for Over 93% of the Market

:#1 Cisco Systems:  Remained the first-ranked vendor with increased revenue into EMEA and Asia.

#2 Alcatel-Lucent:  Achieved record Service Provider Edge Router sales, increasing revenue in every major region.

#3 Juniper Networks:  Delivered a record quarter in Edge Router revenues driven primarily by sales into North America.

#4 Huawei Technologies:  Saw a shift in demand as Service Providers in its domestic market, China, focused on mobile backhaul and cut back on routers for fiber deployments. 

More info at:  http://www.delloro.com/news/service-provider-edge-router-market-reaches-record-levels

Introduction:

We compare and contrast two keynote speeches from opening day (Aug 26th) of the 2014 IEEE Hot Interconnects conference, held at Google’s campus in Mt View, CA.  The focus is on disruptive innovation giving rise to radically new hardware..or not?

Abstract:  The God Box is Dead, by J.R. Rivers of Cumulus Networks

The maturing landscape in both interconnect technology and consumer expectations is leading a time of innovation in network capacity and utility. Complex systems are being realized by loosely coupling available and emerging open components with relevant, consumable technologies enjoying rapid times to deployment. This talk will highlight the historical precedence and discuss these implications on future system architectures.

Presentation Summary:

In his 2014 Hot Interconnects keynote talk J.R. Rivers, co-founder and CEO of Cumulus Networks, said:  “The God Box is dead.”  That meant not to expect any new revolutionary pieces of hardware (like the IBM 360 maintrame in the 1960s to Apple’s iPhone in 2007) anytime in the near future.  “The IT industry is unlikely to create a new piece of hardware that will elevate a market that is mature,” he added.

Author’s Note:  The first time I heard about a “God Box” was during the 1998-2000 fiber optic buildout boom.  Many start-ups were making “Multi-Service Provisioning Platforms (MSPPs), which they claimed could do any and all networking functions.  Hence, MSPPs were referred to as “God Boxes.”  After the fiiber and dot com bust in 2001-2002, many of the new age carriers (CLECs) went bankrupt. They (and not the ILECs) planned to run fiber to commercial buildings in support of either n x G/10G Ethernet OR SONET/SDH OC12 or OC48 access.  After their demise. most of the MSPP companies disappeared.

Among the reasons Rivers cited to support his position:

1.  The decline of research:  Government investment in research is declining, while corporate R & D for most companies is much more Design then Research (Google is a likely exception).  Venture Capital and corporate research is evolutionary, seeking incremental improvements in existing technologies and products.

2.  The (semiconductor?) supply chain is mature.  [No clarification provided]

3.  Components improve (in price-performance, power, size, etc) faster than they can be re-invented. Microprocessors vs Network Processors was given as an example, where the former has evolved to lower performance gaps with the latter (due to continuation of Moore’s law).

Other observations and advice for researchers and new product developers:

1.  “Go places no man has ever gone before. Don’t rehash a design just to make incremental improvements.”

2.  Aim at a broad market- especially for components.  Niche markets disappear quicker than most think.

3.  Tracking a benchmark is better than the current generation of silicon.  To clarify this point, J.R. wrote in a post conference email:  “The point here is that many companies work on a piece of technology based on the current version of that technology (for example my CPU is way better that today’s i7) without taking into account likely evolutions in the current form as well as planning a roadmap based what the incumbents are likely to build towards. A recent example of this in the interconnect world is the Fulcrum Microelectronics story.”

4.  Need a 4 X speed improvement over what’s available today in silicon, e.g. switch silicon (Broadcom), network processors (Cavium), I/O and Bus interconnect (PLX Technology- recently acquired by Avago Technologies).  If that can’t be achieved, the newly targeted silicon won’t gain significant market share.

For a systems developer, time to market and flexibility are vital to success. The hardware produced should facilitate rapid provisioning of services and be able to run various types of software/firmware.  J

J.R. shared an experience he had as a systems designer at Cisco where he helped develop their Nuova switches:  “After releasing some recent ASIC-heavy products, Cisco found that what really mattered to customers was the provisioning system and the software. In the end, that provisioning system could have sat on industry-standard servers and been almost as successful,”  Rivers said.

Q&A:

ONF Executive Director Dan Pitt (Alan’s IEEE colleague for 30+ years) asked J.R. to please tell us how his talk applied to Cumulus Networks – a very innovative software company.  Mr. Rivers respectively declined to do so, even though the audience (by a show of hands) indicated they were very interested in Cumulus.  In fact, it was one of the reasons I attended the first day of the conference!   Rivers said he’d talk to audience members off line about Cumulus, but then he disappeared as the morning break began (at least I couldn’t find him then or later).

Prof. David Patterson (UC Berkeley) challenged Rivers by saying that when Moore’s law ends (perhaps in 2020), there’ll be a lot more opportunities for tech innovation.

Abstract: Flash and Chips: A Case for Solid-State Warehouse-Scale Computers WSC) using Custom Silicon, by David Patterson, PhD and Professor UC Berkeley

The 3G-WSC design emphasis will shift from hardware cost-performance and energy-efficiency to easing application engineering. The reliance on flash memory for long-term storage will create a solid-state server that has both much faster and more consistent storage latency and bandwidth. Custom SoCs connected by optical links will enable servers in a 3GWSC to have better network interfaces and be one- to two-orders of magnitude larger than the servers of today, which should simplify both application development and WSC operations. Thus, a WSC of 2020 will be composed of ~400 3G-WSC servers instead of ~100,000 4U servers.

Such a 3GWSC server would certainly be considered a supercomputer, but unlike those for high performance computing, it will be multiprogrammed—for both interactive and batch applications—be fault tolerant so as to be available 24×7, and be tail tolerant to deliver predictable response times.

Presentation Highlights:

Prof. Patterson noted that new market opportunities happen when existing engineering technologies change.  One recent example is server architecture changes with virtualization and the move to cloud resident data centers.

The Professor observed that Moore’s law (doubling of transisters per same size die every 18 to 24 months) to three years and will slow to five+ years before it becomes defunct for SRAMs and DRAMs in 2020.  Flash memories may or may not perpetuate Moore’s law.

[During my interview with him at 2014 Flash Memory Summit, Professor Simon Sze₁ said that Moore’s law for SRAM/DRAMs actually stopped around 2000 or 2001, but continued for Flash memories.]

Note 1.  History Session @ Flash Memory Summit, Aug 7th, Santa Clara, CA: Interview with Simon Sze, Co-Inventor of the Floating Gate Transistor by Alan J Weissberger

http://ithistory.org/blog/?p=2163

When Moore’s law is dead or slowing to a crawl, there will be new opportunities for innovative custom silicon, according to Prof. Patterson.  “When scaling (of transistors) stops, custom chips costs will drop,” he said.  There will then be more ASICs developed and that will be supported by new hardware description languages to facilitate new designs.  

All that will give rise to the next generation of Warehouse Scale Computers (WSC).  It will be imperative to address “tail tolerance” in order to build new computing machines with predictable response times for all operations.  Then, we actually may see new God boxes emerge, the UC Berkeley Professor concluded.

In a post conference email, Prof. Patterson wrote:  “The God Box is not dead. The iPhone created the smartphone phenomena in 2007 and the iPad led to the tablet in 2010, both of which outsell PCs. The past is prelude, and the recent past suggests more God Boxes are coming in the near future.”  

This author agrees as there are likely to be more instances of disruptive tech innovation in the coming years.

Reference:

http://www.hoti.org/hoti22/keynotes/

Addendum:  

In a post conference email, Mr Rivers responded to Prof Patterson’s comment about the iPhone:

“Prof. Patterson’s comments around iPhone and iPad as related to the PC… the point he missed is that in both the smartphone and tablets, Apple’s hardware innovations are not their differentiators and that world is rife with industry standard hardware… there is not a God Box in that industry anymore (I’ll hold up the iPhone as a GodBox for the first 4 years of existence).”

3 other articles on the excellent 2014 Hot Interconnects conference are at: viodi.com

Infonetics Research released vendor market share and preliminary analysis from its 2nd quarter 2014 (2Q14) Service Provider Routers and Switches report. (Full report available by Aug. 29.).  Also see companion report highlights below.

2Q14 CARRIER ROUTER AND SWITCH MARKET HIGHLIGHTS:
. Worldwide service provider router and switch revenue, including IP edge and core routers and carrier Ethernet switches (CES), is up 20% in 2Q14 over 1Q14, to $3.9 billion
. Though the quarter’s increase was solid, the long-term trend is reflected in the decline of 4% from the year-ago quarter (2Q13)
. The IP edge router, IP core router, and CES segments all had double-digit revenue gains in 2Q14 from 1Q14
. On a year-over-year basis, EMEA is the only region to achieve positive revenue growth (+3%) in the carrier router and switch market in 2Q14, while all regions-North America, EMEA, Asia Pacific, and CALA-are up quarter over quarter
. The usual suspects continued to battle it out for the top 4 router and CES market share spots: Cisco stayed in the lead in 2Q14, with Alcatel-Lucent, Huawei, and Juniper (listed in alphabetical order) in a fight for the 2-4 positions
. Infonetics expects global service provider router and switch revenue to grow at a 2.8% CAGR from 2013 to 2018

Analyst Comment:

“As we’ve been cautioning, service providers of all sizes are being more guarded with their router spending habits as massive network transformation goals involving software-defined networking (SDN) and network functions virtualization (NFV) translate into specific activities and milestones. But this does not mean router and switch spending will tank or even take a sizeable downturn,” notes Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research.

Continues Howard: “Core router upgrades and replacements prompted by the move to 100GE and paired with many aging core routers drove the core router segment to 11% sequential growth in the second quarter of 2014, and with a lot of capacity ‘in the ground,’ we believe core routers will stay positive for the full year.” 

ROUTER & SWITCH REPORT SYNOPSIS:
Infonetics’ quarterly service provider router and switch report provides worldwide, regional, China, and Japan market share, market size, forecasts through 2018, analysis, and trends for IP edge and core routers and carrier Ethernet switches. Vendors tracked: Alaxala, Alcatel-Lucent, Brocade, Ciena, Cisco, Coriant, Ericsson, Fujitsu, Hitachi, Huawei, Juniper, NEC, UTStarcom, ZTE, others. To buy the report, contact Infonetics: 

www.infonetics.com/contact.asp

Companion Report: Router and Switch Vendor Leadership: Global Service Provider Survey

Infonetics Research released excerpts from its annual Router and Switch Vendor Leadership: Global Service Provider Survey, which explores service providers’ perceptions of edge router and carrier Ethernet switch (CES) manufacturers and their criteria for choosing vendors.

ROUTER / SWITCH SURVEY HIGHLIGHTS:
. In addition to being named the top router/CES manufacturers by carriers in Infonetics’ survey, Alcatel-Lucent, Cisco, Huawei, and Juniper are also the leading vendors worldwide in router/CES revenue market share
. Making up a distant second tier of vendors as rated by service providers are, in alphabetical order, Adtran, Ciena, Ericsson, Overture Networks, Tellabs, and ZTE
. In the survey, operators also rank vendors of carrier Ethernet switches and routers based on 10 specific criteria: technology innovation, security, management software, price to performance ratio (value), product reliability, pricing, product roadmap, financial stability, solution breadth, and service and support
. Over 80% of service provider router and switch spending is on edge routers and carrier Ethernet switches (CES)

Analyst Comment:

“The carriers participating in our latest router/switch survey tell us that when it comes to choosing an edge router/CES manufacturer, it’s product reliability, value, and service and support that matter most,” notes Michael Howard, Infonetics Research’s co-founder and principal analyst for carrier networks. 

Howard continues: “Then in an open-ended question, we asked carriers to name the top 3 edge router/CES manufacturers and Cisco came out on top, with 90% of our respondents naming them, followed by Juniper, Alcatel-Lucent, and Huawei. Three out of these four vendors earn top marks from our service providers in at least two of the top vendor selection criteria.”

ABOUT THE SURVEY:
For its 18-page router/switch vendor leadership survey, Infonetics interviewed network equipment purchase-decision makers at 31 incumbent, competitive, and mobile operators and MSOs from Europe, the Middle East, and Africa (EMEA), Asia Pacific, North America, and the Caribbean and Latin America (CALA). Together, the operators represent 41% of global telecom capex. The survey sheds light on how service providers select router and carrier Ethernet switch (CES) manufacturers, whose equipment they have installed and will evaluate for future purchases, and which manufacturers they consider to be leaders in key manufacturer selection criteria. To buy the report, contact Infonetics:

www.infonetics.com/contact.asp

RELATED REPORT EXCERPTS:

. Infonetics’ August Carrier Routing, Switching, and Ethernet research brief:
http://www.infonetics.com/2014-newsletters/Carrier-Routing-Switching-and-Ethernet-August.html
. Operators plan to move security, QoS, VPN, other services to virtual routers, shows survey
. Infonetics Research unveils new logo
. $1 trillion to be spent on telecom and datacom equipment and software over next 5 years
. Ethernet 10G and 100G service revenue set to grow to 300% by 2018
. Telecom operators spending $150 billion over 5 years on carrier Ethernet gear, driven by IP

SDN WEBINAR:
Join Michael Howard Sept. 4 at 11:00 AM EDT for Making Your Network Run Hotter With SDN to examine SDN architectural concepts that address challenges operators face today, including a look at actual operator SDN deployments. Attend live or access the replay at: http://w.on24.com/r.htm?e=828549&s=1&k=F60165254CA9F9103599DE4F83EDD3BC.

ANALYST CONFERENCE CALL FOR CLIENTS:
Clients, join Michael Howard Sept. 11 at 12:30 PM EDT for his live carrier routing and switching market recap and outlook, or view on-demand: www.infonetics.com/cgp/login.asp?id=865.

Infonetics Research released vendor market share and preliminary analysis from its 2nd quarter 2014 (2Q14) Optical Network Hardware report. (Full report published by August 25.).  Kim Peinado, VP Marketing at Infonetics wrote in an email:  “While our headline focuses on Internet Content Providers boosting North America’s growth this quarter, Asia had an even bigger spike, led by Huawei and ZTE, which helped the global market offset year-over-year declines in other regions (see notes in the bullet points of the release).”

• In North America, internet content providers (ICPs) such as Google and others generated a wave of optical spending at a handful of vendors including Adva, BTI, and Infinera, altogether accounting for an estimated $40 million surge in 2Q14
• Worldwide optical network hardware revenue, including SONET/SDH and WDM, totaled $3.3 billion in 2Q14, a sequential gain of 27% aided by strong seasonal performances from Huawei and ZTE
• Global optical spending is roughly flat year-over-year (2Q14 from 2Q13) as strength in Asia Pacific offset weakening spending trends in EMEA
• Worldwide WDM equipment revenue in 2Q14 is up 6% year-over-year
• The 1st half of 2014 brought another huge flood of 100G WDM shipments by Alcatel-Lucent, Ciena, Cisco, Huawei, and Infinera
• Ciena’s and Infinera’s North American optical revenue grew rapidly on a year-over-year basis in 2Q14, while Fujitsu’s and Alcatel-Lucent’s decreased

 OPTICAL ANALYST COMMENT:

“While the term ‘tier-1’ is traditionally associated with the incumbent operators of Europe and RBOCs in North America, it is now qualitatively clear that tier-1 spending growth is coming from the competitive dark fiber and internet exchange carriers. These carriers, as well as vertically-integrated internet content providers (ICPs), provide a growing portion of core internet connectivity and intra-datacenter capacity,” notes Andrew Schmitt, principal analyst for carrier transport networking at Infonetics Research. 

Clients, log in to join Andrew Schmitt Sept. 5 at 9:00 a.m. PDT for his live optical hardware market recap and outlook, or view on-demand: www.infonetics.com/cgp/login.asp?id=874.

Infonetics’ quarterly optical hardware report provides worldwide and regional market size, market share, forecasts through 2018, analysis, and trends for metro and long haul SONET/SDH and WDM equipment, Ethernet optical ports, SONET/SDH/POS ports, and WDM ports. Vendors tracked: Adtran, Adva, Alcatel-Lucent, Ciena, Cisco, Coriant, Cyan, ECI, Fujitsu, Huawei, Infinera, NEC, Padtec, Transmode, Tyco Telecom, ZTE, and others.

To buy the report, contact Infonetics: www.infonetics.com/contact.asp

Related news article:  Telstra Picks Ericsson, Ciena for Optical, SDN/NFV

http://www.lightreading.com/nfv/nfv-elements/telstra-picks-ericsson-ciena-for-optical-sdn-nfv/d/d-id/710370