Data center and enterprise SDN market to exceed $3 billion by 2017 says Infonetics

"The important question that everyone wants answered is, 'What's the real market for SDN?'," says Cliff Grossner, Ph.D., directing analyst for data center and cloud at Infonetics Research. And the market research firm has attempted to answer that question. In its newly released Data Center and Enterprise SDN Hardware and Software report, Infonetics says the data center and enterprise software-defined networking (SDN) market will be worth over $3 billion by 2017.

While the Open Networking Foundation (ONF) has begun to consider how to apply SDN to carrier transport networks (see “Open Networking Foundation plans its 2013”) and several systems houses have launched their own efforts, the Infonetics report covers SDN controllers and Ethernet switches in use for SDN – what the research firm calls “the 'real' market for SDN” – separately from SDN-capable Ethernet switches.

"It's still early days, but our research over the last two years confirms that SDN controllers and Ethernet switches in use for SDN will play a role in enterprise and data center networks, growing to a $3.1 billion market by 2017," says Grossner. "Wide scale in-use SDN deployments will occur first in the data center with large enterprises and cloud service providers, followed closely by the enterprise LAN. We're already seeing significant use cases for SDN in the enterprise LAN providing security and unification of wired and wireless networks, and enabling BYOD (bring your own device)."

Infonetics points out that the market is still young and that the majority of enterprises are still “kicking the tires” on SDN. Nevertheless, the space has seen early deployments for the large data centers of cloud service providers and large enterprises such as Google, NTT, AT&T, Verizon, DT, BT, and China Mobile.

Meanwhile, vendors have already begun shipping SDN products. This year has seen offerings from such companies as Alcatel-Lucent, Big Switch, Brocade, Cisco, Cumulus, Dell, Extreme, HP, Huawei, IBM, Juniper, Midokura, NEC, Pica8, Plexxi, Plumgrid, VMware, and others, Infonetics points out.

Looking forward, Infonetics expects 10% of Ethernet switches will be in use for SDN by 2017. North America, where SDN got its start, will see nearly 50% of the SDN revenue market share in 2017 as well, according to the report.

Infonetics’ forecast for SDN revenues is slightly more optimistic than that of Transparency Market Research, which believes SDN revenues will be $3.52 billion by 2018 (see “Software-defined networking market worth $3.52 billion by 2018 says Transparency Market Research”).

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