The valuation of nascent SDN companies is enormous given the
state of the market. One would be lead
to think that the market for SDN solutions is imminent. Is it?
While the business value proposition, beyond “F’ Cisco, has merit the
roll-out of SDN solutions cannot, and will not, occur nearly as rapidly as
those with vested interest would lead you to believe.
The primary customers for SDN solutions, service providers (SPs)
and large enterprises are by nature risk adverse. SPs have huge geographic disperses networks,
investors and bureaucratic regulators breathing down their necks. Enterprises worry about, among other issues,
earnings per share and business continuity.
Given this environment how can SPs and enterprises rollout
SDN rapidly? Their choices are “Rip
& Replace” and “Cap & Grow”. Is
the SDN value proposition so great as to justify the former? I think not.
The question then is how fast can they cap existing investments
can and grow the new SDN solution?
Questions to consider include; how many Class 5 switches
have been scrapped? How long did IMS take to be fully deployed? As I’ve
stated in previous article1 SDN is not magical that it can violate
innovation adoption conventions. We know
the typical SP sales cycle. Lab
evaluation, Lab trial, field trial, market trial, regional deployments. Each of these can take 12 to 24 months.
Let us not forget organizational issues as well. Who’s in the lead for SDN deployment, IT or
network operations? Whose budget will
pay for and support the SDN system?
SDN is not a simple transition. It’s not replacing one router with a new
generation router and reconnecting the cables.
Thus, the question: How long many
years will the “Year of SDN” last?
Notes:
To develop winning strategies contact me at gwhelan@greywale.com
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