2017 Trends in Networking

Transcription

1 PREVIEW 2017 Trends in Networking DEC 2016 Jennifer P. Clark, Vice President Ken Rehbehn, Principal Analyst Jim Duffy, Senior Analyst, Networking Network infrastructure has always been characterized by slow incremental change restricted by the cost, time and effort needed to deploy connections and hardware. In 2017, trends will underscore the massive change that is transforming the network, enabled by wireless, mobile and virtualization technologies Research, LLC

2 ABOUT 451 RESEARCH 451 Research is a preeminent information technology research and advisory company. With a core focus on technology innovation and market disruption, we provide essential insight for leaders of the digital economy. More than 100 analysts and consultants deliver that insight via syndicated research, advisory services and live events to more than 1,000 client organizations in North America, Europe and around the world. Founded in 2000 and headquartered in New York, 451 Research is a division of The 451 Group Research, LLC and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication, in whole or in part, in any form without prior written permission is forbidden. The terms of use regarding distribution, both internally and externally, shall be governed by the terms laid out in your Service Agreement with 451 Research and/or its Affiliates. The information contained herein has been obtained from sources believed to be reliable. 451 Research disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although 451 Research may discuss legal issues related to the information technology business, 451 Research does not provide legal advice or services and their research should not be construed or used as such. 451 Research shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. NEW YORK SAN FRANCISCO LONDON BOSTON 20 West 37th Street 3rd Floor New York, NY P F Geary Street 9th Floor San Francisco, CA P F Gower Street London, UK WC1E 6HH P +44 (0) F +44 (0) Federal Street 5th Floor Boston, MA P F ABOUT THE AUTHOR JENNIFER P. CLARK VICE PRESIDENT Jennifer P. Clark is Vice President, Network Research for 451 Research. She heads the Network research practice, providing actionable insight into network technology and infrastructure, examining the challenges facing both enterprises and network operators in provisioning the local, wide-area and radio access networks, and the solutions and technology that will meet the demands of 4G and 5G mobile networking, cloud computing and the Internet of Things (IoT). Jennifer s personal areas of research include software-defined networks (SDN), network functions virtualization (NFV), network orchestration, mobile backhaul, network policy management, the Evolved Packet Core, DNS, IPv6, carrier Ethernet, and core and edge routers. II

3 Key Findings Software-defined WAN (SD-WAN) adoption will effectively cap further investment in the multi-billiondollar MPLS VPN market by lowering costs for last-mile connectivity while improving ease of operation and activation speed. Enterprise networking vendors will pay billions for remaining wireless LAN (WLAN) pure plays to stoke their growth engines for at least the next decade. IoT, analytics and security initiatives will expand in 2017 and ownership of WLAN assets will be integral to fulfilling these initiatives. Network and service orchestration and management is still baffling the mightiest of carriers; it will be the single largest deterrent to large-scale carrier deployment of software-defined networking (SDN)/ network functions virtualization (NFV) in LTE Advanced Pro will stand as the most important 3GPP release since the launch of LTE, while 5G will continue under development. The year will be one of preparation for Korea s pre-standard 5G demonstrations during the 2018 Olympic Games as well as possible pre-standard deployments for fixed wireless access. III

4 Executive Summary INTRODUCTION Networking is exciting again. We have heard this repeatedly at recent industry conferences and events. After years of evaluating speeds and feeds or weighing the merits of competing protocols we are, in 2017, fundamentally changing the way we build and use networks. In every science fiction TV series, there is an episode where some humanoid makes an evolutionary leap forward and sheds its physical body, transforming to pure energy no boundaries, everywhere at once, with expansive knowledge. This is a pretty apt analogy to what s happening in the network, starting with the dissolving edge as enterprises reach out to their remote offices with software-defined WAN (SD-WAN) connectivity and connect more users and devices through wireless LAN (WLAN) technology. All of our 2017 trends underscore the impact of wireless, mobile and virtualization technologies. Each of these technologies is moving us closer to our goal of seamless connectivity anywhere, anytime between any group of users, devices or applications. Our first trend examines the impact of virtualization, in the form of SD-WAN, on enterprise networking. Enterprises now have the choice of moving from MPLS-based VPN connectivity to a less expensive, more flexible and more operationally straightforward software-defined WAN (SD-WAN). The dozens of SD-WAN startup vendors and service provider implementations are a testament to the momentum behind this new technology. So too is our estimate of nearly 20% CAGR of SD-WAN revenues through In our second trend we look at the M&A activity around WLAN. WLANs today are the predominant enterprise campus network access medium, as mobility and cloud transform IT. We expect to see enterprise networking vendors in the coming year pay billions for remaining WLAN pure plays to position themselves for growth for the next decade. WLANs and access point aggregation switches are blurring the edge of the network with software-defined networking (SDN), virtualization and cloud management, imbuing the network with the same dynamic, on-demand characteristics that we are seeing in the storage and compute environments. The service providers are part of this change, transitioning their network architectures with SDN and network functions virtualization (NFV). They are challenged in this transition by the size and complexity of their networks, particularly when compared to the relative immaturity of the SDN and NFV offerings. Network and service orchestration will remain the most perplexing elements in the new network architecture with dozens of competing products, standards and open source projects. However, 2017 will see the service providers make headway in other transition trouble spots, such as overcoming organizational resistance and selection of NFV infrastructure. The mobile cellular network is the lynchpin of the trend toward dissolving the network edge and connecting a continuously expanding community of users, applications and devices. However, while 5G technology may continue to grab headlines in 2017, as the carriers and their customers debate the technologies and use cases that will characterize 5G, it will be LTE Advanced Pro that does most to move the radio access network (RAN) environment forward. New capabilities in 3GPP Release 13 for cost-effective low-power, wide-area (LPWA) IoT support open up a market previously denied to operators. Emerging competition from license-exempt LPWA IoT network options such as SIGFOX and LoRaWAN galvanized the mobile network operators (MNOs) and the 3GPP to settle on a new IoT radio access protocol for Release 13 called narrowband IoT (NB-IoT). Release 13 also provides a dramatic injection of license-exempt spectrum to supplement limited and costly license spectrum assets and specifications covering mission-critical services such as push-to-talk, which is important for public safety networks. IV

5 2017 TRENDS IN NETWORKING 451 Research s 2017 Trends in Networking Source: 451 Research, 2016 SD-WAN Will Go Prime Time The WLAN Market Will See Further Consolidation Ongoing Challenges with SDN and NFV Will Hobble Wide-Scale Deployment in Service Provider Networks LTE Advanced Pro Will Stand as the Most Important 3GPP Release Since the Launch of LTE 5G Will Remain More Smoke than Fire WINNERS Enterprises that avail themselves of the reductions in cost and administration of their WANs, and the nimble flexibility that SD- WAN promises; SD-WAN vendors and service providers that successfully enable customer transitions from the rigid branch office WAN infrastructures of the last 20-plus years Companies that own WLAN assets and technologies and can clearly demonstrate their importance to broader high-growth opportunities; independent WLAN pure plays that can demonstrate the criticality of their offerings to broader markets beyond campus network access Best-in-class or large system vendors; carriers that place themselves in the center of the fray Network equipment provider professional service teams; MNOs with established enterprise sales operations; enterprises using expensive push-totalk land mobile radio systems Network operators with opportunities to tout 5G; enterprise-focused professional services organizations LOSERS Companies that resist the SD-WAN wave; vendors and service providers continuing to push the old way of deploying, operating and managing WANs Enterprise network infrastructure companies that do not own WLAN assets; independent WLAN pure plays that fail to demonstrate how their technology and product portfolios go beyond campus network access Vendors with a hardware-leveraged balance sheet; carriers resisting the culture change Mobile network operators with outdated radio access networks; early unlicensed spectrum IoT operators Governments looking for more spectrum auction revenue; startups with radical new radio mechanisms METHODOLOGY Reports such as this one represent a holistic perspective on key emerging markets in the enterprise IT space. These markets evolve quickly, though, so 451 Research offers additional services that provide critical marketplace updates. These updated reports and perspectives are presented on a daily basis via the company s core intelligence service, 451 Research Market Insight. Forward-looking M&A analysis and perspectives on strategic acquisitions and the liquidity environment for technology companies are also updated regularly via Market Insight, which is backed by the industry-leading 451 Research M&A KnowledgeBase. Emerging technologies and markets are covered in 451 Research channels including Business Applications; Cloud Transformation; Data Platforms and Analytics; Datacenter Technologies; Development, DevOps and IT Ops; Enterprise Mobility; European Services; Information Security; Internet of Things; Mobile Telecom; Multi-Tenant Datacenters; Networking; Service Providers; Storage; and Systems and Software Infrastructure. Beyond that, 451 Research has a robust set of quantitative insights covered in products such as Voice of the Enterprise, Voice of the Connected User Landscape, Cloud Price Index, Market Monitor, the M&A KnowledgeBase and the Datacenter KnowledgeBase. All of these 451 Research services, which are accessible via the web, provide critical and timely analysis specifically focused on the business of enterprise IT innovation. For more information about 451 Research, please go to: V

6 Table of Contents TRENDS 1 TREND 1: SD-WAN WILL GO PRIME TIME 1 RECOMMENDATIONS WINNERS LOSERS TREND 2: THE WLAN MARKET WILL SEE FURTHER CONSOLIDATION 3 Figure 1: Enterprise IoT Spending Will Rise Over 12 to 24 Months RECOMMENDATIONS WINNERS LOSERS TREND 3: ONGOING CHALLENGES WITH SDN AND NFV WILL HOBBLE WIDE-SCALE DEPLOYMENT IN SERVICE PROVIDER NETWORKS 5 Figure 2: Telco-Backed Open Source Groups RECOMMENDATIONS WINNERS LOSERS TREND 4: LTE ADVANCED PRO WILL STAND AS THE MOST IMPORTANT 3GPP RELEASE SINCE THE LAUNCH OF LTE 8 Figure 3: IoT Devices Primarily Use Wi-Fi and Ethernet for Connections RECOMMENDATIONS WINNERS LOSERS VI

7 2017 TRENDS IN NETWORKING TREND 5: 5G WILL REMAIN MORE SMOKE THAN FIRE 11 RECOMMENDATIONS WINNERS LOSERS THE LONG VIEW 13 FURTHER READING 14 INDEX OF COMPANIES 15 VII