Cisco: SDN (ACI) Momentum Accelerating, But…

The implications of the pending Dell acquisition of EMC (and its 81% ownership of ) are still to be determined, but the deal will pose significant challenges for , not only for its VCE partnership and datacenter business, but also for its initiative. Both and VMware play in the space, but as one might expect from networking’s 800-pound gorilla, they aren’t in Cisco’s league. Yet.

At the end of September Cisco announced that Danske Bank, the largest financial institution in Denmark, was the 1,000th customer of its SDN offering, Application Centric Infrastructure (ACI). That’s a pretty significant accomplishment given that ACI didn’t start shipping until midway through 2014, and only to Cisco customers with — or prepared to buy — its . There were 2,650 such customers, and almost 600 of them had bought into ACI as of June, with that number almost doubling in the last quarter.

VMware is claiming 700-plus customers of its software-only SDN offering, NSX. However only 15% of the 1,700 ACI/ users are implementing the products in production mode: 150 for ACI, according to Cisco, and 100 for .

The movement to ACI is accelerating, confirmed Cisco’s Ish Limkakeng, VP of Product Management. He told IT Trends & Analysis that there are now over 4,200 N9K switches installed, and they’re “growing at the same rate as our ACI numbers.” The ACI growth, which isn’t limited to N9K owners, a result of both delivering a great product and “listening to our customers and making the enhancements our early adopters have asked for.”

The benefits of moving to SDN, or at least ACI, are impressive. A number of Cisco’s customers are claiming significant returns from ACI, including Symantec:

-5-year ROI: 441%;

-5-year total business benefits: $145 million;

-average annual business benefits over 5 years with Cisco ACI: IT infrastructure cost reduction – $10.08M; risk mitigation and business productivity – $25.27M; IT staff productivity – $8.50M;

-payback period: 11 months;

-reduction in time of application development life cycle: 87%; and,

-improved network operation staff efficiency: 79%.

Other benefits included: 87% faster application development life cycle; zero unplanned Cisco ACI–related downtime; 40 times more network backbone bandwidth; and 79% more efficient network operations and engineering once fully deployed.

Much like any other major technology transition, the adoption of SDN (and its carrier companion, Network Functions Virtualization or NFV) is moving slowly, but the momentum is growing. By 2020, the combined revenue impact of SDN, NFV, network virtualization and other next-generation networking initiatives will exceed $105 billion per year.

As we’ve already seen with virtualization and servers, the movement to software-defined everything poses a significant challenge to vendors of proprietary – and expensive/high-margin – hardware like Cisco. Limkakeng said Cisco was very pragmatic when it looked at the emergence of SDN and “everything was going to be all software and no hardware”. It’s always been about what’s best for solving the customer’s problem”, i.e. ACI.

“We use the best technology possible… what’s the best way to solve the technical problems that we see.” What started out as software-defined datacenters, software-defined networks, “it’s never been true that hardware is going to become irrelevant,” he said.

Author: Steve Wexler

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