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SDN market to surpass $35 billion by 2018

As companies continue to increase their use of cloud computing, decision-makers are finding that their traditional infrastructure offerings just cannot keep up. For this reason, among others, executives are investing more in software defined networking.

A recent study by Plexxi, SDNCentral and Lightspeed Venture Partners revealed that vendors generated $10 million in revenue from SDN technologies in 2007 and roughly $252 million in 2012. This momentum is expected to continue in the coming years, as research suggests that the SDN market will aggregate sales surpassing $35 billion throughout the next five years.

"The rapid growth of software defined networking will have far-reaching impacts beyond the network," said Michael Bushong, vice president of technical marketing at Plexxi. "This new research shows that companies are already making buying decisions based on transitioning their networks to SDN. The momentum in the SDN market will accelerate in the next five years."

The growth of SDN
The study revealed that businesses are estimated to allocate approximately 2 percent of their IT budget on SDN-enabled equipment in 2013, though this is forecast to jump to 40 percent in 2018. Despite this transition toward software-driven networking, hardware will continue to play an important role in the infrastructure landscape. In fact, roughly 49 percent of data center network spending will go toward non-SDN switching and routing tools in 2018, compared to 46 percent that will be spent on SDN-enabled technologies.

"The market for software defined networking is growing faster than just about anyone predicted," said Matthew Palmer, partner at SDNCentral. "While past efforts to measure the size of the SDN market focused on existing deployments, a more accurate analysis of companies that are factoring SDN compatibility into their current buying decisions shows that the shift toward software-defined networking is already having a massive impact on businesses."

A separate Enterprise Networking Planet report said the SDN market will likely become more crowded with vendors in the coming years, especially as enterprises continue to implement cloud infrastructure services. For this reason, it will be important that decision-makers take the time to understand their organizations' specific needs and find the most appropriate provider for them.

As SDN gains momentum, the fundamental way businesses operate will change, allowing employees to be more productive and efficient without introducing new costs that will drive the budget through the roof.

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