The Open Networking Challenge

By Patrick Moorhead - October 13, 2014
One would have to have been living under a rock to not have seen the “ice bucket challenge”. A few months back, people were dumping cold water on their heads in the name of charity. However, just as quickly as that fad showed up, it was gone, as all fads go. The “open networking” movement is getting a lot of attention as well, but in this case, I don’t think it’s a fad, and will have a significant impact on how businesses operate in the future. While the buckets of cold water have disappeared, the need for a revolution in networking continues and businesses are starting to hold their incumbent providers like Cisco SystemsJuniper NetworksAlcatel-Lucent , Hewlett-Packard and Brocade Communications Systems more accountable to their networking needs, or face an icy outcome as businesses could shift their purchasing elsewhere.  User groups like ONUG (Open Networking User Group) are taking a leadership role in transforming the networking industry to a more open approach, and I’d like to share my thoughts on it. Let me provide some background first. Today’s networks throttling business   While TCP/IP-based networks have increased IT’s capabilities, today’s networking holds back too many businesses. Companies want to move forward, take on new opportunities and expand to offer new services. While the business is ready, it’s more than likely that the network is holding them back. Networks are, unfortunately, too hardwired (excuse the pun) and inflexible. All of the configuration (without overlays) is manual. This is why every time a business has a great idea and wants to capitalize on it, the bucket of ice water is being dumped from their networking team – and yet another great opportunity passes them by because they just couldn’t move quickly enough. Just like the ice bucket challenge, in today’s business world opportunities can be viral, appearing quickly and disappearing just as fast. Move fast and there are untold riches. Taking too long means getting there, well, after the train has left the station. Compared to servers and storage, legacy networking has become the fly in the ointment. More programmable and automated networking will ultimately help a business stay on top of the competition and take more aggressive steps in the market. Networking, the last proprietary datacenter bastion For years, networking has been the domain of vendors that had protected the proprietary nature of the vertical stack and delivered less innovation, relying on high switching costs to keep their customers captive. But networking is going through a very interesting transition these days, its first major metamorphosis in 25 years. Businesses are starting to stand up to status quo and are demanding more open choice in networking. It’s not just the high capital expenditure and operating expense that is driving this demand, it’s also that businesses need more flexibility and a better growth trajectory. ONUG to the rescue The Open Networking User Group (ONUG) is a focused group of companies that are interested in expanding the availability of open networking technologies like Software Defined Networking (SDN), and programmable networks, helping make businesses more flexible, efficient and cost-effective. With almost 2/3 of the companies surveyed by ONUG saying that their networks are not open enough, there is clearly an unmet demand in the market. ONUG is working collectively with networking vendors to develop specific use cases that represent end customer requirements and encompass the needs from across the different vertical businesses. When the members pool their collective purchasing power, they have the strength to be the voice of the market, guiding the needs of open networking to the equipment providers. With their needs driving networking solutions, they can begin to integrate (or modify) the vendors’ solutions as well as begin allocating budgets towards the deployment of these solutions.vector-onug-logo ONUG networking vendor participation One might think that vendors would always be looking to shape their products around market needs, but unfortunately, in the world of networking, protecting the status quo often takes the driver’s seat when designing products. Instead, ONUG is pooling its collective purchasing power and industry positions to influence the changes that need to happen. Publishing the market requirements makes it harder for vendors to ignore the needs of their customers, as they have for years. Some of the largest companies like Arista Networks, Cisco Systems, Dell  and VMware will be on hand to listen to these influential customers. But at the same time some of the newer networking startups like NuageGlue NetworksVArmourViptela and Silver Peak will be there because they see this change in the status quo as an opportunity to break into the business in a big way. ONUG large enterprise user participation The customer side of the equation is represented by ONUG companies representing many different industries like financial services (Bank of America, Fidelity, JPMC, Citigroup and Credit Suisse), retail (Gap, Inc.), transportation (FedEx) and pharmaceutical (Pfizer) as well as others. There are 3 areas that the ONUG community is focused on with its members; each of these has the ability to drive more flexibility and lower operating expenses for businesses that take advantage of them.
  • Virtual Network Overlay creates a virtual network that sits on top of the physical network, allowing administrators to better provision and manage their assets, just as server virtualization allows server administrators to have this flexibility today.
  • Software Defined Wide Area Network ties together remote locations more easily by building the communications mechanisms into far more flexible software (instead of less flexible hardware) for more responsive provisioning and bandwidth management that can track to changing business needs.
  • Network Service Virtualization creates a virtual pool for network services (like security and load balancing), running them in software on commodity servers instead of on more expensive and less flexible network appliances.
ONUG fall meeting in New York City This month the group gets together for their fall meeting in New York, which will be an opportunity for customers to sit down and discuss their needs with vendors as well as view demonstrations of products that are targeted at the key use cases. I’ll be moderating  panel of IT business leaders following a fireside chat at the event where we will discuss how today’s networking is not meeting the needs of a business world that is rapidly changing and what can be done to help the industry better respond to networking customers’ needs. With vendors on hand at these meetings, the feedback can flow directly. Businesses that are seeing an increasing amount of their capital expenditures heading towards the networking line item or believe that networking is holding them back should be sending someone to participate – it’s in their own best interests. Wrapping Up Back to buckets. My advice to the team at ALS is the same as for traditional networking vendors: don’t count the chickens too early. For the ALS foundation, it’s virtually impossible for lightning to strike twice, so be careful when planning next year’s budget; it’s hard to plan on campaigns going viral (along with their corresponding donations). And for traditional networking vendors, be careful about ignoring the needs of the market. Your biggest customers are grouping together because the market is not delivering the openness that businesses demand. Back to networking. Customers are already testing solutions that they hope to move into production in 2015 because the opportunity to accelerate provisioning, lower CapEx/OpEx and bring more flexibility (with less lock in) is too appealing to pass up. But for widespread industry change all customers need to step up and take the challenge – to put their money where their mouth is so to speak. If businesses want a better way, they need to get involved – step up and take the challenge, because this is the only way to impact change in the market.
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.