New innovations in networking are being triggered because of at least four broad-based macro trends:

  1. Cloud: Growth of business-critical applications in the cloud (SaaS, PaaS, IaaS)
  2. Mobility: More branch offices and mobile workers using a variety of devices
  3. Security: IT administrators losing visibility and policy control over their networks
  4. Speed: Employee reliance on faster access to apps with lower latency and higher bandwidth

Before we dive into these issues, let’s first agree on some basic terminology:

  • Cloud networking is a new way to market distributed enterprise networks. It delivers enterprise-class network capabilities around the globe via a highly resilient, multi-tenant application that requires no capital investment in networking equipment. Unlike traditional hardware-based legacy solutions, cloud networking is extremely simple to implement, enabling businesses to deploy remote locations in minutes and operate their distributed networks via a cloud-based service, while maintaining centralized control and network visibility. These services are subscription-based.
  • Software-defined networking (SDN) separates the network’s control (brains) and forwarding (muscle) planes, creating one of the most disruptive technologies to hit networking in decades. SDN originated with researchers in campus networks such as UC Berkeley and Stanford with their approach to open standards like OpenFlow. SDN gained further momentum with commercial adoption in cloud data centers such as Google.
  • Network functions Virtualization (NFV) offers a new way to design, deploy and manage networking services. NFV decouples the network functions, such as network address translation (NAT), firewalling, intrusion detection, domain name service (DNS), caching, etc., from proprietary hardware appliances, so they can run in software. NFV’s origins trace to a consortium of service providers.

Lately, SDN and NFV have generated tremendous buzz in the networking industry. However, if you ask customers how much they have budgeted for SDN or NFV, you will generally be greeted with a puzzled look. I believe the “hype cycle” around both SDN and NFV has been driven mostly by vendors and less so by customers. Don’t get me wrong; I believe in several of the key benefits promised by SDN and NFV, such as:

  • Abstraction between the control-plane and the data-plane
  • Faster delivery of new features in the network through the use of virtualized services
  • Leveraging low-cost, commodity hardware with more open, programmable software

Still, there are major gaps between “marketecture” diagrams often describing SDN/NFV potential capabilities and real solutions that solve specific problems for customers. When I talk to Enterprise customers about what areas of their IT budgets they are growing, the most common answers I get across all verticals and organizational sizes are: (1) cloud services (2) cyber security, and (3) mobile applications. Further, when I ask that same IT audience what areas of their budget they are shrinking to make room for growth, the common areas include: (a) legacy software with low usage and (b) maintenance contracts on big-iron hardware. Customers vote with their wallets and their wallets are telling us where they see the biggest IT opportunities to save money, protect their company data, and increase overall productivity.

The most innovative customers, the ones who have considerable experience with cloud services, have highlighted one of their biggest frustrations with legacy networking choices: the sheer number of hardware-based appliances required to add new capabilities to their networks. Customers are frustrated with the stacks of branch office gear they are asked to purchase, configure and maintain from legacy/incumbent vendors like Cisco, Juniper, Riverbed, and BlueCoat just to get a fast, reliable and secure network. For example, here is a list of commonly purchased branch office networking appliances (initial capex):

  • Branch router: $1k-$5k USD
  • Branch firewall/VPN: $1k-$10k USD
  • Branch web proxy: $1k-$10k USD
  • Branch WAN optimization: $2k-$25k USD

The combination of the capex and opex in the branch drives the TCO for these solutions well above where customers can sustain. Unfortunately, avoiding these costly appliance purchases has not left good alternatives. In any distributed Enterprise with multiple branch offices, IT admins typically have two primary options for their network designs:

Options 1: Full private back-haul
Disadvantages of this option include:

  • High capex and opex with multiple networking appliances and expensive private WAN links (complex, costly)
  • Inefficient and often congested network path to maintain visibility and policy control by hair-pinning all traffic back to corporate HQ (poor performance)

diagram legendoption 1 full back haul

Option 2: Private vs. Internet split
Disadvantages of this option include:

  • IT loses visibility and policy control in the branch for Internet/cloud destined traffic (poor security)
  • Unpredictable Internet performance and reliability for cloud-hosted applications (poor reliability)
  • Different systems for HQ/datacenter vs SaaS/Internet cloud applications (higher opex, complexity, costly)

diagram legendoption 2 split traffic

A new option:
New cloud networking services are coming to market soon that will give businesses a third option better suited to the macro trends mentioned earlier of: cloud, mobility, security, and speed. This upcoming third option overcomes the disadvantages of the first two options while delivering several important benefits, such as:

  • Delivers Enterprise networking services (virtualized) from the cloud
  • Transforms consumer-grade broadband into business-grade reliable WAN connectivity
  • Simplifies the network and increases visibility and policy control for IT administrators
  • Improves application performance for both SaaS and DC-hosted apps
  • Reduces overall costs by eliminating hardware and private WAN expenses

Venrock, NEA and The Fabric have led the investment of $21M USD into VeloCloud, which is pioneering this third option called Cloud-delivered WAN to help mid-range Enterprises that need a new approach to their data center-to-branch office connectivity.

We encourage you to stay tuned for more details regarding what VeloCloud has built, early customer reactions, and how you can try it for your environment.


More to come…

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