2013: Virtualization to Disrupt Networking as We Know It Today - Executive Viewpoint 2013 Prediction: Midokura
Virtualization technologies have transformed the compute and storage industries and are starting to move into other key IT segments. In 2013, I predict the widespread adoption of virtualization technologies will evolve rapidly to transform the data center and the desktop alike, delivering concrete value and return on investment to businesses ranging from small-medium sized up to the enterprise. Further, I see virtualization disrupting the networking segment as we know it today and in a big way. I predict the interest in and demand for network virtualization and software-defined networking (SDN) will only grow, and the vendor landscape offering these solutions will grow in parallel.
In the coming year, early adopter success will pave the way for more mainstream adoption by proving the business case for network virtualization and SDN. These successes will drive product innovation in the space, both from start-ups and large networking vendors – likely through M&A activity. I anticipate several high-profile acquisitions in the network virtualization space (the acquisition of Nicira by VMware for $1.3 billion in 2012 was only the beginning). Things are going to heat up in M&A, and the valuations will be high.
No viable networking vendor wants to be left on the sidelines, so in 2013 all major networking companies will need to introduce their own SDN strategies to stay relevant. We have already seen this with Juniper, Cisco and VMware.
Despite various approaches, I believe overlay-based virtual networking solutions will capture most of the value around multi-tenancy, isolation and also VM mobility in 2013, because these solutions are specifically designed to simplify network requirements for IaaS. Commodity silicon helped replace proprietary chips and software common in networking. Following this trend, I believe switching fabric will become even more commoditized and technically simplified in 2013, requiring less specialized skills and driving down the costs and complexity of networking.
In summary, in this age of cloud computing, the limitations of the hardware-dependent network will naturally lead to more interest in network virtualization. It’s a very exciting time for this segment. Any major industry shift takes time, but just as virtualization has disrupted traditional compute and storage, innovation in network virtualization will continue to take off in 2013 and disrupt traditional networking in the enterprise.