Network effect

GOOGLE is a master of computing, but even it trips up every now and then. On December 10th several of the internet giant’s services, including Gmail and its Chrome web browser, were disrupted by a fault in the firm’s computing infrastructure. The problem was quickly resolved, but Google’s hiccup shows how important it is for companies to ensure that the equipment and software that underpin corporate computing systems run as smoothly and efficiently as possible.

Hence the growing buzz in the IT world about a new technology known as software-defined networking (SDN), which promises to make networks both cheaper and easier to operate. Its most ardent fans reckon that the new technology could even undermine the dominance of Cisco, an American company that has long been the king of the networking market.

Those forecasting regicide think SDN will revolutionise today’s networks, which rely heavily on expensive, proprietary combinations of routers, network switches and software made by Cisco, Juniper Networks and other firms. Techies are still struggling to come up with a definition of SDN in language simple enough for humans to comprehend, but essentially it is the use of software that lets computer folk create networks they can reconfigure quickly and centrally without having to fiddle with individual routers and switches, which is costly and time-consuming.

Chris Weitz of Deloitte Consulting reckons firms using SDN can save up to 50% on their networking bills, which on average account for 10-15% of IT budgets. Some savings come from cutting out “carbon middleware”, as network engineers jokingly refer to themselves, and from buying more basic—and thus cheaper—hardware. But Kyle Forster, a founder of Big Switch Networks, an SDN start-up, says the technology’s biggest advantage is that it lets firms get far more computing capacity out of their existing kit. Big Switch reckons customers can cut more than $500,000 from the cost of setting up and operating a typical rack of 40 high-end servers. Given that data centres contain thousands of servers, the potential savings are huge.

Better still, SDN makes it easier to reconfigure a network to, say, launch a new application for employees or customers. Its boosters liken it to a mobile-phone operating system onto which new apps can be loaded quickly and seamlessly. Small wonder, then, that companies such as Facebook and Google have been studying SDN carefully. Google runs two vast networks—one that links its huge data centres together and another that delivers its services to the outside world. The company has already deployed SDN across its data-centre network (which was not involved in this week’s snafu) and says that extending it to the external network is “inevitable”. Many big financial institutions and telecoms firms are also experimenting with the technology.

Sniffing an opportunity to mint money, venture capitalists have been pouring cash into SDN start-ups such as Big Switch, Nicira and PLUMgrid. “A couple of years ago there weren’t many people investing here,” says Mike Volpi of Index Ventures, an early player in the SDN field. “Now it’s a big party.” Large tech firms such as VMware and Brocade have been snapping up SDN tiddlers. In July VMware paid a whopping $1.3 billion for Nicira, which had only just shipped its first offerings.

Even some true believers fear SDN is in danger of being overblown. “The technology is riding the fine line between promise and hype,” says Rick Tinsley, the boss of Silver Peak Systems, a networking firm. Sceptics fret that cost savings could easily be eaten up by the expense of new SDN controllers and software. Some recent studies suggest this is unlikely, but more evidence will be needed to assuage this fear. Nor are corporate IT folk convinced yet that SDN will commoditise routers and switches. In a recent survey conducted by InformationWeek, a tech-industry publication, less than a third of the 250 IT professionals questioned said they were sure networking gear would be dumbed down because of SDN’s rise.

That will give some comfort to Cisco, which trousered $46 billion of revenue in its latest fiscal year. The firm reckons few companies will rip up their existing networks. And it thinks many will combine SDN with traditional networking technology. Verizon, a big American telecoms firm, is likely to take this approach. Prodip Sen, a Verizon executive, says some parts of its core network will not benefit from SDN, but it will be invaluable in areas such as Verizon’s cloud-computing business.

Nevertheless Cisco’s fat margins will almost certainly shrink somewhat because of SDN’s introduction, which may explain why the firm has been shedding thousands of jobs to streamline its operations. It has also been financing a secretive internal venture dubbed Insiemi, which is said to be working on a fully-fledged SDN offering. The king of computer networking is unlikely to give up its crown without an almighty fight.