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Looking Beyond Cost Savings with SDN and NFV

February 25, 2014 - 1 Comment

Cisco SDN and NFVA few weeks ago when we announced the Cisco APIC Enterprise Module, in response to a post by Cisco VP Jeff Reed, David had quite a lengthy comment to which I’d like to respond.  His specific question (within the full comment) was:

Do you see an upside for more value-added offerings — beyond the current anticipated cost-savings debate about the promise of SDN/NFV technologies?

First, thank you David for your questions.  In short, Yes.  At Cisco we see a lot of value in offering services to our Enterprise customers and also to our partners who offer managed services to their customers. Let me expand on this.

Cisco is fully aware of the emerging market segments with the still nascent SDN technology adoption. As you say, larger telcos and cloud service providers are looking at SDN/NFV with open hardware assessments and are more interested in scaling their deployments of multi-tenancy architectures. Whereas small and medium sized enterprises are evaluating SDN with a more application-centric approach. The main concern, given their modest investment infrastructure, (compared to the telcos and cloud service providers) is about having agile IT that can respond quickly to their business needs.

We have SDN solutions that address both these segments with our Application Centric Infrastructure (ACI) approach coupled with the Cisco ONE Platform and the APIC (Application Policy Infrastructure Controller) we just announced. This is where our 30 years of experience in networking comes to bear and differentiates our approach to SDN/NFV for the different market segments and network domains (Data Center, WAN, Access). Cisco’s “lessons learned” approach is exactly why we created ACI as we see the role of the network evolving to address the application economy and help our enterprise and telco customers alike with our SDN/NFV solutions. You are right about Cisco being a full-service provider, across all the network domains.  We  bring an end-to-end approach in creating and providing SDN/NFV solutions with a single controller strategy with our APIC on Cisco ONE Platform.

Further, at a tactical level, Cisco is bringing together the Product and Services teams that are working together very closely to understand, evaluate, create and deploy SDN/NFV solutions across the different domains. SDN/NFV is not only about cost-savings (mainly OpEx, as that is 70% of the TCO) but adding capabilities of innovation that add more value to our customers.

For example, with the automation capabilities of APIC Enterprise Module we are enabling significant OpEx savings to start with, and with the location-based analytics capabilities and open APIs (with ONE DevKit) we are also envisioning creating capabilities for new business models and increasing the competitive advantages for our retail customers. We see this as both an upside for our customers and partners and also for Cisco as a end-to-end infrastructure provider. Cisco has the experience, product depth and scale from network infrastructure to advanced services for our customers to easily take advantage of SDN technologies.

I appreciate your detailed, insightful comments and I look forward to conveying more details on such value-added offerings around SDN in future blogs.  Also, I look forward to any questions or comments you all may add in the comments below.

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  1. Satish, first and foremost, thank you for taking the time to respond to the questions that I raised about the recent ACI and APIC launches. I can't speak for other market analysts, but I personally appreciate the additional details that you've shared here. I believe that CIOs at multinational companies -- and perhaps others that will perform due diligence on SDN related procurement reviews -- will seek additional guidance from Cisco. The notion of an "application economy" is perhaps yet another area where the depth and breadth of the Cisco channel partner ecosystem could also become a source of significant value-added capabilities, over time. Moreover, while I understand that the OpenFlow standard theoretically creates an environment where all API developer talent can contribute something to the cause, I'm wondering if Cisco Certifications for SDN (network installation, operations and troubleshooting, etc.) would be helpful.