10 Networking Predictions For 20129:00 AM EST Wed. Dec. 28, 2011
The year 2011 was a wild one for the networking segment, with acquisitions galore, the emergence of new players and tech trends like software-defined networking and IPv6 dominating the discussion. So what's going to happen in 2012?
We at CRN don't have the predictive powers of a Carmac the Magnificent, but we sure do spend a lot of time chatting with vendors, VARs and customers about what's top of mind all day, every day. Here's a look at 10 things we feel pretty darn confident are going to happen in the new year.
Cisco spent much of calendar 2011 playing defense, cutting costs, cutting staff and trying to convince the channel, Wall Street and basically anyone familiar with Cisco's rise to the top of the networking pile that it hasn't lost its guts.
Next year, Cisco will try to show many of its detractors that it's striking back -- and we're already seeing signs of that aggression take hold. From a sharper-teeth strategy for assessing and discussing the competition to what Infonetics called a "blowout" quarter for Cisco in Ethernet switching during 2011 Q3 -- an area where Cisco has taken some lumps throughout the past year -- not to mention its sustained growth in key areas like data center, video and collaboration, the Cisco mojo will be back in action in a big way.
Xeta Technologies, Unis Lumin, INX and Cross Telecom are all nationally known VARs and integrators with major networking footprints -- and all were acquired, or entered the acquisition process, sometime in the past 12 months. Carousel Industries, NWN, Strategic Products and Services and Softchoice are also all nationally known VARs and integrators with major networking footprints -- and all have been active acquirers in recent years.
This is a trend that isn't going anywhere, folks. With so much market-moving turmoil in the channel ecosystems of Cisco, Avaya, Juniper and other networking bigwigs, it's an active time for both cash-rich VARs on the hunt for smaller players, and bottoming-out networking VARs hanging "for sale" signs outside their windows. Expect that to continue throughout 2012 in all corners of the networking channel, from data networking to voice/telephony to service provider and carrier communities.
CRN knows of at least one well-known wireless LAN specialist whose acquisition by a major tier one channel vendor with an expanding networking footprint fell through this year after coming thisclose to consummation.
It makes sense why WLAN companies are being eyed: a.) they're hot; b.) there are a lot of them; and c.) with wireless' role now so crucial to the entire network infrastructure, standalone wireless companies may see their futures in doubt unless they acquire, get acquired themselves or broaden their capabilities to areas like security and data center optimization. Bank on the acquisition of at least one of the well-known smaller wireless LAN companies -- Meru? Ruckus? Meraki? Xirrus? Aerohive? -- in 2012.
And while you're at it, bank on a major acquisition in network security -- specifically of one of the next-generation firewall (NGFW) vendors, like Palo Alto Networks, Check Point and Sourcefire, getting love from industry analysts and channel partners at present.
If you're a networking VAR in search of a lucrative new specialty, maybe managed telecom services is your cup of tea. Thanks to a push around managed services, a tighter embrace by VARs of annuity revenue streams associated with networking and telecom, and the convergence of the IT VAR channel with the telecom/carrier agent channel, you're going to see heightened discussion around this space, with customers of all sizes spending less time worrying about the management of their various communications services and spending more time opening their wallets for solution providers that can do that stuff for them.
According to Insight Research, managed telecom services will grow from a $140 billion market in 2012 to a $266 billion market in 2016 -- a more-than-doubling in just four years. "Stability has returned to the telecommunications industry, and with the continued shift to wireless and cloud-based services we are forecasting strong growth in the managed and outsourcing services segments," said Fran Caulfield, Insight Research managing director, in a recent note.
OK, fine: we made this prediction last year, too. But CRN spends a lot of time talking with networking VARs and the customers they serve, and despite every effort by its naysayers to brush aside the idea of Microsoft as a legitimate UC contender against the likes of Cisco, Avaya, Siemens, ShoreTel and the rest, Microsoft Lync appears to be gaining traction with enterprise customers and solution providers alike.
How much traction will be a solid debate for 2012, but it's clear that in the year since Lync's launch in Nov. 2010, Microsoft's rapidly evolving UC strategy is sound -- particularly as Microsoft's cloud platforms come into sharper focus as well.
Every year we try to highlight at least one networking player that despite a few channel stumbles, or false starts, or difficult quarters, seems poised for greater embrace by solution providers in the new year.
While there are a couple of networking and data center alternatives that would fit this bill going into 2012, we're going to take a chance on Brocade, which three years after its acquisition of Foundry Networks -- and a little time now since a non-acquisition by Dell -- is finally starting to impress VARs with a mix of technology smarts, focused marketing and channel programs that amply reward loyal partners. If Brocade isn't a vendor in good standing with the networking channel a year from now, we'll be surprised.
With businesses of all sizes finally embracing video at respectable levels, the days of having to sell customers on a video strategy are past. Now, the discussion has started to move toward video optimization, a loosely-defined term we'll use to describe everything from infrastructure upgrades for video and rich media, to video content management and better ways of storing, sharing and streaming video, to video interoperability, or, the increasingly more important push around making video endpoints and video infrastructure products more compatible with one another.
Expect these trends in video optimization to be an even more important topic in 2012 with more customers wanting rock-solid, beautiful-looking video on phones and tablets as well as desktop and room based systems. Expect every vendor in the video spectrum, from Cisco to Blue Jeans Network, to come forth with some variation on, "We can make your video platform look/sound/smell/taste/feel really good, and here's how."
F5 Networks calls it the "application era," or a focus of IT managers on optimizing specific applications in addition to -- or in many cases, instead of -- the networks they run on.
F5 would know -- the little application delivery company that could passed the $1 billion mark for revenue in 2011 -- but isn't the only channel-friendly vendor trying to steer partners toward a greater focus on technologies that optimize, secure and make more relevant an enterprise customers' mission-critical applications. We've been seeing that heightened focus for a while now, but it takes time for a trend to grow legs, spawn marketing and incent enough followers to be taken seriously. That's going to happen for the application focus in a big way in 2012.
Sometime in the last two or three years, WAN optimization moved from niche specialty to full-on focus area for many solution providers looking to broaden what they could offer customers for networking, infrastructure and data center solutions. That means competition in the WAN-op space will only continue to increase, with cloud-focused startup players like Aryaka Networks and mobile WAN-op specialists like Circadence drawing swords on top players like Riverbed Technology, and other WAN op strongholds like Blue Coat that despite their challenges are looking to get more of the action. And just how much action is that? Well, Gartner has WAN optimization growing from the $700 million market it was in 2006 to exiting 2011 at $1.9 billion, with projections of tenfold growth over the next five years. Cha-ching.
If 2011 was the year when interest in software-defined networking (SDN) and networking virtualization hit critical mass, 2012 will be the year where it really breaks out. With lots of attention being paid to key SDN technologies like OpenFlow and on startup companies like Big Switch Networks, Vyatta and Nicira that are all doing really interesting things around network virtualization, you'll see a lot of pundits -- a lot of channel partners -- wondering what it all means for the future of this industry. Which is, of course, what'll make it such a fun discussion.