How SDN and NFV lead to prosperity and increased productivity

In July 2010 Matt Ridley did this wonderful TED talk which explains it all:


About 5 minutes into the presentation, he paraphrases an example first given by David Ricardo in 1817. Translated to software components and associated activities, individuals and organizations can benefit from cooperation and trade even if one company is better in all areas in absolute KPI terms, due to the comparative advantage.

For example: if a developer A takes 1 week to build a database back-end and then 2 weeks to build a web GUI for it, and a second, slower developer B takes 4 weeks and 3 weeks respectively, both can benefit by working together; the first developer can specialize in the database and the second in building the GUI. Even if we assume that parallel work is not possible and the database must be finished before work on the GUI can get started, by working together both developers can save time: for both projects, A spends 1+1=2 weeks on the databases, and B spends 3+3=6 weeks on both GUIs; both have saved a week of work, and can do more projects per year: increased productivity.

Of course, once developer A has done a couple of databases he/she gets better at it, develops or acquires some tools and scripts to speed up the process and may then only require 3 days for a new project ( and likewise for the GUI specialist ). This fundamental process of specialization or division of labour forms the basis for economic growth and prosperity.

So how does this relate to Software Defined Networking(SDN) and Network Functions Virtualization (NFV)? Most routers today are built as a combination of software and hardware; the software is provided by the same vendor that also produces the hardware. There is cooperation and trade with other vendors for the hardware and software parts ( e.g. using Broadcom chipsets, a derivative of some Linux distribution as operating system, etc. ) but the final product is closed - it can only be upgraded through the processes and designs of the original vendor. And because a typical router has an economic lifetime of about 5-7 years, an investment in a particular router locks an organization to the abilities and roadmap evolution of the associated vendor for a fairly long period, relative to the speed of innovation in telecom and the Internet.

SDN and NFV (the distinction varies depending on whom you talk to) decouple software from hardware, and allow those components to be supplied by different, specialized (eco-systems of) vendors. They enable a redistribution and de-composition of previously co-located integrated functions (software modules), leading to a further refined division of labour - not only in terms of who programs the software, but also who installs it, maintains it, hosts it, etc. etc. In other words, they fundamentally change the traditional value chain. And - under normal market conditions - this model will prevail over the traditional model, because of the more advanced division of labour and the associated gains in productivity. It represents the next stage of evolution.

Virtual fountains of Youth

Cloud is here to stay, and companies big and small are struggling to adapt. There is no shortage of articles with advice on what to change.

Organizations are living organisms. They are born, they grow and develop, they evolve to a certain size and at some point they dissolve (die) like all other organisms. The question is whether this is just me making fatalistic observations, or if there are fundamental laws at work which truly make these cycles inevitable.

The article referenced above suggests that telecom service providers should own their own destiny, by hiring people with knowledge typically found at vendors today. The thing is that telecom service providers are already full of smart people. The approach of outsourcing certain tasks and responsibilities to external parties is fundamental to achieving scale and sufficient focus on core activities, enabling telecom organizations to specialize and differentiate. To "beat" OTT players like Google and Amazon, trying to become like them isn't the answer. Those new hires would find existing organizational structures with barriers and limitations, most likely the very reasons why some of them left these old shells for newer, greener pastures in the first place.

I see a clash of generations, mature organizations versus relatively new players. Even though the average age of the people working at these organizations may not differ much, their management, structure and agility does. The younger organizations are somehow better adapted to embrace modern technologies known as "Cloud" or "SDN" or "NFV" today.

Is this merely survival of the fittest? Or can we find ways to fundamentally change our existing organizations - if so, what does this proverbial Fountain of Youth look like?

The Software Defined Enterprise

Increased online activity around  topics like Software Defined Networking (SDN) and Network Function Virtualization (NFV) shows revived market interest in the networking aspect of the { compute, storage, networking } triade that forms the foundation of distributed systems in general, and the Internet in particular.

To a large extend, these concepts are nothing more than rephrased expressions of existing ideas. Virtualization and abstraction are not new, and anyone claiming that they are has simply not been around long enough. Still, things are not the same today as they were before. So what is different, and why, and how should we adapt to cope with this new reality?

Clay Shirky sheds some light on this in his book "Here Comes Everybody". Technological advances like broadband Internet have radically changed the world we live in, and this both enables and requires new ways of organizing our activities. It does not matter how we call it - enterprises need to adapt their processes and the behaviour and mindset of their employees in order to survive, evolve and procreate. Herein lies the true value of things currently being discussed under the name of "SDN" and "NFV".

Over the next few months I'll be exploring this topic in more depth. For now, let's start with a name: I am calling it the "Software Defined Enterprise"

Fortune favours the Programmable : Stacking the odds with SDN/NFV

The Internet is full of benefits ascribed to either Software Defined Networking (SDN), Network Function Virtualization (NFV), or both. Improved flexibility and agility, reduced costs, higher profits - you name a benefit, and someone will tell you it is provided as a built-in feature. In fact, it is hard to find a benefit that is not associated with these latest hypes.

And yet - SDN/NFV isn't only a hype. There can be real substance behind these concepts, when implemented properly with actual code to support the claims. One example is something I am currently working on - a prototype which demonstrates a way to reduce average latency and latency outliers of web flows for highly scalable elastic applications, providing better control over service delivery and moving beyond "best effort" quality that is typical of today's cloud environments.

I call this "stacking the odds", and it fits my definition of SDN/NFV ( I prefer not to make arbitrary distinctions between the two - my prototype could be positioned as either or both, it really does not matter much from a technical perspective ). Unfortunately I cannot disclose any details at this point.

<Disclaimer: this blog reflects my personal thoughts, and is not related to my employer>