What's more, there are many opportunities for new companies to innovate. As we move to a more virtual, dynamic data center, each layer in the seven-layer network stack -- dominated today by multibillion dollar companies such as Cisco, Juniper, F5 and Check Point -- goes up for grabs. By our estimates, $35 billion in IT spend can be disrupted by SDN technologies, which means that upward of $150 billion in market value can be created over the next few years.
The big opportunity for entrepreneurs is to rethink and re-architect every network service using SDN constructs -- separation of the control and data plane built on a commodity hardware stack, elastic, on-demand scaling, and simplified management and configuration.
We've already seen multiple startups emerge to reinvent core network services such as security, load balancing and switching in a distributed, highly elastic manner. For example, Nicira (acquired by VMware) started the trend by innovating at the lowest layers of the network stack, allowing for a programmable, software based network; Embrane is re-architecting load balancing and security for the cloud; Plexxi is reinventing the top of the rack switch; And Pertino is reinventing the wide area network for the cloud era.
We are in the early innings of the network revolution and I am confident that the next five years will bring even more innovation as entrepreneurs continue to rethink the networking space. It's not often that multibillion-dollar markets are disrupted by a confluence of hardware trends, software innovations, and the determination of a group of visionary entrepreneurs. This should be fun to watch.
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