Quantifying Benefits of Network Virtualization in the Data Center

26 May -2016: Network virtualization (NV) in the data center promises to improve service agility, simplify network operations, and reduce capital expenditures. One of the biggest challenges for IT professionals is to quantify the return-on-investment required to justify the costs of network virtualization and the changes it requires in their data center network operations.


Defining NV in the Data Center
NV provides the ability to create logical, virtual networks that are decoupled from the underlying network hardware. NV creates a logical, software-based view of the hardware and software networking resources (switches, routers, etc.). The physical networking gear (the underlay) is responsible for the forwarding of packets, while the virtual network (software) provides an intelligent abstraction that makes it easy to deploy and manage Layers 4-7 network services, including network security and application delivery control.


The Benefits of NV in the Data Center
Modern data centers have increased significantly in scale and complexity as compute and storage resources become highly virtualized. The rise of the DevOps style of application deployment means that data center resources must be agile and respond rapidly to changing workload requirements. Data center network technologies have been challenged to keep up with these rapidly evolving application requirements.

Network virtualization creates a logical virtual network that runs on top of a physical one, making it easy for IT to automate the provisioning of network resources. It also affords the flexibility to adjust the network as application requirements evolve. NV can reduce network provisioning time and dramatically simplify network operations. It helps the network better integrate and align with the highly virtualized storage and compute resources it is connecting, thus improving resource use and operational efficiencies.


Implementing NV in the data center requires the purchase of network software – thus incurring the initial licensing costs and ongoing support fees. In addition, network management must spend significant time to learn the new products, integrate NV with network hardware (underlay), and manage/maintain/update the virtual network over time.

Measuring the business benefits of network virtualization is challenging, as it relies primarily on operational (opex) improvements, which are traditionally difficult to measure and quantify. Network virtualization software can support network hardware cost reductions (capex) if implemented with white-box switches.
NV Operational Benefits<
The operational benefits of NV in the data center can be placed in four categories:

  1. Agility
  2. Scale
  3. Management
  4. Security

Although difficult to quantify, NV can provide significant benefits for IT organizations in all four categories.

  1. Agility

NV provides significant improvement in the time required to deploy network resources to new or existing data centers. IT organizations can leverage deployments of standard application stacks, with built-in networking topologies. NV enables the automation of service chains, including security profiles, to accelerate the rollout of new applications. The ability to quickly make adjustments to the network to support the business and optimize the application experience improves the value of the network.

  1. Scalability

Current network topologies are difficult to scale to large data center requirements. NV allows organizations to avoid the limitations that come with VLANs (which can only support 4,096 isolated networks) by providing support for more than 1 million virtual networks. The higher density of multiple virtual networks improves utilization, without running into IP subnet or VLAN conflicts.

  1. Management Efficiencies

NV provides the ability to centrally manage the distributed, virtual network and to monitor the key traffic-flow metrics. Deploying NV means that any changes made to the physical underlay network have no impact on the virtual overlay, reducing the time required to manage and maintain traditional networks.

  1. Security Benefits

With NV, organizations can deploy controls (firewall functionality) that segment the network and manage access to resources across different tenants within the data center network. Organizations can segment the network to control access to individual applications. This microsegmentation of data center resources can help contain security attacks, and it provides compliance benefits for sensitive applications.


Capex Savings
Assuming a new, greenfield data-build or the need to upgrade the data center network (e.g., from 1GB to 10GB), organizations can save significant dollars by implementing network software running on white-box switches. White-box Ethernet switches (from Accton, Quanta, etc.) typically cost 40 to 50 percent less than branded, integrated Ethernet switches from Cisco,  Arista, or HPE.

Recommendations for IT Professionals

Network virtualization allows IT organizations to deploy their network resources whenever and wherever they need them. IT can rapidly add the capacity to make sure the network delivers the performance and reliability demanded by evolving data center environments. NV provides improved, centralized management and offers micro-segmentation to improve data center security and increase compliance. For organizations facing network upgrades, the option to deploy network software on white-box switches can result in significant capex savings.

NV deployment is becoming mainstream in leading data center deployments. Organizations are likely to see strong ROI benefits from operational efficiencies – although this ROI is challenging to quantify. When evaluating the ROI of NV implementations for their data centers, IT professionals should consider the following questions:

  • Does your application environment require frequent changes to network resources and security policies?
  • What training costs are likely to be incurred to implement NV?
  • What impact does NV implementation have on data center security?
  • What are the challenges of operating legacy and virtual network elements in tandem?
  • Is your organization considering white-box switches to reduce network opex?
  • What resources (e.g., channel partners) are available to assist in the migration to NV?