The Economics of SDN

The widespread adoption of compute and storage virtualization has proven the value to be gained from decoupling application delivery resources. This value is derived from pooling compute and storage assets which leads to more efficient use of resources and lower operating costs. As virtualization has matured, the concept of the Software Defined Data Centre (SDDC) has led to increased use of automation to orchestrate the provisioning and consumption of virtualized resources which has led to even further cost savings. Adding network virtualization into the SDDC mix completes the virtualization of the completed application delivery infrastructure so that efficiencies are gained across all elements with reduced operational (OPEX) and capital (CAPEX) costs.


Change is constant and organizations need to not only react quickly to change but also to react efficiently and without disrupting ongoing operations. Having this agility baked into application delivery makes any change, whether large or small, a business as usual event that is non-disruptive.

  • Make change a business as usual event
  • Increase competitiveness through IT innovation
  • Speeds time to value with non-disruptive deployment
  • Improved service resilience provided with flexible infrastructure

IT benefits

Virtualization allows IT to be a driver and enabler within the organization as automation, orchestration and diagnostic tools move them from a break-fix mentality to being the engine room of the business.

  • Re-focus IT staff on enablement rather than containment
  • Total visibility on service status leading to quicker diagnosis and remediation
  • Increased automation reduces configuration errors
  • Leverage orchestration to dynamically reconfigure resources without intervention


With increased visibility and the flexibility to reassign resources on-demand, the cost of day-to-day operations can be significantly reduced.

  • Quicker issue diagnosis and reduced resolution times
  • Simplify change management with automation and orchestration
  • Leverage lower-cost white-box hardware platforms
  • Optimized staff usage with focus on enablement rather than containment


Virtualization makes do more with less a reality as resources such as compute, storage and networking are right-sized to the application workloads. The commoditization of compute and network building blocks drives further value by avoiding top-tier vendor acquisition costs.

  • Avoid overprovisioning of resources
  • Reduced vendor lock-in
  • Unlock value of underutilized resources

Financial Benefits

Virtualization of the complete application delivery stack right down to the network delivers significant financial benefits and enables measurement and chargeback. The bottom line impact of virtualization can be measured in reduced resource usage and efficiencies in service delivery.

  • Reduction in estate and environmental resources such as cooling and power
  • Increased efficiencies in service management through automation
  • Better insight into resource usage by business units

2X Reduced Latency

KEMP compared the latency of a web application using SDN optimzation against an unoptimized environment. The KEMP SDN load balancing deliverd a 2x improvment latency by optimizing the SDN fabric to use the best possible path in a congested environment.

2X Available Network Capacity

In this scenario, we characterized the delivery of webpages using KEMP SDN Adaptive in a congested environment. Using three different page sizes of 1k, 8k and 64k and optimization via SDN-port, SDN-path and SDN weighted round robin, a 2X improvement in delivery capacity was achieved.

10X Faster Time to Root Cause

One of the major if not most critical time consuming aspects of network management is visibility into the network to identify problems and quickly get to the root cause to triage a fix and solution to problems.

Many industry reports have come up with a benchmark of close to a working day. KEMP used statistics from a Forrester Total Economic Impact™ Study Prepared For Lancope that outlined an average 5 hour timeframe for diagnosis of the average ADC and network problem. This is based on taking one network engineering expert 5 hours to manually find, collate, review and analyze the data to correctly identify the root cause to a problem.

Using an SDN fabric on your network KEMP automates the manual work required to diagnose root cause, taking just minutes rather than hours. Once a fix is found updates can be automatically sent across the network to solve the problems, further reducing the amount of manual intervention to fix network problems.”

4X Application Delivery TCO

Many IT executives and management require some understanding of what the overarching financial benefits and total costs are going to be, especially when deploying or enhancing infrastructure with new and enhanced technologies. KEMP has focused on the TCO (total cost of ownership) for Application Delivery in a virtualized network using SDN fabric, NFV and automation.

KEMP compared the 3-year costs between a traditional physical form factor and a virtual form factor of an SDN-ware Virtual ADC delivery of functionality:

Size Form Factor Model Three Year TCO
Medium Physical LTM-4000 $89,836
Medium Virtual VLM-5000 $24,259

Replacing a physical LTM with a KEMP VLM the 3 Year TCO is over 4 times less for the sum of acquisition costs, ongoing support, maintenance, updates and training. Aside from the operational advantages as outlined in the above improvements in QoE, Delivery Capacity and Automation there are significant savings in year 1 through to a total 3 year TCO.

30% OPEX and up to 70% CAPEX Switching Savings

Gartner research indicates that a move to SDN enabled switches allows for replacement of expensive core switching platforms and can deliver capital savings of between 30% and 70% (CAPEX), and with OPEX savings of over 30%. Ref:

SDN enabled switches allow for the replacement of expensive switching platforms by maximizing use of underlying switch fabric with optimization of network paths to usage and capacity.

OPEX saving is due to reduction of manual work on individual servers and switches, and with the virtualization/centralization of many functions more tasks can be rolled up and managed at a time. A single network engineer can manage more setup, deployments and troubleshooting.

CAPEX reduction with the virtualization of network resources allows for less use of high end equipment, and allows organizations to get more out of less, and/or scale at a less incremental value. Added to the ability to reduce redundant capacity needs and costs.


KEMP can provide you with a simple Cost Benefit Analysis methodology to use for understanding your investment and the expected results from the deployment of Network Virtualization solutions using SDN, NFV and Automation from KEMP.

A Sample Use Case.

Taking 5 cost benefit criteria of many (KEMP has outlined up to 8), here is a simple ‘before <> after’ comparison of an investment in Network Virtualization:

Cost Benefit Criteria Baseline Formula Results
QoE Page Latency Performance $25,611 x 0.044 $11,331 220% Improvement
Capacity Page Delivery $1,949 x 0.5 $4,301 220% Improvement
Opex Time To Resolution $35,000 x 0.016 $5,60.00 99% Savings
Automation $24,000 x 0.5/td> $12,000 %50 Savings
Capex Three Year TCO VLM vs. Physical $89,000 x 0.25 $24,000 75% TCO Reduction
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