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10:50 AM
Andrew Bach
Andrew Bach
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Half of Financial Services Companies Plan to Adopt SDN

Juniper survey finds 56% of finance respondents plan to adopt software-defined networking within a year.

The latest weapon in the financial services arms race is software-defined networking (SDN), with its potential to significantly reduce both operating expenses and time-to-market for new applications. The reality of server virtualization currently means servers can be provisioned in hours, but the bottleneck continues to be the network, which requires days, if not weeks, to provision. SDN changes this equation and brings network provisioning back on par with servers. 

When Juniper Networks surveyed financial services IT leaders it found that the majority have plans to deploy SDN technology. 

This new research released in July 2014 asked 400 IT leaders in finance (along with education, government, and healthcare) where they are in their SDN readiness. The research found the majority of finance respondents (56 percent) are aggressive in their plans to adopt SDN. In addition, they plan to do so quickly. Financial IT leaders say they plan to adopt SDN technology in as little as a year. Tied with education, finance was the fastest of any industry to note plans for adoption.

How financial IT leaders are grading themselves
When asked to grade their SDN readiness, 30 percent of financial respondents gave themselves an “A” or “B” grade, saying they were completely ready or almost completely ready to adopt. Further, 41 percent graded themselves a “C,” noting that they are somewhat ready to adopt SDN. It’s no surprise that financial leaders graded themselves higher in comparison with their peers from other industries. The industry has always been an aggressive consumer of new technology as a strategic weapon. Desire to adopt SDN is high because it is viewed as the next differentiator; application teams have an expectation that they will be able to self-deploy needed infrastructure. With SDN, IT can now enable the rapid deployment of new applications and services to support the business and its goals. 

SDN opportunities in finance
According to the research, IT leaders in finance see SDN having the biggest impact on network performance and efficiency, agility through automation and orchestration, and simplified network operations. Just as server virtualization increased overall efficiency and usage, SDN will enable institutions to get more out of their existing network assets. In addition, automated provisioning will both reduce network complexity and provide the data to enable “single pane of glass” monitoring and instrumentation. 

When asked what businesses are looking for in an SDN solution, financial IT leaders listed open-source technology higher than any other industry. The desire for an open-source solution should come as no surprise. Open-source offers the highest degree of flexibility in terms of choosing a best-of-breed solution. Further, it decouples the hardware decision from software and therefore assuages concerns about vendor lock-in on the hardware side.

What are financial IT leaders looking for?
When it comes to SDN, the top criteria financial service IT leaders are looking for when adopting an SDN solution include:

  • High availability and resiliency (32 percent)
  • Analytics and reporting (27 percent)
  • Automation and rapid provisioning (15 percent)
  • Scale (13 percent)

The common thread running throughout the top criteria cited above is the desire to be able to forecast and provision for demand ahead of time. This can only be accomplished by having analytics (intelligence in the network) built into SDN. IT is no longer viewed as a cost center; now it’s becoming an internal service provider held to service-level agreements (SLAs). As such, the need for analytics and reporting to ensure SLA compliance will only increase. It also offers the promise of greater visibility into the performance of the network on a real-time basis -- something that is currently only a vision for most IT and network leaders. 

Challenges remain for adopting SDN to meet financial services’ needs
Despite interest and progress, SDN deployment is not without its challenges. Following cost (41 percent), IT leaders in finance noted difficulty integrating with existing systems (38 percent) and security concerns (36 percent) as the top challenges to adoption. Most financial institutions comprise systems built in the 1970s, and replacing these legacy infrastructures in order to meet modern demands is akin to changing the engines on a plane while in flight. The financial industry now runs globally 24/7. With the rare exception of a new datacenter, the industry will need to integrate changes while customers continue to transact business in real-time. This can only be achieved with well developed and supported software. This will require a new type of deployment team that has the combined skill-set of server administration in addition to network operations.   

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