DDI Landscape in a Cloud-First World

Data creation and the perceptive management of its uses is our new critical reality in a hyperconnected world with intelligent apps, IoT, machine learning, blockchain, 5G and more. While traditional networking excels in a tightly connected world, it is not designed for today’s rapidly evolving cloud infrastructure, apps and connected devices. These demands a new level of networking, designed from ground up to be agile, while remaining rock solid and secure, with visibility across the entire ecosystem.

It is a given that most enterprises are already relying on hybrid or public cloud platforms, at least for certain workloads. In addition, more hardware or third-party services may have been incorporated, creating enormous complexity that is absurdly difficult to manage. Infrastructure is all over the place and customers are getting their services through multiple environments. Complex network demands span diverse physical, virtual and cloud infrastructure.

What all these mean is that the drive for DDI services will only continue to rise with the advancement of our tech-driven world. DDI is an acronym that collectively refers to domain name services (DNS), Dynamic Host Configuration Protocol (DHCP) management and IP address management (IPAM) – core network services that make secure connectivity possible.

Highlighted below is a panoramic view of the DDI landscape as released in a Nov 2018 report by IDC:

How Is It Trending

While many of the market leaders remain strong players in DDI, there is a wave of smaller vendors that are gaining market share from vendors that have pivoted away from focusing on DDI. Now more than ever, enterprise applications are distributed across multiple different sites, from customer data centres to software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS) clouds. DDI platforms provide foundational connectivity functions to these myriad endpoints; they are used to secure connections to both internal and external sources and are increasingly being used to ensure high quality of service to any user on the network.

These are among the trends that led the DDI market to continue its growth in 2017 when the market rose 10.8% compared with 2016; the year prior, the market grew at 11.3%. The DDI market’s growth has moderated in recent years compared with other network infrastructure technologies mainly because of continuing market maturation.

While several smaller players have impacted the dynamics of the market in recent years, Infoblox remains the dominant player. Vendors have increasingly refined their value propositions to highlight the security benefits of their platforms as well as pitch modern DDI platforms as an integral enabling component of network transformation efforts.

Who Shaped the DDI Landscape

  • Infoblox. Infoblox continues to be the dominant player at above 50% share of market. Its market share has increased in each of the past three years, rising to 51.7% in 2017, up from 50.2% in 2016. The company, which had been publicly traded, was acquired by private equity firm Vista Equity Partners in September 2016. Historically having played in large enterprises, Infoblox also has strong offerings in the data centre and cloud provider markets and in both physical and virtual form factors.

The breadth of the company’s platform extends from on-premises to cloud hosted (through partnerships with Amazon Web Services and Microsoft Azure) and through certifications with VMware and OpenStack.

In May 2019, Infoblox launched BloxOne Threat Defense, which is a hybrid cybersecurity solution that leverages DNS as the first line of defense to detect and block cyber threats. It bundles Infoblox DNS Firewall, Infoblox Threat Insight, Infoblox Threat Intelligence Data Exchange (TIDE) and Infoblox Dossier. The BloxOne Threat Defense solution combines Infoblox’s on-prem (formerly ActiveTrust, offered in 2017) and cloud-based (formerly ActiveTrust Cloud) security solutions into an integrated hybrid offering that provides enterprises scale, flexibility, and reliability.

The company has built its market share leadership through its broad reach into Fortune 500 enterprises and thousands of medium-sized organisations running sophisticated private networks.

  • BlueCat. BlueCat Networks has performed strongly in recent years, with revenue growing 13.3% in 2017, bringing the company’s market share to 14.6%. The company has focused on the Fortune 2000 as its primary customer base.

The company has two main products: DNS Integrity is the core DDI platform that includes the Gateway automation platform that gives network professionals access to APIs and other scripts for automating workflows, managing whitelists, and implementing role-based access controls. DNS Edge, launched last year, gives cybersecurity and network teams visibility and control over internal and external DNS traffic, which helps block cybersecurity threats, simplifies DNS operations, and improves network performance.

  • BT Diamond IP. BT Diamond IP has continued its steady growth in recent years, increasing 8.0% in 2017 over 2016 to finish with $94.7 million in revenue and 13.9% market share. The company has a long history in the DDI market, dating back to the original company named Diamond IP being founded in 2002, which was acquired by British Telecom (BT) in 2007. BT Diamond has a range of DDI software (named IPControl), appliances (named Saphire), managed services, and DNS security services.

In June 2017, the company launched a new DNS Firewall service, which includes a dashboard for users to gain visibility into the DNS security platform, track malware, and centrally manage various regional DNS deployments around the globe. In June 2018, the company launched a Cloud Automation Appliance that allows organizations to coordinate cloud IP assignments with their IPAM services, creating a multicloud enterprise DDI platform.

  • EfficientIP. EfficientIP started in 2004 in Europe but has since expanded into the North American and Asian markets. The company has had some of the strongest growth rates in the industry in recent years, albeit from a smaller base compared with competitors. The company’s core platform is named SOLIDServer DDI, which integrates with VMware, Hyper-V, Nutanix, and OpenStack as well as public cloud platforms Amazon Web Services, Microsoft Azure, and Google Cloud Platform; it also integrates with vRealize and Microsoft Systems Center as well as management platforms Ansible, Chef, and Puppet.

Significant Market Developments

  • Steady growth continues.Data centre modernisation brings with it a need to upgrade DDI platforms to ensure they’re able to support dynamic and agile infrastructure environments. Meanwhile, as more organisations use cloud-based resources, DDI platforms need to support workloads running in those public cloud environments.  The DDI market grew from $551.0 million in 2015 to $613.1 in 2016 and grew another 10.8% to $679.4 million in 2017. The importance of DDI technology will continue to make the market an important area of investment by end users in the coming years.
  • Merger and acquisition (M&A).There has been a flurry of merger and acquisition activity in the DDI market in recent years. In September 2016, Infoblox, which at the time was a publicly traded company, was purchased by Vista Equity Partners, a private equity firm. Later in November 2016, Nokia purchased Alcatel-Lucent and in doing so Nokia gained the rights to the VitalQIP DDI platform. In February 2017, BlueCat was purchased by private equity firm Madison Dearborn. Nominum, a smaller DDI vendor, was acquired by Akamia in November 2017, showcasing how DDI platforms are being positioned as part of broader network management platforms. Expect future M&A to continue as these private equity firms look for potential exits and smaller DDI vendors grow and become acquisition targets or potentially begin to engage in M&A themselves.
  • A wave of new vendors.The DDI market has always had some bifurcation between enterprise and service provider–focused products, but there have been a wave of new vendors that have gained market position in recent years that have a completely service provider focus, such as Incognito. There have also been a wave of smaller vendors that have gained share by tackling the enterprise market in recent years, such as EfficientIP and TCP Wave. Finally, there are a cadre of vendors that have gained prominence in the Asian markets in recent years, including ZDNS.
  • DNS security.After a rash of high-profile breaches inside enterprise and service provider networks, DDI vendors have seized the opportunity to highlight the security benefits of their platforms. DNS-based security services provide a foundational level of visibility and security. Policies can be enacted that monitor connection made into or out of an organisation and automatically thwart any nefarious actions occurring in the network. Thus, securing enterprise and service provider networks from a DDI standpoint remains a significant opportunity.