SD-WAN Value Blog Part 2: Managed Service Provider Opportunities to Drive Value

Joel Stradling – Research Director, Business Network and IT Services

Setting the Scene with Research

The first of this two-part blog series can be read here: SD-WAN Value Blog, Part 1: Evolving the WAN to Drive Customer Experience TransformationJanuary 5, 2018.

In the below pie-chart (source: GlobalData Multi-Client Survey, October 2017), we asked a large pool of multinationals the following question:

Do you have a managed services provider (MSP) who helps operate your network?

74% said ‘yes’, while the remaining 26% said ‘no’.

Our conclusions for the majority 74% positive response is that this is driven by the need for an integrated portfolio of services and fast responses for adjustments, maintenance, and repairs. We understand from respondents that network complexity is a hassle that they struggle to cope with, and that with digital transformation paths this complexity is only compounded.

We also think that this 74% penetration gives MSPs an ideal platform from which to expand into existing accounts with more services. SD-WAN implementations are a great vehicle for this, with central orchestration and more deeper management functions more effective for flexible real-time changes – including technical ones to network nuts and bolts and commercially with more pay-as-you-go and ‘as-a-service’ options. This opens up opportunities for service providers to move up the value chain in various areas, including for example professional services. In the same Multi-client Survey, the following graph demonstrates the types of partners that businesses use for.
The question posed was:

What company, or what types of company would you prefer to deliver assistance in migration?

The bulk of the partners used is a split more or less evenly between managed IT service providers (36%) and network service providers (30%).

Survey responses indicate that IT departments seek assistance with service and product selection, as well as migration planning. Typically there will also be relationships with integrators like Accenture and IBM for support, but network service providers received 30% positive response.

From this we conclude that SLAs, established processes, and hardware and software deployments are common themes which speak to workflow; and that enterprise IT departments need consulting partners for the transition from that current WAN environment to a new setup. And those partners must have the credentials to oversee configuration, feasibility, and monitoring, and network analytics.

Concrete Implementations Gaining in Momentum

Having set the scene for the value opportunity available to MSPs; we think that managed SD-WAN is a great opportunity for enterprises, too. There is a WAN-evolution imperative for driving a transformed customer experience. We’d like to share one example to prove this point. NTT Communications is providing an SD-WAN overlay solution to Australia-based clothing and fashion firm Blue Illusion. NTT Communications’ SD-WAN solution blends MPLS over DSL and 4G on the underlying network to support a range of new WAN features and functions spanning 100 sites.

The additional services that run over the fully-managed offering include: hosted voice and UC, and managed IaaS. Blue Illusion reports that the new network gives better redundancy, efficiency and easier bandwidth flexibility. The company can also scale locations up or down more quickly if it needs to rapidly deploy additional customer channels and pop-up stores. From the perspective of the IT team, Blue Illusion’s technicians no longer have to spend time and effort on managing WAN infrastructure; this is done by NTT Communications, thereby leaving Blue Illusion’s staff more available time to focus on the company’s core business IT transformation strategy.

A Brief Look to the Future

We anticipate as SD-WAN matures there will be greater network automation as network virtualization catches up with the rest of IT (e.g., spinning up network service becomes on par with cloud compute). The public Internet, ISPs, and cloud providers will no doubt have strong influence over this development, and service providers will have to respond accordingly with intent-based networking to fit networking parameters to applications in real time. The cloud app should tell the network (Internet WAN) what it needs and get adjusted bandwidth and QoS priorities in real-time. An example of the future scenario of app telling network what it needs is where IBM and NetFoundry showcased how IBM Watson customers can securely and reliably connect contact centers and enterprises to Watson cognitive services, using existing Internet connections.

This implies that the future role of MSPs will change, and there is more disruption underway as former ISPs that have built platforms on OpenStack launch their own SD-WAN capabilities. An example of this is the new SD-WAN offering launched this week by Italy Milan-based Enter. Through Enter’s OpenStack-based network automation capabilities and SD-WAN functions, the company has extended a commercial SD-WAN platform to partners that can leverage the open platform and APIs to easily integrate SD-WAN platforms with Enter’s infrastructure, extending on-demand services to Enter’s on-net locations.

To hear more about these themes, I will be presenting at FutureWAN’18 on January 26, 2018 at 7:45am – 8:45am PST. I will share more around GlobalData’s SD-WAN and customer experience findings, as well as examine in greater detail service provider examples of how managed SD-WANs are being deployed. Please note that this blog series and the upcoming Webinar solely represent GlobalData’s opinion and our own research findings, as well as announcements made publicly available.

See registration link below:

FutureWAN’18 – The SD-WAN Virtual Summit

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