SD-WAN and Hybrid VPN in the Art of Digital Network Transformation

Joel Stradling – Research Director, Business Network and IT Services

Summary Bullets:

  • GlobalData research reveals that an overwhelming majority – 85% of participants in a live web poll (see chart below) – view the evolution of their WAN as critical or very important to the overall digital transformation program.
  • Business outcome is the new discussion focus around WAN evolution between enterprises and their managed service provider suppliers.
  • Industry vertical segments have unique needs, and any network transformation can be built with those demands. This blog explores three verticals in greater depth: manufacturing, logistics, and services.

Current WAN implementations are falling short of business requirements. During a recent survey (Reference: GlobalData enterprise survey November 2017), research indicated that most businesses have a strong desire, indeed a near obsession, to move applications and workloads to the cloud. The virtualization of servers and other IT infrastructure are viewed with positive attitudes for achieving cost savings and agility. However the emergence of novel technologies, such as AI, IoT, 5G, and big data analytics, is placing more and more pressure on legacy WAN technologies. Thus various industry verticals highlighted the shortcoming of current WANs, and the steps being taken to evolve corporate IT and networking to the next level of agile infrastructure.

During the *Webinar SD-WAN & Hybrid WAN in the Art of Digital Network Transformation, July 17, 2018, we asked the audience the multiple choice question: “How would you describe the role of WAN connectivity to your digital transformation?” with the following four possible answers:

  1. Not important, we are mostly just focused on moving apps to the cloud
  2. Neutral – the WAN is necessary but not very essential on our digital transformation
  3. Important – our digital transformation program also depends on evolving the WAN and connectivity platform
  4. Critical – evolving the WAN to the next level of cost, performance, and agility is essential for driving our digital transformation

The below chart displays the results, with the largest portion at 52% citing the evolution of the WAN as critical to the business:

Chart 1: Poll Results for the Role of the WAN in Enterprise Digital Network Transformation

Vertical Specific Needs & Drivers:

The Logistics Industry

Logistics companies tend to have large numbers of very geographically distributed sites. A logistics firm is likely to be using or exploring M2M and IoT to track and monitor sites, fleets, and objects in transit. As with many other industries, margins can be very thin and therefore closely managing the IT spend and aligning it with revenue is a basic must for survival. SD-WAN is a strong contender for supplying real-time IoT applications with low-latency networking due to inherent attributes such as dynamic path selection for traffic, and traffic prioritization. Additional advantages specific to this industry include being able to leverage low-cost broadband access plus cheap Internet traffic on a hybrid VPN underlay to help keep connectivity costs down, compared with relatively expensive dedicated MPLS. Furthermore, rapid provisioning, underpinned by automation in the back-end can be a bonus for adding newly acquired sites in an expanding operation.

The Manufacturing Industry

Technological progress in manufacturing is moving at a rapid pace. The respondents in the survey in the automobile industry highlighted modern robotics, predictive maintenance, AI, and 5G, will all become key for the future connected cars segment. In the meantime, today’s competitive manufacturing company also needs to adhere to procurement cost control, harsh environment monitoring, supply-chain accuracy, and real-time billing applications for efficiencies with warehousing and supplier partners. SD-WAN and hybrid VPN solutions offer benefits such as improved applications performance management, more detailed visualization of the network through a centralized management console and automated provisioning.

The Services Industry

A unique feature of the services vertical is that of billable hours for consulting staff. This implies that unification of HR tools, as well as uniformity with ERP applications can give considerable advantages. Several of the services companies interviewed also mentioned rapid expansion of global operations via acquisitions. With this growth comes an urgent need to streamline and integrate sites and IT platforms according to strict policies and governance. Moreover, the speed of operations can be increased via digitally transformed operations. Once again SD-WAN and hybrid VPN solutions can deliver significant benefits, such as speed of adding new sites, and strong VPN policy adherence through a central software-defined management plane.



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