SD-WAN is Maturing – Should Enterprises Change Their Expectations?

Summary Bullets:

• Customers should approach SD-WAN with an open mind when it comes to costs and understand that savings may come from knock-on benefits.

Gary Barton – Analyst, Business Network and IT Services

• Customers should conduct their own trials into whether the internet is appropriate for a given application.

Cost Savings vs. Quality

Much of the initial hype about SD-WAN focused on cost saving. However, those looking to buy an SD-WAN solution should keep an open mind to cost and be aware that if savings are realized they may not come from the cost of their WAN solution. Indeed, initial experience suggests that SD-WAN solutions sometimes increase the cost of an enterprise’s overall spend on WAN. The complexity of managing SD-WAN means that it is not an inherently cheap technology. WAN savings may come over time as more and more MPLS is phased out of WAN architectures, but initial experience suggests that abandoning MPLS from day one is a risky approach and often results in unsatisfactory network performance.

SDN and the Future of Networking

Joel Stradling – Research Director, Business Network and IT Services

Summary Bullets:

• Demands of innovative collaborative communications and cloud-native applications are placing tremendous pressure on legacy WANs.

• As companies virtualize more and more IT functions and migrate apps to private and public clouds, the resulting network looks very different to legacy static and hub-and-spoke network configurations.

• Corporate networks need to evolve to support greater automation, more self-serve, and better operational simplicity and agility.

• New SD-WAN services are the key to effective control and management of network traffic within disruptive technology domains; such as cloud-native migration, 5G, IoT, big data analytics, augmented reality, and machine learning.

• The new era is identified by networks being applications-led; as opposed to being connectivity-led.

Introduction

A panel of industry thought leaders gathered at the Vodafone Global HQ in Newbury on October 3, 2018 to address the following questions:

• What does the future of networking look like?

• How will how SD-WANs will make an impact on corporate networks?

• What are the opportunities and challenges in the industry for SD-WAN technology?

The following blog summarizes the main insights and discussion highlights that emerged during the panel debate.

Old Making Way for the New

The majority of existing corporate WANs in use throughout the business world are based on IP/MPLS technologies. In the past several years there has been a strong desire on the part of enterprise buyers of IT and network systems to also leverage Internet VPN, in parallel with private IP VPN services, to take advantage of a far lower cost-base for non-critical corporate data traffic.

SD-WAN Won’t Become a Feature of Branch Routing

M. Fratto

Summary Bullets:

• SD-WAN products and technology offer distinctly different features and benefits compared to branch routers. SD-WAN won’t augment routers but will replace them in the branch.
• Vendors making branch devices like routers and firewalls should be very concerned about being replaced with SD-WAN hardware and software.

I make no secret that I think SD-WAN is the cat’s meow. It really is transformative technology that, in most cases, can deliver on the promise of an as robust or better WAN overlay that obviates the need for a complex routed WAN architecture and the skills need to maintain it. If an enterprise wants to relegate its WAN to just pipes, it can overlay an SD-WAN on top of the WAN and manage it themselves. If the enterprise wants an SD-WAN and WAN service that has management integration from service provisioning to management, it can get a combined service—or soon will be able to get a combined service—from any number of managed service providers. In either case, gone is the complex routed WAN which is brittle and takes a long time to respond to problems. Whether the enterprise router jockeys will want to give up their beautifully crafted BGP is another matter, but the potential exists for most companies.

Enterprises Want Streamlined Operations. Who’s Going to Provide It?

 

M. Fratto

• Underlying SD-WAN and virtual network functions address enterprise IT’s desire for more efficient operations.

• Managed service providers can differentiate themselves on operations and should invest in doing so.

I’ve heard some commentary that SD-WAN will become a feature of routers and firewalls, and the product segment will wither and die, but I don’t think SD-WAN products are going to disappear. Some vendors will consolidate features and functions. Cisco and VMware will integrate their SD-WAN acquisitions with their other networking products but that doesn’t mean enterprises will run to consolidated products. There will be some uptake of consolidated products, just like there was some uptake of router-firewall-VPN combinations, but enterprise demand for stand-alone SD-WAN products will continue for some time. There are a few reasons for this.

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 Transformation, January 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.

SD-WAN Competition Between Resellers and MSPs Will Heat Up

M. Fratto

Summary Bullets:

• New products, technologies, workflows and architectures used by ISPs as well as IT’s growing acceptance of managed services are laying the groundwork for expansion of SD-WAN managed services.
• Competition in the SD-WAN segment will increase as existing MSPs and resellers with MSP offerings enter the market.

SD-WAN is disrupting more than WAN services. It’s also the catalyst for the launch of a new round of managed services, which will have a significant impact on the SD-WAN competitive landscape. The clearly defined choice of how enterprises acquire products – via the channel versus managed services providers – is collapsing as MSPs launch new services based on the very same products being sold through the channel. It’s the rare case where a trend that’s great for buyers because of the flexibility it offers is also great for equipment vendors as they can sell more products, but there is a chance for hidden conflicts in the sales cycle.

The Competitive Impact of Cisco’s Acquisition of Viptela Is Yet to Come

M. Fratto

Summary Bullets:

• Cisco intends to acquire Viptela for $610 million (USD), but it’s one more SD-WAN product in a sea of products.
• The competitive impact will take a year or more to be realized, and will largely be determined based on Cisco’s integration strategy.

Cisco Systems intends to acquire Viptela for $610 million. That’s a pretty good chunk of change for a company that already has two SD-WAN products, IWAN on the ISR routers and Meraki’s SD-WAN. Until the deal closes, Cisco and Viptela will be pretty quiet about future plans, but since Viptela will be added to Cisco’s Enterprise Networking Group, it is safe to say it will augment Cisco’s networking portfolio and at least, for a while, be offered alongside IWAN.

SDN Offers Hidden Benefits That Enterprises Shouldn’t Overlook

Gary Barton – Analyst, Business Network and IT Services

Summary Bullets:

• Core network enhancements can benefit enterprises from a network performance and service cost point of view.

• Flexible bandwidth services and pricing models are maturing and are worth a second look.

In 2015 and early 2016, SDN was the buzzword du jour of the telecoms industry, but the attention has now shifted to SD-WAN. Perhaps this is inevitable since SD-WAN is the newer technology and is at the forefront of several recent or upcoming service launches from providers such as Telstra, Orange Business Services, and BT, amongst others. SD-WAN also seems to offer more tangible benefits to the average enterprise customer, particularly those with a large number of smaller sites, or those seeking to adopt virtualised network functions such as firewalls and session boarder controllers.

Intentionally Making the Most of SD-WAN

M. Fratto

Summary Bullets:

• Successfully deploying SD-WAN means moving from rigid, static policies to dynamic enforcement of your intentions.
• Static rules should be a thing of the past and alternative equivalent controls should be evaluated for any lingering static requirements.

Few technologies make me sit up and say, “I want that!” when I see them, and SD-WAN is a game changing technology for organizations that have more than a handful of remote offices and want a better, more efficient way of interconnecting branches and a better, more efficient way to manage them. Regardless of the product you choose, and I discuss them in “SD-WAN H1 2016 Market Update: Vendor Snapshots Show a Crowded, Competitive Field Attempting to Diversify,” the benefits of SD-WAN will seem remarkable, fantastical even, until you see it in action. Implementing the routing, firewall, VPN, link load balancing, application performance, failover, failback, and cost management with traditional branch office equipment is very complex and even more complex to change, including adding new sites.

One Box to Rule the Branch, Yet Again?

M. Fratto

Summary Bullets:

• As companies refresh branch IT products, it’s a good time to evaluate new architectures for a better fit.
• Network function virtualization (NFV) was born in the service provider space, but the basic concept has legs in the enterprise.

Every five years or so, vendors old and new refocus product development on the branch in an effort both to add capabilities in remote offices and to reduce management overhead as well as the number of trips IT has to make to locations for moves, adds, and changes. There’s always been tension between adding even more appliances to a branch office and consolidating down to fewer multi-function appliances. Having multiple single-function appliances improves performance and increases versatility because functions can be swapped out by replacing hardware, but at the expense of increased management overhead and cost; while utilizing consolidated, multi-function devices promises lower costs, consolidated management and simpler networks at the cost of less versatility in swapping out functional components and the possibility of a failure having a greater impact.