Jan 17, 2017
There is no company too small or large to take advantage of Software-Defined WAN (SD-WAN). The only requirement is the obvious one that the business be multi-site in nature and is running a WAN that connects the locations together. However, not all WANs are created equal.
For organizations with small to medium WANs, with tens of locations, deploying an SD-WAN can certainly be challenging but is something that can generally be accomplished with the current network operations team. However, for large, highly distributed organizations, the complexity of procuring and managing the number of broadband providers required to deploy a large-scale SD-WAN can be extremely high. The value proposition is a slam-dunk. Take a retail organization with 500 locations: the cost of MPLS is in the range of $300 per megabit per month, whereas broadband is in the range of $1-2 per megabit per month. This means businesses will potentially save hundreds per month per location for multi-gigabit links. Conservatively, at an average of $300 per connection per month that’s savings of $150,000 per year. With this kind of savings, it’s no wonder why SD-WANs are so popular.
Broadband is certainly cost effective when compared to MPLS. But most of the large, MPLS operators have a nationwide footprint, where broadband operators tend to be regional. Also, when making the switch from a traditional network to broadband, businesses will choose two or even three broadband links. The multi-path capabilities of SD-WAN can make the multiple connections look like a single, larger pipe with performance equivalent to or better than MPLS. For organizations with just a handful of regional locations, managing a relationship with a couple of DSL providers and cable companies is manageable. However, for a business with thousands of sites, this complexity can drive operational costs up, obviating some of the benefits of an SD-WAN.
The provider stats below are from broadbandnow.com and show how many choices businesses have in the US alone:
• 891 DSL
• 470 Cable
• 911 Fiber optic
• 1339 Fixed wireless
• 66 Mobile broadband
Now toss in T1 or MPLS for hybrid WANs and Satellite for those extremely hard-to-reach places and its easy to see how a business with thousands of locations may find shifting to a broadband based SD-WAN difficult.
Fear not though, there is help out there for large, distributed organizations. The past couple of years have seen a significant rise in the number of managed SD-WAN providers, including the large incumbent providers that have finally gotten religion around this shift. SD-WAN could be viewed as cannibalistic to a company like Verizon or AT&T but both now offer that service. I’ve been critical of the large telcos in the past, as I’ve felt they have been slow to embrace transformative technologies, which holds their customers back. With SD-WAN they certainly weren’t first but they’re not late to the game either.
Any technology shift that is good for a customer is going to happen with our without the incumbents so they might as well jump on board and help customers through the transition. SD-WANs give a managed service provider the opportunity to provide a higher level of value than just basic transport as it requires an application audit, site review and a number of other factors before decided what kind of network services should be used in which location.
If you’re reading this and you run the network for a company with 500 or more locations and want to move to SD-WAN but are worried about the complexity of finding and maintaining a relationship with 10, 20, 30 or more broadband providers should consider a managed service provider. This will let you enjoy all the financial benefits of the technology shift without the associated risks.
Zeus Kerravala is the founder and principal analyst with ZK Research. He provides a mix of tactical advice to help his clients in the current business climate and with long term strategic advice. Kerravala provides research and advice to the following constituents: End user IT and network managers, vendors of IT hardware, software and services and the financial community looking to invest in the companies that he covers.