The New Age of Managed SD-WAN Services

Over the last two years, SD-WANs have been the hottest topic in networking. In that timeframe, SD-WAN solutions have evolved dramatically with many vendors recently implementing new, highly robust architectures and adding functionality such as routing and more sophisticated security. But, it is not just the technology that has changed. The way that SD-WANs are planned, owned and operated has also matured significantly. The goals of this blog include discussing the large interest that organizations have relative to consuming SD-WAN as a managed service; the evolution of what is meant by a managed SD-WAN service; and the evolution of how managed SD-WAN services are built and operated.

DIY vs. Managed Service

As organizations evaluate SD-WAN solutions, one of the choices they face is whether or not to implement an SD-WAN solution on a Do-it-Yourself (DIY) basis. If they elect this option, the customer is responsible for the planning, designing, implementing and managing of all components of the solution.

Adopting a DIY solution has many advantages. One advantage is that a DIY solution typically costs less than a managed service. Potentially more important than cost savings, organizations that adopt a DIY solution have total control over how the solution is implemented and how it evolves over time. Because they have this control, these organizations can respond quickly to changes in the environment.

There are, however, several factors that complicate the task of implementing a DIY solution. One factor is the extent of functionality that an SD-WAN solution encompasses. The impact of this factor is to simultaneously lengthen the amount of time and increase the amount of resources that it takes to evaluate and implement an SD-WAN on a DIY basis. Another factor is the in-house IT skill that it requires to adopt a DIY solution. The challenge here is two-fold. Does the organization have the skills that are necessary to manage the lifecycle of the solution and if so, does the organization believes that implementing an SD-WAN on a DIY basis is the most valuable use of those resources?

As described in the 2018 Guide to WAN Architecture and Design, just over half of all network organizations prefer a solution other than DIY. The most popular alternative to a DIY solution is a managed service. The providers of managed services are referred to as being Managed Service Providers (MSPs). MSPs typically acquire and implement the same SD-WAN functionality as an enterprise network organization would and MSPs leverage that functionality to provide their customers with a turnkey solution.

The Definition of a Managed SD-WAN Service

Confusion is one of the primary factors that limits the adoption of any new technology or way to adopt technology. The MEF is a global industry alliance comprised of more than 150 organizations that is working to reduce the confusion surrounding SD-WAN technologies and solutions. One of the ways that they are doing this is by creating standardized SD-WAN terminology, service components, reference architectures and an SD-WAN service definition. As part of their work the MEF has identified the following as being fundamental capabilities of SD-WAN managed services:

  1. Secure, IP-based virtual overlay network
  2. Transport-independence of underlay network
  3. Service assurance of each SD-WAN tunnel
  4. Application-driven packet forwarding
  5. High availability through multiple WAN links
  6. Policy-based packet forwarding
  7. Service automation via centralized management, control and orchestration

The MEF also identified some value-added services that are beyond the fundamental SD-WAN service offering. This includes WAN optimization and advanced security services.

The Evolution of Managed SD-WAN Services

Until recently the most common provider of a managed SD-WAN service has been Tier 1 Communications Service Providers (CSPs) such as AT&T. The primary reason for this is that unlike most organizations, many Tier 1 CSPs have the resources and the internal processes to evaluate and implement emerging technologies. However, recently several CSPs, many of which such as Masergy that are not Tier 1 players, have announced managed SD-WAN services. To better understand the dynamics of the managed SD-WAN services market I interviewed Ralph Santitoro. In his role as a MEF Distinguished Fellow, Ralph is a major contributor to the MEF-related work described above. In addition to contributing to MEF, Ralph works for Fujitsu Network Communications where his title is: Head of SDN/NFV/SD-WAN Services.

Ralph pointed out that Fujitsu is both an MSP and a Systems Integrator (SI). He explained that organizations like Fujitsu can serve as an MSP and offer managed SD-WAN services without owning any transmission facilities if the managed SD-WAN services are delivered over the top. He went on to say that many CSPs are in a bind. They realize that SD-WAN adoption is an inflection point in the industry and they know that they must enter that market in the near term or they will likely be excluded from it. However, there are numerous SD-WAN solutions – both complete solutions and partial solutions, and evaluating all or even most of the viable options can take time and resources that most CSPs simply don’t have.

As an SI, Fujitsu works with organizations such as governmental municipalities to enable them to offer SD-WAN services on a worldwide basis. Fujitsu provides these services to their customers on a build and operate basis as well as a build, operate and transfer basis. The company also enables CSPs which are facilities based to quickly offer differentiated SD-WAN services in-region and to extend their reach into geographic areas where they don’t own facilities by offering SD-WAN services that are delivered over the top. In many cases, the CSPs are charged on a pay-as-you-go, pay-as-you-grow model which drastically reduces the risk of offering such services. According to Ralph, Silver Peak is one of a handful of companies that provide all the SD-WAN service components and as a result, Fujitsu includes the Silver Peak solution as part of the managed SD-WAN services that it builds for its clients.

The Impact on the Market

Many organizations will find that the DIY approach to adopting an SD-WAN solution is the most appropriate approach for them. However, for a significant number of network organizations the evolution of the managed SD-WAN services market means that they now have a strong viable alternative to implementing SD-WANs on a DIY basis. For CSPs and others who want to offer managed SD-WAN services, the evolution of the market in general, and the products and services of companies such as Fujitsu and Silver Peak in particular, mean that they can get to market quickly with a differentiated service and with little risk.