What SD-WAN can do for digital transformation and business strategies

Since the advent of the Internet, many different network management techniques have been developed to make optimal use of the available bandwidth and for the efficient handling of data traffic. To date, truly dynamic approaches have been found to be lacking. The latest generation of software-based wide area networking technology, SD-WAN, is now revolutionizing the business. SD-WAN is the ideal solution to meet the need for digital transformation, the enormous growth of application traffic in the cloud and the demand for identical network performance across all branches of a company.

SD-WAN has been used by early adopters for a number of years. Nowadays, this technology is being used more and more, and it seems that SDWAN will become a mainstream solution in the not too distant future. In a recent study by Frost & Sullivan, 61% of the companies surveyed said they would like to replace their routers with SD-WAN solutions with router functionality within one to two years. IDC estimates the annual growth of the SD-WAN market at 40%. And although SD-WAN is still in a development phase, the technology has evolved enough to adapt to new market expectations.

More than just cost reduction

The explosive growth of SD-WAN is partly due to the fact that it is possible to use different types of access on one site, in order to achieve higher uptimes and to offer more available bandwidth for less money than with older network services such as MPLS. In addition, SD-WAN has a fast payback time through cost savings in the form of reduced network outages, optimized network access costs and resource savings through managed services. In addition to cost savings, the deployment of SD-WAN technology also benefits applications that are sensitive to speed, latency and responsiveness.

SD-WAN is revolutionary in that it is able to identify the nature of data streams, prioritize them, and deliver the same level of performance to every location in the enterprise – all orchestrated from a single, unique management interface. SD-WAN makes it easier for IT departments to make choices between decentralization or globalization of the organization and the desire to centrally manage and monitor data traffic.

Old WANs had the advantage that they could be easily managed and orchestrated. While SD-WAN offers flexibility, efficiency and improved performance, it is more complex to manage, which requires new skills from the teams responsible for operating the network. For example, securing data streams and direct access to cloud services from remote sites requires changes in network architecture, mesh and route selection. The choice of SDWAN must, of course, also take into account security, which must be integrated into deployments, cloud access, container services, virtualizations, and so on.

With the advent of the virtual network, its management has become increasingly difficult. IT teams need to look not only at equipment and connections but also at the applications and network topologies in different layers. This is where global network operators have an advantage over non-operator competitors; they can easily provide end-to-end monitoring from their own portal.

Approaches

This change is forcing IT teams to rely on outsourcing SD-WAN services, rather than keeping them under their own control. According to Frost & Sullivan, 80% of companies opt for managed SD-WAN services, while 20% do so themselves.

There are several service providers that offer SD-WAN services. They each have a different approach to the same problem. Roughly speaking, four approaches can be distinguished for SD-WAN services:

  • Pure Players: the SD-WAN solution and the cloud-based management infrastructure are provided by the SD-WAN provider; the network sourcing and other service requirements are the responsibility of the client.
  • Network operators: the network service provider provides the SD-WAN service as a complete package, the management, the network infrastructure and any additional services.
  • Integrators: these are service providers that implement Pure Players’ solutions, usually in combination with network and security services that they purchase from network operators.
  • In-House solutions: an IT team of a company takes care of all the components itself, including the roll-out of SD-WAN, network sourcing and the implementation of the security.

Each of these four approaches meets different organisational needs, depending on the level of expertise of the IT team.

The Gartner Magic Quadrant for WAN Edge Infrastructure of October 2018 lists twenty SD-WAN suppliers. At least as many other types of organizations that offer SD-WAN can be added to this list, in combination with other services, such as Unified Communications-as-a-Service. Looking at the emergence of new types of IT outsourcing and security companies, the SD-WAN market is currently highly fragmented.

To be able to choose the best service, a decision-maker must consider the requirements for cloud connectivity, path performance, geographic reach, and the experience of the service provider. Does the SDWAN solution have direct connections to the cloud applications the company uses? How is data traffic handled? Does the reach of the provider match the spread of the company? Does the service provider have experience in managing complex hybrid networks?

Evolution of the strategy

From a macro perspective, SD-WAN has good opportunities to become a strategic enabler for companies.

First, as a result of the digital transformation, CIOs are now part of the main decision-making hierarchy of organizations. According to Deloitte, 46% of large companies’ CIOs report directly to their CEOs.

Second, with the explosion of mobile tools and applications, businesses need to ensure that all employees have access to their applications anytime, anywhere, and can work together in real-time and seamlessly. SD-WAN offers a flexible solution for this. Thanks to the centralized orchestration of the SD-WAN performance at all locations, it is possible to adjust the level of connectivity performance according to the workload and to merge the different types of access (fiber, copper, wifi, 4G and more) per site.

This new technology, therefore, affects not only IT itself, but also the business strategy at boardroom level. For example, SD-WAN enables a new organisational structure and/or geographical distribution of the team, resulting in real estate savings. But SD-WAN can also simplify mergers and acquisitions, facilitate faster roll-out of new offices and branches, provide more reliable broadband Internet access in stores to enable a more digital and intense shopping experience, and so on.

While corporate networks are a complex ecosystem made up of disparate connections (Internet, Ethernet, etc.), operators have the necessary knowledge to support companies in their digital transformation with SD-WAN solutions. Expertise in peripheral applications such as 5G and IoT also gives them technical and competitive advantages.

Looking ahead

The emerging virtual network technology that SD-WAN stands for promises more major changes. Manufacturers of router equipment once came up with their own solutions, but the telecommunications industry – in the hunt for more intricate networks, lower costs and greater capacity – has evolved over time towards equipment interoperability.

So far, SD-WAN has been very successful as it has been supplied with vendor-owned hardware. The next step is to break the link between hardware and software and offer SD-WAN as Universal Customer Premises Equipment. As these solutions are more widely implemented and improved, companies will benefit from higher value and additional cost savings, thanks to increased flexibility to add WAN optimization, firewalls and routing capabilities to a single hardware device.

We are only just on the eve of the SD-WAN revolution. It is the driving force behind the network transformation that supports the cloud IT model of the company of the future.

This is a submission from Todd Kiehn, VP Product Management at GTT. Through this link, you can find more information about the possibilities of the company.