The pace of scale of enterprise and service provider SD-WAN deployment accelerated sharply in 2017
2017 was a good year for software defined wide area networks (SD-WANs), as increasing numbers of end user organisations replaced branch office routers with lower cost and easier to manage virtualised solutions.
According to research company IHS Markit’s Data Center and Enterprise SDN Hardware and Software Biannual Market Tracker, global sales of software defined enterprise WAN hardware and software were worth around US$450m last year, but are forecast to net US$3.3bn by 2021. Elsewhere Gartner has predicted that 30% of companies will have adopted SD-WAN in branch offices by the end of 2019, up from just 1% in 2015.
Evidence which appears to confirm the pace and scale of that adoption is emerging, with a number of end user companies publicising their SD-WAN deployments last year. US safety restraint and seat maker US Indiana Mills and Manufacturing (IMMI) deployed Silver Peak’s SD-WAN technology at seven of its 12 sites globally for example, saving money by decommissioning expensive MPLS lines at each location. The IT department was also able to cut costs of employing expensive consultants because each SD-WAN appliance can be plugged in by non-skilled staff and the required applications downloaded from the cloud.
In the UK healthcare provider Nuffield Health was another Silver Peak customer, after its legacy multi-protocol label switching (MPLS) WAN started to meet problems connecting its 20,000 users to Office 365 and cloud-hosted medical records. The company installed SD-WAN appliances at 189 of its 260 sites in just four months, and though the deployment increased the company’s operational expenditure by around 20%, it was rewarded with a six fold increase in available bandwidth at each site.
Paris-based payment firm Ingenico is using a combination of Masergy’s managed SD-WAN services and Silver Peak’s SD-WAN platform to connect 90 of its global offices after adoption a cloud first strategy that looks to host all of its application and services off-site. Shirt maker Brooks Brothers too is rolling out SD-WAN at its US retail outlets using VeloCloud technology, with each site now paying around a third of the price for its WAN connectivity compared to the MPLS links they replaced. The company has not completely moved way from MPLS yet, but says it is moving in that direction as it upgrades more of its 278 shops and offices across the globe.
SD-WAN the low hanging fruit of VNFs
Network and communications service providers also ramped up their activity. Comcast Business introduced an SDN platform named ActiveCore in September. The company has pencilled in hosted SD-WAN services as its first business product to be enabled by that platform, based on technology from Versa Networks. Comcast will host the SD-WAN controller in its own cloud, rather than on the customer’s premise, though the client will have to deploy some form of universal, or “white label” CPE to access the service.
That is because like other service providers Comcast Business sees SD-WAN as just the first in a broader portfolio of virtualised network products services which it expects to deliver in future. SD-WAN is widely perceived as the “low hanging fruit” that will introduce network function virtualisation (NFV) to enterprise IT departments. Once they are familiar with the technology and the virtual network functions (VNFs) it enables, those service providers can apply the same approach to different applications and services
Another example comes from Australian telco Telstra, which is using VeloCloud’s software to deliver SD-WAN as a virtual network function (VNF) on Juniper Networks’ universal CPE (uCPE) hardware. Telstra has already gone one step further, having set up a VNF marketplace, with each virtual application integrated to Juniper uCPE via a programmable interface and open API.
Nor does every deployment have to rely on a single hardware/software supplier – partnerships can often deliver more innovative solutions. VeloCloud’s VNF can run on either VeloCloud hardware, Juniper hardware or any generic x86 hardware, whilst its own hardware will run other VNFs from the likes of Palo Alto Networks, Checkpoint and Fortinet.
Elsewhere UK telco BT extended its SD-WAN services with Agile Connect, based on technology from Nokia Nuage Networks. US local exchange carrier (CLEC) Zayo (which also provides network services in the UK) will begin offering SD-WAN to its US enterprise customers in the next few months, integrating the technology with application performance tools and secure IP-VPN services.
Some CSPs are also using SD-WAN as the underlying transport for broader cloud service provision, especially where the performance of those cloud-hosted applications depends on flexible, scalable on demand bandwidth being available to end users in remote places. US network service provider Windstream Communications for example used technology acquired through its US$228m purchase of Broadview Networks to deliver a platform optimised to deliver its unified communications as a service (UCaaS) proposition into branch offices.
The service aims to ensure the performance and of voice, video and critical business applications combined with greater visibility and control for customers, including the option to prioritize SD-WAN bandwidth for specific elements of the UCaaS proposition and quickly scale to incorporate additional sites and users when required. Versa Networks too has worked optimise voice and video within its SD-WAN platform to improve UC applications such as Skype, WebEx and Microsoft Teams.
A spate of high profile acquisitions in 2017 indicates that many hardware and software suppliers, as well as service providers, see a real opportunity to boost their enterprise revenue through relevant sales of infrastructure and managed services.
The scale of that activity led analyst firm 451 Research to predict a sharp increase in similar SD-WAN mergers and acquisitions in 2018, fuelled by growing enterprise demand and deployment and what many suppliers see as a bright future for companies able to lay a firm foundation for a new generation of virtual network services over the next five years.