What Will Drive SD-WAN Adoption?

The SD-WAN market is maturing rapidly as more enterprises trust it to drive their hybrid networks. The Open Networking User Group (ONUG), in a recent post on its blog, called 2016 the year the ONUG community “took front row seats to the emergence of a software-defined Infrastructure ecosystem and its cloudification. In this new software-defined world, the wide area or (SD-WAN) came into focus.”

There’s no question the market is evolving and growing. However, I wonder what the primary driver is: cost or performance? Will enterprises implement SD-WAN primarily to reduce WAN and operational costs, or will their investment in SD-WAN focus on driving business value?

The Velocity Gap

CIOs and Application teams are increasingly focused on Digital Transformation projects that drive new business models and profits. Their rate of change is rapidly increasing, and with it the ‘Velocity Gap’ grows between application teams and network teams. As an advisor to large enterprises, I’m witnessing this on a very regular basis.

Network teams have the opportunity to model their DevOps peers and leverage SD-WAN as a foundational activity to drive cultural change, continuous improvement and agility to rapidly adapt to business needs. Plus, IT leaders can use it as an activity to develop a more generative culture between network and application teams.

Drivers of SD-WAN

The rise of SD-WAN is due largely to three factors putting pressure on limited WAN infrastructure and operations.

The first is aggressive adoption of cloud resources and SaaS (News - Alert). Since these resources are typically hosted on the Internet, it no longer makes sense for most organizations to backhaul access over expensive MPLS circuits and then out the Internet. While this legacy approach centralizes security, it increases MPLS costs and lowers employee productivity due higher latency. Providing local direct-to-net, or Internet breakout, is a much lower cost WAN option and the lower-latency path to cloud and SaaS resources increases employee productivity, as well as business velocity.

The second is video is being broadly adopted, and can easily consume a large portion of an expensive MPLS link. It is important to realize this is for both recreation and business purposes.  Skype (News - Alert) for Business and WebEx are great examples of collaboration uses cases which are valuable for the business. However, recreational videos are just as likely to be taking up their fair share. Intelligently identifying and directing these applications to the most cost-effective and performant path using business-intent policies is a valuable use case for SD-WAN.

The third, and most important, is businesses want higher velocity and performance. This is where SD-WAN’s operational efficiencies, intelligent performance and extensibility have the biggest impact for the business when compared to traditional routing.

Clearly, it’s time to rethink how enterprises leverage and operate their WAN. But why stop there?  Beyond the WAN is the branch office – the edge of IT. Similar, IT and business constraints await to be disrupted there too. 

Will IT leaders tactically approach SD-WAN as a single, isolated IT project - like they have for years with router refreshes? Or will they use SD-WAN as a pivotal project, focused on enabling significantly higher business velocity and value? 

Building a High-Velocity Edge

We’re entering a fiercely competitive time where the speed of digital operations is critical to business growth. The Business Process Institute’s Transform to Better Perform research found the gap between leaders and laggers is growing. For business to be competitive in the digital world, IT leadership must be committed, collaborative, think strategic and execute effectively. In relation to edge locations where the business operates, IT leadership must consider integrated investments and processes designed to unleash disruptive IT agility, cost efficiencies and business velocity – not simply reduce costs.

Let’s discuss a few SD-WAN integration points that enable business velocity.

SD-LAN: Enterprises who value the concept of SD-WAN should consider an integrated SD-LAN project which includes switching and Wi-Fi. This builds upon the same business-intent policies of SD-WAN, but extends the operational value to the edge network, users and devices. Managing 500 SD-WAN gateways with a simple policy set provides nice operational savings, but imagine how much more efficient staff will be if they managed an additional 1,000 remote switches and 2,500 Wi-Fi access points with the exact same policies. This means the ability to manage and monitor 4,000 devices with a slightly higher level of effort as 500 devices.

WAN Acceleration: Next focus on speed of digital operations and business transaction throughput, otherwise known as business velocity. This is where an integrated WAN acceleration strategy will separate the cost-focused network teams from the performance focused network teams. Making centrally-hosted business applications run 30-3000% faster translates to faster business operations and huge competitive advantages. Imagine the competitive edge an engineering firm that can design or change products 10-25% faster has; or a call center whose staff can service clients 20% faster; or retailers whose digital in-store experience is immersive, flawless and fast.

Hyper-convergence: Not all remote sites are created equal. Some are lean, with just networking equipment and users. However, others have more robust operations which require applications, servers and storage. This is where newer hyper-converged solutions designed to overcome the unique challenges of edge locations provide extreme value to IT and the business. They allow organizations to consolidate storage, server and application operations, but when needed project and operate them at the edge with extreme efficiency and availability. This translates into lower hardware costs, lower risk, more efficient IT operations and higher business velocity.

It isn’t ‘or’, but ‘and’

In the inaugural Market Guide for Software-Defined WAN report, Gartner (News - Alert) predicts that “by 2019, 30 percent of enterprises will have deployed SD-WAN technology in their branches, an increase from the less than one percent it is today.”  

Gartner analyst Andrew Lerner sums up the increasing adoption of SD-WAN in a recent blog post introducing the report:

“So that is a pretty dramatic uptick (I’m no math major but that’s at least 30X). The rationale behind this is that the benefits are just so darn compelling, and the insertion point of a single branch (for piloting) is quite doable.”

SD-WAN is extremely compelling, however the real challenge ahead for IT leaders is do they approach SD-WAN tactically, or do they strategically commit to it as a foundational first step to transform business velocity at the edge. If the latter, I expect Gartner’s prediction will end up on the low end of the adoption rate scale.