2016 is expected to a big year for SD-WAN adoption.
That’s good news for enterprises, which are looking for more affordable and agile ways to address the growing amount of traffic traversing their wide area networks, seeking methods to more quickly and easy bring online new branch locations, and searching for solutions to securely support the traffic from those remote sites without having to bring it back to a centralized hub. SD-WAN technology is also now beginning to be adopted by communications service providers, which are leveraging it to offer new managed services for their business customers. Meanwhile, a growing array of vendors is jumping aboard the SD-WAN bandwagon, and the investment community is lining up to dole out new money to players in the SD-WAN space.
Various sources indicate the SD-WAN space will reach $3.2 billion by 2018, $12.1 billion by 2019, and $7.5 billion by 2020. And David Hughes (News - Alert), CEO of Silver Peak, believes SD-WAN will reach a tipping point this year, at which time this technology will go mainstream.
This new product category is seeing growing interest and uptake as businesses deploy more cloud-based applications, see more mobile and video traffic on their networks, and grow increasingly frustrated with the cost and inflexibility of existing MPLS technology, on which most WANs today are based.
“SD-WAN dramatically simplifies the delivery of high performance cloud, unified communications, and data center applications to remote offices using any combination of MPLS, Internet, or LTE,” says Kumar Ramachandran, founder and CEO of CloudGenix. “For customers looking to adopt applications using WebRTC, Microsoft Skype (News - Alert) for business, [and] Cisco UCaaS solutions, CloudGenix SD-WAN delivers real-time performance and codec-level visibility, while reducing the WAN infrastructure costs by 50 percent.”
SimpleWAN CEO Erik Knight says that “the idea behind SD-WAN is to be unloyal,” explaining that this new technology enables businesses to leverage whatever connectivity type or service provider is under the hood, by aggregating and offering intelligence around whatever broadband is the best and most affordable choice at a given time.
Not only is SD-WAN, which takes software-defined networking concepts and expands them to wide area networks, more cost effective than MPLS, it also offers more capacity than other connectivity options, says Mike Wood, vice president of marketing at VeloCloud. With SD-WANs, he explains, you can begin to provide prioritization over the Internet. With VPNs the connection is nailed up, and there is no connectivity to the Internet. The VeloCloud SD-WAN solution, he adds, also enables users to repair problems like packet loss across the link; VPNs don’t do that.
Talari CMO Kevin Gavin adds that his company’s SD-WAN appliances can be placed at each of a customer’s locations it wants to connect to leverage MPLS and various flavors broadband, but with more bandwidth and reliability than would otherwise be possible. The Talari solution tags every packet so on the receive side you know about the latency, packet loss, and jitter of each path through the WAN, and you have a real-time view of all the links and their current quality so you can steer around congestion.
Security & Use Cases
Companies that are readying to launch new applications that involve real-time communications like voice and video – both of which benefit greatly from quality of service and may require more bandwidth than the company WAN currently supports – may want to consider SD-WAN, Gavin says. A human resources application that involves video for training purposes would be a perfect example of where the application of SD-WAN might make sense, he explains. SD-WAN is also a good match for business functions like call centers for which reliability is of the utmost importance, says Gavin. If the WAN goes down, he notes, that means your call center is unavailable, and your cash registers stop ringing, resulting in lost revenue for every moment it is unavailable.
Office 365 is the No. 1 solution that businesses are calling on Cisco to support with its Intelligent WAN solution, says Kiran Ghodgaonkar, Cisco’s senior manager for product and solutions marketing, who explains this is the Cisco SD-WAN offering. Businesses want to send Internet-based traffic directly to the Internet from branch offices, he says, but what’s holding them back is security –they are worried about connecting the branch directly to the Internet without backhauling it. SD-WAN, he explains, addresses this issue.
SimpleWAN’s Knight says cybersecurity is a big part of his company’s strategy. Businesses that leverage SD-WAN to see and control their networks in real time, he says, get a better handle on what’s happening at each of their sites and can see and act on attacks as they happen.
Knight adds that his company’s core customers are multilocation businesses looking for more bandwidth than services like Ethernet over copper can deliver, and more affordability than MPLS can offer.
In terms of specific verticals interested in SD-WAN, Hughes of Silver Peak says multisite retailers seem especially open to it, especially for new locations that are not already connected. VeloCloud agrees; in fact, Wood says it has won the largest SD-WAN deal in the world – with a Fortune 500 retailer, which will be using the VeloCloud solution to serve an initial 2,500 sites.
The CSP Play
As more businesses become interested in SD-WAN, so too do communications services providers, which want to provide these organizations with managed services based on the new technology.
For example, Verizon in September became the first service provider to offer SD-WAN services based on Cisco’s IWAN solution. SD-WAN won’t replace Verizon’s MPLS business, but it will help some of the carrier’s customers to move to lower cost solutions, says Cisco’s Ghodgaonkar, who expects significant adoption of SD-WAN by service providers. In another example of service provider adoption of SD-WAN, Interoute in Europe already offers a service based on technology from Silver Peak. And MetTel (News - Alert) has integrated the VeloCloud SD-WAN with its core MPLS offering.
“We think MetTel is a pretty big name,” says Wood, adding VeloCloud is working with five of the top 12 service providers. “You’ll see bigger names in that space coming out.”
Service providers are also starting to look at vCPE as a service, Ghodgaonkar says, so network functions virtualization will be one of the next important developments on the SD-WAN front. Indeed, service provider Colt is already working with vendor Versa Networks on this front.
“We’ve paved the way for virtual CPE and hybrid network services, and have partnered with Versa Networks to develop a set of agile virtualized network functions that will augment our managed service offering,” says Mirko Voltolini, vice president of technology and architecture of Colt. “Versa’s NFV solution comes with significant flexibility and has enabled Colt to deliver new services to the market faster."
Investment in SD-WAN
Given the growing interest and adoption of SD-WAN technology, it comes as no surprise that the number of vendors moving into this space continues to grow, as does investment in this arena.
“Obviously it’s a hot space, so almost anyone that has anything to do with the WAN is slapping on the SD-WAN label,” says Hughes.
Indeed. Among the companies hawking solutions under the SD-WAN flag are Cisco, Citrix (News - Alert), CloudGenix, FatPipe Networks, Glue Networks, Ipanema technologies, Nuage Networks, Ocedo, Riverbed, Silver Peak, Talari, VeloCloud, Versa Networks, and Viptela. Ghodgaonkar of Cisco says the SD-WAN space is comprised of traditional router vendors like Cisco and others that are building solutions on top of hardware platforms with more centralized automation and management; companies like Riverbed and Silver Peak, which he says are starting to reposition themselves as SD-WAN players by adding routing functionality to their existing solutions; and startups offering thinner clients for branch offices that can deployed alone or in front of existing routers to allow for an expedited move to hybrid WAN.
In terms of new money in this space, VeloCloud in late November was in the midst of its C series funding round. The company, which is the recent recipient of a 2015 Unified Communications Excellence Award, delivers its solution primarily via the channel. And Versa Networks – a startup is backed by Sequoia Capital, Mayfield, and Verizon Ventures, and led by brothers and Juniper Networks (News - Alert) veterans Kumar and Apurva Mehta – in early November revealed it had raised $43 million in funding.
Several sources at these companies also indicate that analytics will play a key role in SD-WAN going forward. This technology offers network operators more visibility into what’s happening in their networks, and analytics can leverage that information to either influence user behavior or set the most appropriate application or security policies.
Edited by Stefania Viscusi