CSPs Are Flocking to SD-WAN

Cover Story

CSPs Are Flocking to SD-WAN

By Paula Bernier, Executive Editor, TMC  |  January 18, 2017

SD-WAN is an opportunity not just for suppliers but also for communications service providers, many of which now offer this software-defined wide area network service along with their existing connectivity services. While this can be a nice new revenue stream for them, it also could work to cannibalize their existing MPLS services – a point some CSPs are clearly trying to downplay.

“SD-WAN is coming, and providers know that it is, and there’s large demand from the enterprise,” says Mark Weiner (News - Alert), CMO at Versa Networks.

MPLS is not going away, but it will see flat to low compound annual growth rates, he says. Meanwhile, the growth will be in broadband and next-generation wireless. So, he says, SD-WAN is way for service providers to bring added value, and they can layer in security in the process.

Service providers apparently see it that way as well, as a long list of them – including AT&T, BT, CenturyLink, Colt, Global Capacity, Masergy, Singtel, Sprint, Verizon (News - Alert), and Vonage – already have rolled out SD-WAN services.

“We can’t keep up with the number of RFPs and RFIs coming in from service providers because they’re the ones who are providing connectivity,” says John Vincenzo, senior vice president and CMO at Silver Peak (News - Alert). “A lot of companies are recognizing SD-WAN is going to happen, there are POs, so if [they] don’t have an offering, someone else will.”

Indeed. Lloyd Noronha, director of global marketing at Viptela, says his company and Verizon were recently able to win a few big enterprise deals, including one with a 3,000-site bank.

Communications services providers have a chance to “completely crush it” in the SD-WAN market if they take the right approach, adds Mike Wood, vice president of marketing at VeloCloud.

One approach involves an over-the-top model in which the CSP puts SD-WAN at all of a customer's branches and at the data center, he says. Another is what Wood describes as a network integration model. That involves installing a multitenant gateway and integrating it at points of presence where MPLS is, so traffic coming in from both MPLS and broadband internet connections can jump on an MPLS backbone and provide access to on-premises applications and private data centers. Because the broadband link goes to the closest point of presence to the branch office, Wood says, it brings that connection onto the carrier’s MPLS network as soon as possible for better performance.

DT is using the VeloCloud solution to support its Internet of Things deployments. SD-WAN is a good match for IoT, Wood explains, because applications like connected car are time sensitive, so require very low jitter and low packet loss. SD-WAN provides the affordability and quality of service to control jitter and packet to negligible levels, Wood says.

AT&T also is using the VeloCloud solution for both of the models Wood describes above, and is employing VeloCloud for multitenancy back to its network. The companies announced their collaboration in October, and AT&T talked about turning up service in 2017.

Meanwhile, BT recently tapped Nuage Networks from Nokia (News - Alert) to support its BT Connect Intelligence IWAN managed service. The initial launch of this Nuage-powered SD-WAN solution is also planned for early 2017.

CenturyLink and Colt are leveraging SD-WAN technology from Versa Networks to deliver managed services.

 “Putting it simply, the customer wants secure, guaranteed delivery with quality of service for their data network,” says Peter Coppens, director of network portfolio at Colt, whose offering is delivered as a network functions virtualization service. “But they don’t want increasing data capacity requirements to mean more expensive bandwidth circuits. The solution is to use the public internet for those apps which are not latency critical like email or web surfing, while reserving your data networks for the mission critical, high-bandwidth applications. Data over the internet is still secured by using IPSec tunnels; and the customer is free to use their existing internet service provider if they so wish.”

Like Wood, Weiner talks about the importance of multitenancy in SD-WAN solutions for service providers. That enables service providers to cater to thousands or tens of thousands of customers, explains Weiner.

Versa Networks has multitenancy even at the branch devices, so if there are 20 tenants in a branch, it can support that, says Weiner. Some competing solutions require 1:1 branch to headquarters equipment support, he says.

“Hybrid networking and virtualized managed services, including new SD-WAN services, give businesses many new managed service options to create agile networks,” notes Ovum (News - Alert) analyst Mike Sapien. “Businesses should seek service providers that deliver an integrate, comprehensive suite of hybrid network solutions to achieve optimal price/performance.”

Edited by Stefania Viscusi


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