Three steps to take before deploying SD-WAN

As enterprises develop their network strategies and technology roadmaps, one of the hot technologies is SD-WAN, a major network transformation solution and a significant shift from the MPLS status quo deployed by most enterprises.

While we are bullish on SD-WAN, we recommend that any enterprise considering adopting it take some initial steps to minimize the disruption and costs associated with transitioning from a traditional network.

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Evaluate your current network

First, determine what your current network looks like and how it is used. Complete an application assessment and perform an endpoint analysis to determine if you have a large number of small branches, large offices, or a combination.

Hosted or In-House Service?

Second, consider what type of SD-WAN solution makes sense for your business. Do you want a managed service or a DIY unmanaged solution? Consider your geographic location. This will affect which, and how many, “last mile” bandwidth providers you need to use to implement the solution.

View current WAN contracts

Third, it is important to determine your obligations to your existing network service provider before committing to an SD-WAN business case. If you do not fully assess the impact of your commitments and potential liabilities to your current provider, you may encounter problems or costs (e.g., early termination or shortfall fees with your existing provider) and plan to transition to SD-WAN.

It's not uncommon for enterprises to rush to migrate to SD-WAN based on overly optimistic cost-saving models based on replacing most MPLS circuits with cheaper internet circuits. In many cases, they fail to realize that they can't just remove MPLS circuits with their current provider without incurring huge early termination fees.

It’s not enough to simply compare the cost of monthly MPLS to the monthly cost of Internet access; you also need to understand the contract you have with your current MPLS service provider and determine if you have a separate term commitment for your existing circuits. These separate term commitments can be 12, 24 or even 36 months and require the customer to pay a termination fee of up to 100% of the monthly recurring charges for early withdrawal. In some cases, depending on how much leverage you had when negotiating the contract, your commitment may be more because you must repay the waived installation fees and other charges. This can quickly become expensive and destroy your overly optimistic cost savings model.

Your old contract may also contain overall annual or term revenue commitments for all services, which you will still need to meet if your SD-WAN migration reduces your spending, forcing you to purchase additional services from that vendor to make up the difference or pay for the shortfall. In addition, there may be other components in your existing deal that may prevent you from making changes or for you to make without incurring significant costs. Some examples may include discounts, credits, or waivers based on total spending for all services or specific services, and disconnect order requirements, which may result in continued overlapping billing for circuits that you thought were disconnected but the provider denied based on a technicality.

In short, it is important to understand current obligations and factor them into your SD-WAN transition timing and cost model. This is true even if you are transitioning to an SD-WAN solution provided by your current service provider. Enterprises often over-rely on so-called technology transition clauses, which may preclude a move to a different service or technology with the same provider if the move reduces the provider’s revenue.

With an SD-WAN solution, you may need fewer customer edge routers in your network, so it is important to check your value-added reseller contract to understand the payment obligations for equipment you no longer need. You also need to ask your VAR if they have a relationship with your chosen SD-WAN solution provider that could mitigate some of your costs.

Key Point: Before you start using an SD-WAN solution, be sure to review your contractual obligations with your existing network service providers and value-added resellers. While your SD-WAN business case may indicate that you need fewer MPLS network transports and don't need expensive routers, you may still have revenue commitments associated with your legacy network and hardware that may offset some of the savings you're counting on.