How SD-WAN is reconfiguring enterprise services

As software-defined wide area networks (SD-WAN) have evolved from their early days in the startup market to their current mainstream evolution, I think people continue to question this major technology shift, which has the potential to change the way enterprise networks and services are delivered.

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Currently, we see a lot of players scrambling to position themselves, and it’s clear that there is a lot of demand from end users. Service providers are looking to get in on the action by offering new cloud services using SD-WAN. Traditional hardware vendors like Cisco are scrambling to buy software companies like Viptela to integrate with their own hardware.

The importance of using software to deliver enterprise network services cannot be overstated. SD-WAN has the potential to replace routers, switches, firewalls and application acceleration appliances with industry standard appliances and a software-managed service model.

The evolution of enterprise services

To understand this trend, let's look at how enterprise network services have evolved. In the 1990s, the client/server revolution drove the demand for Ethernet. Ethernet switching technology, driven by client/server applications, flourished. Subsequently, enterprises and service providers needed to connect edge routing to branch offices, private data centers, and the Internet.

That era spawned many companies that helped build networks that connected corporate WANs to corporate LANs and provided important connectivity and security features that led to rapid growth. Specialized WAN equipment was needed to lock down connections, speed up applications, and generally optimize the WAN. Enterprises were encouraged to fill their wiring closets with Ethernet switches, firewalls, application delivery controllers (ADCs), and routers. Service providers had limited offerings, including enterprise Ethernet services and private line services such as MPLS.

Today, it's a different story. The Internet is as ubiquitous as ever, providing the applications consumers need, business applications, and connections to the giant private network in the sky, the cloud. WAN rules are becoming less important, and what enterprises need is the ability to connect to these cloud applications more simply and securely through software.

But managing the hardware is becoming a mess. Why manage dozens of proprietary network boxes that offer limited functionality? Why should functionality be defined in hardware rather than software?

Imagine the IT and networking teams at thousands of enterprises considering moving to the cloud, staring at complex wiring closets with specialized equipment and asking themselves: What do you do with all this legacy stuff?

Why SD-WAN is important

Perhaps SD-WAN is to enterprise networks what the iPhone was to the consumer cell phone market. Just as the iPhone combined photography, music, and communications, the SD-WAN market will offer a broad portfolio of enterprise network applications with a simplified hardware model.

Ultimately, the SD-WAN market will integrate most of the functions of traditional WAN as software into industry-standard CPE. These functions include:

• Next-Generation Firewall
• Other security services, such as intrusion detection systems (IDS) and antivirus software (AV)
• WAN Optimization
• Application Delivery Control
• Routing and switching.

In the traditional WAN world, these functions are dominated by individual companies in each market. What is exciting about SD-WAN is that it completely flips the model on its head, providing opportunities for innovative new companies. This will of course disrupt the competitive landscape and could cause serious disruption to incumbents.

The opportunity is huge. Futuriom estimates it's worth billions of dollars as discrete markets like firewalls, WAN optimization, ADC, and routing and switching are subsumed into the new SD-WAN market.

This is also why the startups in the SD-WAN market are diverse and unique, and these companies need to provide many services and functions, not just a simple WAN. The entire enterprise WAN market will not collapse overnight because of the emergence of SD-WAN, but individual companies will take parts of it at a time.

The graphic below from Futuriom categorizes the different applications of SD-WAN, showing how these companies are approaching this market.

SD-WAN players are picking specific strengths and then expanding their capabilities. Aryaka Networks and Cato Network are focused on providing WAN cloud capabilities on their own private networks. Silver Peak Networks has played to its strengths in WAN optimization, adding routing and next-generation firewall capabilities to the edge of its SD-WAN appliances. Aryaka is focused on optimizing branch office connections on private networks as a lower-price alternative to MPLS. Versa Networks is building a suite of capabilities for WAN connectivity at the edge. VMware is acquiring VeloCloud and integrating it with data center virtualization technology to provide end-to-end coverage from the data center to the WAN.

The benefit to the end user is a wide choice of software features, allowing for a simplified hardware approach. Virtually all of these services are delivered through cheaper, easier to manage hardware, and programmed through software.

Many service providers have launched their own SD-WAN service platforms, many of which are based on technology provided by SD-WAN vendors. But if they only see it as a sales strategy to replace MPLS, they are wrong. SD-WAN will become a strategic platform in the future, providing a large number of enterprise services from VPN to cloud application delivery.