The impact of SD-WAN adoption on Digital Transformation and corporate strategy: Part two
In part one of the blog we discussed about, the latest generation wide area networking (WAN) technology, SD-WAN. In part two of this blog Todd Kiehn, VP of product management at GTT, explains multiple factors from different horizons are driving IT teams to abandon a do-it-yourself approach and to rely instead on outsourcing SD-WAN services. According to Frost & Sullivan, 80% of enterprises are choosing managed SD-WAN services, compared to 20% doing it themselves.
Several types of providers offer SD-WAN, responding to the same problem with different approaches. Four general categories for SD-WAN service provider approaches are:
- Pure players, in which the SD-WAN solution and cloud-based management infrastructure are delivered by the SD-WAN vendors, and the network sourcing and other service requirements are the responsibility of the enterprise client or their representative.
- Network operators, in which the SD-WAN service, management, network infrastructure and any additional services are delivered by the network service provider as a comprehensive package.
- Integrators, implementing pure player solutions, typically in combination with network and security services procured from network operators.
- In-House solutions, in which an enterprise IT team brings together all the components, including SD-WAN rollout, network sourcing and security implementation.
Each approach corresponds to different needs depending on the level of expertise of the enterprise’s IT teams.
The Gartner Magic Quadrant for WAN Edge Infrastructure of October 2018 lists 20 SD-WAN vendors. While this list is a good start, we can add at least as many other companies that offer SD-WAN integrated with other services — for instance, Unified Communications as a Service. Factoring in the emergence of new kinds of IT outsourcing and security companies, we are currently in a highly atomised SD-WAN market.
To choose the best service, a decision-maker has to pay attention to requirements for cloud connectivity, path performance, geographic reach and the service provider’s experience. Does the SD-WAN solution have direct connections to the cloud applications that the business uses? How exactly does the traffic get from point to point? Does the provider’s reach match the business’s footprint? Do the service providers have experience managing complex hybrid networks?
From a macro perspective, SD-WAN is well positioned to become a strategic enabler for companies.
CIOs are now part of the core executive decision-making hierarchy of a company, driven by digital transformation projects. According to Deloitte, 46% of large companies’ CIOs report directly to their CEOs. With the explosion of mobile tools and applications, companies need to reorganise. They must deploy the same application performance to all employees to enable them to work on any site using real-time, seamless collaboration tools. To do this, SD-WAN provides an agile solution.
Indeed, thanks to the centralised orchestration of the SD-WAN performance at all sites, it is possible to adjust the level of performance of the connectivity according to the workload, and to aggregate the different types of access (fibre, copper, Wi-Fi, 4G and beyond) site by site.
Thus, this new technology not only impacts IT, but also impacts corporate strategy at the executive committee level. For example, SD-WAN could enable a new organisational structure and geographical team distribution, resulting in real estate savings. SD-WAN can allow easier M&A, faster rollout of new offices and branches, more reliable broadband in shops to facilitate more digitally enabled and immersive shopping experiences, and so on.
While enterprise networks are a complex ecosystem, made up of disparate connections (Internet, Ethernet, etc.), operators have the necessary information to support companies in their digital transformation with SD-WAN solutions. Expertise with edge applications like 5G and IoT can also offer them competitive and technical advantages.
The virtualisation of network technology that SD-WAN represents promises further upheaval to come. It used to be the norm for router equipment manufacturers to propose proprietary solutions. Over time, the telecommunications industry has evolved toward interoperability of equipment, in the hunt for increasingly meshed networks, reduced costs and increased capacity.
SD-WAN has so far enjoyed great success being delivered from proprietary vendor hardware. However, the next delivery model for SD-WAN, known as Universal Customer Premises Equipment (uCPE), breaks the link between hardware and software in an SD-WAN context. As these solutions become more capable and widespread, enterprises will be able to enjoy exceptional value and additional cost savings, thanks to increased flexibility for adding WAN optimisation, firewalls and more routing capabilities on a single hardware device.
We are only on the cusp of the SD-WAN revolution as the driver of network transformation for the cloud IT model underpinning the enterprise of the future.
The author is Todd Kiehn, VP of product management at GTT