The SD-WAN market grew quickly this year, and it shows no signs of slowing. In fact, it is expected to see a CAGR of at least 65 percent over the next five years.
SD-WAN is more than just a new acronym, rather it is a recent networking concept full of innovation and investment. The workplace of today has evolved such that enterprises are relying upon a wide array of mission-critical applications, delivered from the data center or Internet that help them run their businesses more efficiently, while also maintaining tight control over data security. SD-WAN as a new approach provides cost-efficient, reliable, secure, and effective application delivery by means of its wide area network design and operation.
The SD-WAN market is estimated by MarketsandMarkets to grow from USD 738.9 million in 2016 to USD 9,066.2 million by 2021, at an estimated compound annual growth rate (CAGR) of 65.11 percent. However, IDC suggests that the SD-WAN market will hit USD 6 billion by 2020.
The SD-WAN ecosystem comprises application providers, such as Cisco Systems, Inc., Ecessa Corporations, and CloudGenix. Other stakeholders of the SD-WAN market include SD-WAN vendors, software providers, product manufacturers, system integrators and migration service providers, and consultancy and advisory firms.
Gartner's Take – Time for a WAN Reset
"The WAN is a mess!" proclaimed Gartner Analyst, Andrew Lerner, during their recent Data Center Infrastructure and Operations conference held in Las Vegas, Nevada.
According to Lerner, enterprise networks are turning to complete disarray as many businesses continue building out their connectivity using legacy technologies, such as MPLS, while adding additional hardware at each location to maintain network efficiency.
"In the past, if we had issues with our network, we added more bandwidth," Lerner noted, "If latency was an issue, we added [WAN Optimization]. It's time for a WAN reset."
Three key factors have led to the complex state of today's enterprise network:
Migration to cloud and SaaS applications. Cloud is a crucial part of the network. With many of today's applications moving out of the corporate data center and into third-party cloud and SaaS environments, traffic flows within the network have drastically changed and become inefficient for application delivery.
Enterprise traffic dramatically increasing. Traffic within enterprise networks has doubled every 2.9 years. This workload increase has bandaged enterprises with routine practices such as incrementally adding bandwidth as a means to avoid network failure.
Maintaining this status quo can be looked at as a method of risk aversion, but it can also lead to a vendor lock-in, where enterprises are handcuffed by contracts to legacy technologies from providers. This can increase the cost of a network, and make it difficult for businesses of any size to be agile or flexible.
Constant deployment of additional hardware. The incremental approach to constructing a network has also led to a variety of optimization devices living at each office to maintain steady and consistent performance. This dramatically adds to the cost of a network and affects a company's bottom line. Not only does a business have to pay for their high-quality bandwidth, but they also have to factor in multiple devices at the edge to optimize the applications and data running through it. This does not even include the costs of staff you need for each location to maintain it all.
SD-WAN Needs to Partner with SD-Security
While they can share a similar architecture (if both designed using VNFs and open hardware), the synergy between SD-WAN and SD-security goes much deeper – to the use case level. One of the main value propositions of SD-WAN is the ability to seamlessly include Internet connectivity alongside MPLS to create a hybrid and unified WAN. The obvious security downside of enabling direct Internet access (DIA) from each branch office is the requirement for strong security at each site, which can be costly and very difficult to manage effectively.
With the emergence of SD-security, multi-layer security can be more easily integrated into an SD-WAN solution via software, which is not possible with a standalone appliance-based approach. The benefits for providers and enterprise IT teams alike are much simpler insertion of security into the branch to protect Internet access, far more timely service deployment and upgrades, and greatly reduced chances of one standalone network or security component breaking another one.
A Major Challenge
The fundamental role of the network is that of delivering reliable and fast application performance. This is something that most SD-WANs, in the absence of MPLS, today fall short of doing, due to their reliance on the public Internet that is prone to delivering frustratingly poor performance due to high packet loss and fluctuating latencies.
Those that need to rely on MPLS for performance, result in these solutions inheriting the shortfalls of MPLS, such as long deployment timelines, high cost, and lack of support for optimized cloud access.
Only a few vendors have developed failsafe SD-WAN capabilities that can truly support real-time applications like VoIP and videoconferencing, and deliver the reliable, predictable performance for all applications that enterprises users, CIOs, and WAN managers have come to expect.
Unsurprisingly, many organizations have experienced unplanned outages in the last 12 months. While it seems that unplanned outages "happen" or are part of the norm, most businesses cannot afford an outage. Market researcher IHS reports that enterprises can experience a loss of more than USD 1 million with a downed network, and some large organizations can experience a loss of more than USD 60 million – not exactly a cheap setback, especially with businesses running ever more mission-critical applications across their WANs. For enterprise WAN managers not wanting to risk their careers while leveraging SD-WANs and the public Internet to carry more and more of their network traffic, true failsafe WAN delivery will be critical.
One possibility is building it over a global private network that bypasses the public Internet on the congested middle-mile and delivers MPLS-grade connectivity globally, without all the hassles of large-scale investments for the network and long deployment times. As a result, it combines the benefits of SD-WAN technology with global private connectivity and WAN optimization to deliver an SD-WAN solution that focuses on enhancing application performance. Ultimately, no doubt the performance of the applications and hence the business is only as good as the network.
In 2017, telcos too are expected to play a big role in the SD-WAN market since they can bundle in a managed SD-WAN service with the MPLS or other transport services that an enterprise already buys from them. Globally, carriers are already launching various types of managed hybrid WAN services, and at least five carriers, AT&T, BT, CenturyLink, Interoute, Masergy, Singtel, and Verizon are planning the launch of SD-WAN-based services.
The India Story
With the growing trend of e-banking, e-wallets and ATMs coupled with workloads from loyalty programs, online discounts sites, portable devices, and wearables, and financial institutions are finding an overload of transactions on their platforms. In order to keep up with the tremendous amount of workload, these financial firms have started adopting IoT services.
In the end, enterprises win with lower capital and operating costs and service providers win with higher revenue and profitability.