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MetTel, VeloCloud, Ovum Report Shows Rising SD-WAN Demand

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3/16/2017
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NEW YORK -- With customer engagement rates soaring, Software-Defined Wide Area Networks (SD-WAN) has emerged as the leading network technology to challenge multi-protocol label switching (MPLS) as the standard for enterprise communications services, according to analysts and industry leaders MetTel and VeloCloud.

MetTel has seen a dramatic spike in demand for SD-WAN with customer engagements tripling in 2016. The company has also seen 70% further growth in the first two months of 2017 compared to the same time period last year, with VeloCloud surpassing 50,000 sites supported.

SD-WAN is increasingly replacing MPLS-based networks as mobile, social and big data analytics applications proliferate and strain existing networks to a crawl. SD-WAN promises increased bandwidth and higher performance, while reducing costs versus using traditional private network resources.

The worldwide SD-WAN market for infrastructure and services will exceed $6 billion in 2020. For the 20152020 period, IDC estimates that the compound annual growth rate (CAGR) for SD-WAN will be over 90% .

According to Mike Sapien, Principal analyst, Enterprise services at Ovum, "The increasing demand for bandwidth and the flexibility to increase and decrease bandwidth in more real time has created the need for network services that allow increasing use of both business internet services, driving new hybrid WAN configurations and new software that enables this flexibility."

The growth of SD-WAN is part of a larger trend of businesses transforming their networks from older telephone-only lines to more dynamic digital infrastructures that can flex and scale to meet shifting demand generated by the rapid rise of personal technology and instant expectations of the one-click, one-tap buyer.

"SD WAN is suddenly the silver bullet of communications transformation for the tap-the-app environment," said Ed Fox, CIO and VP of Network Services for MetTel, "and the quickest way for IT, operations, finance and procurement leaders to meet their financial and performance metrics."

MetTel's SD-WAN backlog of projects also grew 170% in January and February. The surge in MetTel SD-WAN spans vertical industries including engagements with leading retailers, manufacturers, automotive suppliers, transportation agencies and waste management leaders, among many others.

"SD-WAN enables a hybrid network that can be software managed. The network is imperative to the company," said Bill Halnon, CIO emeritus of Republic Services (watch the full video here) and current president of Albedo Digital. "Connections to our branch offices are vital. You need the flexibility to go directly to the cloud and back to our data centers. Putting in SD-WAN is the next logical step toward having the network of the future."

MetTel's success is also attributable to its aggregated network that encompasses all major carriers and grants customers the broadest range of coverage and technology through a single point of contact. With an extensive portfolio ranging from traditional voice to advanced communications, cloud, mobility, IoT and managed IT services, MetTel delivers through its customer portal the flexibility and transparency needed to support businesses on their own terms.

VeloCloud had a record year in 2016 with sales climbing eight times over the previous year, total customer wins reaching 600 and the number of sites crossing 50,000. VeloCloud Cloud-Delivered SD-WAN simplifies branch WAN networking for today's increasingly distributed enterprises and service providers by automating deployment and improving performance over private, broadband Internet and LTE links. VeloCloud is partnering with many of the world's top tier service providers, including MetTel.

In its recent enterprise survey, Ovum reports significant interest in deploying Software-Defined Networking as an MPLS alternative or overlay with enterprises citing reduced cost, improved integration with cloud services and more service flexibility as the leading reasons.

Ovum outlines two primary configurations for early deployments of SD-WAN including an SD-WAN + MPLS hybrid architecture which allows customers to maintain contractual agreements on MPLS while also enjoying the benefits of SD-WAN performance, cost and feature flexibility. In many cases, the underlying MPLS provider has no idea that the customer has moved to an SD-WAN solution. Most early adopters of SD-WAN services are using this type of configuration, according to Ovum.

The second common option -- which seems to have growing interest -- is SD-WAN as a full replacement for MPLS typically using business internet services from two different providers at each location to provide full redundancy and reliability. This model accelerates the realization of cost and performance benefits for fastest return-on-investment.

Ovum also predicts that 2017 will be the year of SD-WAN launches by all major providers globally as it becomes a leading contender for traditional standalone MPLS replacement with a wide variety of new offerings expected to appear. According to Sapien, "many of the smaller innovative providers launch earlier and deploy many of these solutions faster than the traditional network providers."

Ovum's research and insight on WAN trends can be read in full via the following link: The Evolution of MPLS to Hybrid WAN Services: Hybrid WAN Services Evolve to SD-WAN.

MetTel

VeloCloud Networks Inc.

Ovum Ltd.

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