Telecom operators have set their sights firmly on managed software-defined wide-area networks (SD-WAN) services for future growth -- and with good reason. Ovum forecasts that global SD-WAN services revenue will increase at a 21% compound annual growth rate over the next five years while overall enterprise services revenue experiences zero growth over that same time.

SD-WAN will be critical in offsetting declines elsewhere in the enterprise. With the stakes so high, Light Reading/Heavy Reading and MEF teamed up once again to launch a global SD-WAN Strategies Survey focused specifically on the opportunities for managed SD-WAN services offered by network operators to enterprise customers. In addition to MEF, Ericsson and Fortinet also sponsored the project. This blog highlights some of the key findings of the "SD-WAN Strategies Survey Report," which was published in December 2019.

Underlay access connectivity
By definition, SD-WAN is an overlay service provided on top of various underlay access connectivity, including Internet, Multi-Protocol Label Switching (MPLS), LTE, and others. One of the key benefits of this over-the-top service is the ability to run SD-WANs across multiple underlay connectivity providers without the need for formal service arrangements among providers. The downside is that, to date, providers have no visibility into third-party provider underlay networks.

But that needs to change. The survey data shows that the ability to monitor the availability of third-party provider underlay networks is in high demand. At 86%, nearly all of the service providers surveyed believe that monitoring the availability of third-party underlay connectivity is at least important, and 36% of providers feel that this visibility is absolutely "critical." Just 14% of respondents reported that third-party visibility is either "somewhat important" or "not important at all."

Figure 1: Q: How important is it for the SD-WAN service provider to monitor the availability of underlay connectivity services used by the SD-WAN service but delivered by another service provider? (N=125)
Source: Heavy Reading

Value-added services
Heavy Reading also asked operators about the most important value-added services they offer and plan to offer on top of SD-WAN. Naturally, WAN transport topped the list, with 43% having "already implemented" WAN transport with SD-WAN. Coupling connectivity with SD-WAN is a key pillar of managed SD-WAN strategies. But in many respects, the key observation of this data is that security (40%) has also developed into a strategic value-added service implementation imperative. This is confirmed by the almost identical scoring of WAN and security based on "already implemented" and "implementing now" scoring levels. SD-WAN and security have become inseparable.

Figure 2: Q: What value-added services are you planning to offer on top of your SD-WAN solution? (N=125)
Source: Heavy Reading

Threats to SD-WAN
As SD-WAN matures, the challenges around wide-scale rollouts are becoming more apparent. Complexity is a key theme, according to Heavy Reading’s survey. Complexity of managing a multivendor ecosystem topped the list of foreseen threats, followed by the complexity of managing a multicloud ecosystem. Following these two complexity challenges, competition fears formed the next tier of challenges. The shifting market dynamic from connectivity to applications (allowing vendors to sell direct) ranked third, while competition from SD-WAN vendors selling direct ranked fourth.

Figure 3: Q: Please rank the threats you foresee for your SD-WAN strategy. (N=125)
Source: Heavy Reading

In an encouraging sign for the market, the two economics issues Heavy Reading presented to respondents both ranked at the bottom of the threats list. The economics of multivendor SD-WANs ranked fifth out of six, and limited enterprise demand for SD-WANs was at the bottom -- indicating that these are not big concerns.

Readers interested in additional data points and analysis from this survey can access the full SD-WAN Strategies Survey Report.

This content is sponsored by MEF, Ericsson and Fortinet.

— Sterling Perrin, Principal Analyst, Heavy Reading