Enterprise demand for SD-WAN is so great that Ed Fox, CIO of MetTel, says his customers are skipping the usual tests or proofs of concept (PoCs).

"We've been seeing a tremendous growth in SD-WAN, particularly in the beginning of this year," Fox tells Light Reading during a briefing about new research that the company released in conjunction with its SD-WAN solution provider VeloCloud and industry research firm Ovum Ltd. (See MetTel, VeloCloud, Ovum Report Shows Rising SD-WAN Demand.)

"We've been through many proof of concepts with our customers throughout the last 18 months and it seems like, all of a sudden, we have customers coming to us and -- I wouldn't believe that I'd ever be saying this but -- they aren't even asking for proof of concepts anymore. They are just looking for the technology."

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Fox says that awareness of SD-WAN is so high partly because vendors are calling enterprises direct. "It creates an incredible market awareness that helps companies like us because the enterprises say, 'I don't know who these [vendors] are but my carrier that I trust is using them, and I don't want to deal with something new, so let me go to my carrier and see if they can make it work in my scenario.'"

SD-WAN is indeed trending. In the last two weeks alone, Orange Business Services , Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) and Vodafone Group plc (NYSE: VOD) have announced SD-WAN vendor partnerships and provided updates on their deployment plans. (See Orange Taps Riverbed to Add SD-WAN, Vodafone's Ocean Floats Nokia's Boat and VeloCloud Scores Telstra SD-WAN Win & Investment.)

Analyst firms are updating their projections as well, with Ovum showing that the SD-WAN market will exceed $6 billion in 2020, and IDC estimating that the compound annual growth rate (CAGR) for SD-WAN will be over 90% for the 2015–2020 period.

Figure 1: The Survey Says... Source: Mike Sapien, vice president US and principal analyst, Enterprise Services Practice, Ovum, TMT Intelligence, Informa

According to Fox, MetTel 's SD-WAN customer engagements tripled in 2016. The company has also seen 70% further growth in the first two months of 2017 compared to the same time last year. "The most significant part of this research is how the market is going to grow," says Fox. "Our experience is really tracking with what the analysts are calling for. It's not often that as analysts are saying it, it's happening at the same time."

MetTel has close to 10,000 business customers -- from Fortune 500s to single locations -- and most of what the company does today is enterprise-based solutions like SD-WAN, says Fox. "On average, it's 30-something sites that we are deploying per customer."

Giving a glimpse into what's ahead with SD-WAN growth, Fox says, "Although we do have customers with 1,000 and 3,000 sites, they are not fully deployed yet. A lot of what we have done so far with SD-WAN, it represents a small minority of networks that we are in. For example, we have a customer that has about 1,800 locations and today they only have about 80 on SD-WAN. They do things very methodically."

VeloCloud Networks Inc. , which is MetTel's sole provider of SD-WAN technology at this time, according to Fox, supports over 50,000 sites. Last week, Telstra announced it too was using VeloCloud for SD-WAN in China -- and that Telstra Ventures had invested in the vendor's Series D funding round. (See VeloCloud Scores Telstra SD-WAN Win & Investment.)

While the market for SD-WAN is on the rise, Fox notes that there are still challenges lurking that could cause hiccups, including the fact that SD-WAN is a loosely defined term right now. "It means a lot of different things to a lot of different people and there's a lot of misconception out there," he says. "We spend a lot of our time educating the customer -- some people think of SD-WAN as the ability to turn up their bandwidth on demand."

The newness of the technology is also a challenge. "Many of us are on Version 1, 2 or 3," says Fox. "If you compare that to some of the other versions of services that in my backbone -- Version 22 or 25 -- it's a new technology so if issues come up, you have to have really good people on it. That's a little different from the typical backbone, networking environment that used to exist."

Despite those challenges, demand for SD-WAN will continue to grow, notes Fox. "The underlying premise here is that end-users, branch offices, CIOs, IT guys, they are getting beat over the head on a daily basis by their internal departments for more bandwidth to the branches for applications -- and on the other side they have to save money," he says. "The confluence of those two interests will fuel this for the foreseeable future."

— Elizabeth Miller Coyne, Managing Editor, Light Reading

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