Move over aerial taxis and connected street lamps, 5G is coming for SD-WAN. But is 5G even the hero SD-WAN needs?

One of this year's latest hyped use cases for 5G is delivering added intelligence and transport options to SD-WAN services. Ahead of Mobile World Congress in February, Verizon and AT&T announced they would add 5G to their SD-WAN services. 5G could be used to dedicate network slices to improving SD-WAN's ability to manage traffic and prioritize applications.

Roman Pacewicz, chief product officer at AT&T Business, told Light Reading at MWC that the service providers' expanded relationship with VMware's VeloCloud would provide customers with the means to utilize advanced LTE wireless broadband as an option for transport technologies for SD-WAN networks, upgradeable to 5GE as networks are deployed.

"Software-defined networking is all about control -- routing application flows instead of just packets," said Pacewicz. "That intelligence could be enhanced through 5G where you could slice the network and provide specific performance for a subset of your applications and use cases. You could leverage dynamic-traffic management to protect certain streams."

Orange Business Services' Didier Duriez, EVP of Global Solutions, also told Light Reading at MWC that "5G will multiply the opportunities for SD-WAN ... I think it will be another boost to SD-WAN adoption."

With 5G deployments barely off the starting block, it's a little too early to tell what type of impact 5G will have on boosting both the SD-WAN market and the types of new features offered, says Sterling Perrin, Heavy Reading principal analyst of Optical Networking & Transport.

"5G has such a long rollout," says Perrin. "If you're talking about the next year or two, the impact has to be minimal for SD-WAN. What they're probably getting at is that in a hybrid situation with SD-WAN, you can see multiple types of circuits."

As an overlay technology, SD-WAN can already utilize 4G LTE as a circuit type if the broadband connection drops. SD-WAN could certainly use 5G in a similar capacity -- as another delivery option -- but beyond that, Perrin says we might have to wait and see how the 5G market matures in terms of the impact it could have one boosting SD-WAN services and sales.

In addition to kicking around the idea of 5G's impact on SD-WAN, Perrin shares insights on how the SD-WAN market might evolve this year overall by considering potential supplier consolidation, a new outlook on the economics of the uCPE model, growth opportunities for the managed services market, and why enterprises want to get back the basics with SD-WAN.

Will SD-WAN Replace MPLS?
When SD-WAN was the new kid on the block, industry predictions led many to believe it would be a replacement for MPLS. The conversation changed from SD-WAN or MPLS to SD-WAN and MPLS about two years ago, and Perrin predicts the "and" model still has quite a bit of runway.

"It's more a cap and grow strategy," says Perrin. "MPLS networks that are in place are going to be saved for the most critical, high-reliable traffic on the enterprise network. As things are put into the cloud, a lot of new capacity will be bought through an SD-WAN model … SD-WAN is not really in a position to eliminate MPLS because it's an overlay/underlay model. Guaranteeing that underlay is very difficult -- as long as enterprises have requirements for guaranteed traffic and highest reliability, there will be a need for MPLS for many years to come."

While typically a pricier option for customers, MPLS remains an important technology for delivering business-critical, highly reliable traffic. Because of that, SD-WAN won't replace MPLS anytime soon, but it will cap growth opportunities for MPLS, add Perrin.

Next page: Cable comes into the picture

Cable comes into the picture
While cable companies showed up a little late to the party -- Comcast launched its ActiveCore SD-WAN service September 2017 -- the MSOs have a unique competitive advantage over telcos in the SD-WAN market. Perrin says cable companies don't have to worry about cannibalizing their MPLS services with SD-WAN. Plus, they have a strong foundation in delivering broadband, which sets them up well for SD-WAN services.

"We're seeing a reasonable interest from businesses in partnering with cable companies for managed service," says Perrin. "I'm sure that trend is going to continue. It's a great avenue for them to get more entrenched in business services -- it fits them well."

Where cable companies will need to catch up to telcos is in delivering business services, which have historically been more in the telco's wheelhouse.

Vendors, vendors everywhere
Enterprises have the option to go with either a telco or cable company as their SD-WAN provider, and the market is still flush with at least 30 SD-WAN vendors. That's "way too many suppliers… even ten is probably too many" for both enterprises and service providers to consider, says Perrin.

Perrin adds that the market would benefit from more consolidation -- smaller businesses will be looking to the larger, well-known vendors and services providers for SD-WAN delivered as a managed service. Perrin says startups, the most vulnerable SD-WAN suppliers, may fade away shortly as they start to run low on funding -- "it's not really startup territory so much anymore," says Perrin.

Brand recognition will also become increasingly important. Perrin says Cisco's acquisition of Viptela and VMWare's acquisition of VeloCloud were smart moves for both companies as Cisco and VMWare have strong brand recognition with enterprises. Selling these types of products to the enterprise market is firmly entrenched in their DNA, he adds. Smaller SD-WAN vendors could be scooped up by larger companies this year as end users seek to leverage existing vendor relationships to onboard SD-WAN services.

SD-WAN heads down market
As SD-WAN matures and moves down market, Perrin predicts an uptick in the managed service consumption model for SD-WAN, versus the DIY approach. Smaller businesses that lack the in-house expertise to manage SD-WAN on their own will be looking to the top service providers as well as some value-added resellers.

"The managed approach is a growth area for sure," says Perrin. "As [SD-WAN] moves from its origins in the very large, sophisticated enterprises to down market … that will lend itself to a managed provider versus do-it-yourself."

As SD-WAN adoption grows among smaller businesses, Perrin says these companies are more interested in the original promise of SD-WAN to reduce network complexity and less swayed by advanced features like the addition of 5G as a transport option.

"A lot of the interest is just around reducing the complexity of these hybrid networks … In that sense it's getting back to the basics more than whiz-bang features," says Perrin.

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— Kelsey Kusterer Ziser, Senior Editor, Light Reading