CenturyLink: Expect SD-WAN Surprises

DENVER -- NFV & Carrier SDN -- CenturyLink has racked up big surprises in a relatively short time deploying an SD-WAN service for its business customers.

"Since the invention of the wheel, product managers have been poor at predicting how customers will use, manage and want to pay for services we deliver. SD-WAN is no different," Eric Nowak, group manager of Internet, MPLS and SD-WAN at CenturyLink Inc. (NYSE: CTL), said at an SD-WAN panel Tuesday.

When CenturyLink deployed its SD-WAN service at the beginning of the year, it had expectations on how customers would view the importance of cost savings, the role SD-WAN would play on customer networks and more. All those expectations were subverted by reality. (See CenturyLink Sets Sights on SD-WAN.)

CenturyLink expected customers to be interested in getting cost savings from SD-WAN. In reality, customers weren't so much looking to save money as get more for the same spending, Nowak said. SD-WAN can provide five to ten times the bandwidth as conventional WAN with the same security and application performance, for the same money, he said.

CenturyLink thought its customers would transition their entire networks to SD-WAN. In reality, the transition is taking time, with new locations going on the new network and traditional connections remaining in place, Nowak said.

CenturyLink expected multi-tenant solutions would be important to its own infrastructure -- if the carrier could build a multi-tenant infrastructure, it could pass savings on to its own customers. "What we didn't understand is most customers are themselves multi-tenant," Nowak said. They have franchises, divisions and their own customers, all of which need to be managed independently.

"We as a service provider have customers with their own end customers," Nowak said. "We sell to customers that have their own end customers downstream."

So CenturyLink not only uses multi-tenant capabilities internally, but it also delivers those capabilities as a service to help customers manage their own customers.

CenturyLink expected customers would solve the new SD-WAN world the way they did the old world, separating the private network and Internet connection. But in reality customers need secure connectivity for public Internet applications such as local firewalls for eb surfing or providing Microsoft Office 365 internally.

Finally, while SD-WAN is not complex, it is powerful, giving network operators the ability -- and need -- to tune security and performance. SD-WAN needs to be tuned to allow Skype for Business and other applications to work, and that ability -- and need -- to customize "may be one of the things that limits adoption," Nowak said.

And that's just what CenturyLink learned from its first 50 customers.

"Those are a lot of lessons in a short amount of time," said Heavy Reading Senior Analyst Sterling Perrin, who moderated the panel.

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SD-WAN can provide service providers with an entry point to deliver an array of managed services, said Darrell Long, vice president of products at Versa Networks , which provides technology for the CenturyLink deployment. (See Versa Makes Its Mark at CenturyLink.)

Service providers need to "co-opt" SD-WAN into their own offerings, rather than simply reselling SD-WAN "off a catalog," Andrew Coward, vice president of strategy at Brocade Communications Systems Inc. (Nasdaq: BRCD), said. Simply reselling SD-WAN is a race to the bottom, as enterprises will group together circuits from multiple providers and go with the one that offers the best price performance, a pattern Perrin tagged "MPLS arbitrage." In that case, customers benefit by saving money, vendors benefit, but service providers lose out on revenue, Perrin said. Service providers can avoid this fate by combining SD-WAN into a suite of vCPE and other services.

Network troubleshooting-as-a-service is one of the ways CenturyLink avoids commoditization, Nowak said. "We're invested pretty heavily," he said. CenturyLink acquired analytics company Cognilytics and security services firm netAura and is leveraging those engines to look at SD-WAN traffic and logs, not only fixing network breakage but also helping customers configure networks to improve performance. (See Cognilytics Deal Speeds CenturyLink's Big Data Play and CenturyLink Powers Up Managed Security.)

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— Mitch Wagner, , Editor, Light Reading Enterprise Cloud