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Will SD-WANs Buck Past Trends?

Carol Wilson
9/30/2016

Why are telecom service providers racing to get software-defined WAN offers into the market? Verizon's Victoria Lonker provided the clearest answer in a virtual press conference this week on NFV and SDN: because enterprises want those services now.

"Many customers are moving to production and they are typically starting with SD-WAN solutions," she said in what Verizon Enterprise Solutions had billed as a virtual fireside chat on virtualization and its plans. "That is the low-hanging fruit because it is available now, it is proven to work and an enterprise can really achieve immediate and real business outcomes."

The speed with which SD-WAN services are now hitting the market may be a sign that network operators have learned from the mistakes of the past, and are now willing to cannibalize an existing pool of revenue -- namely their higher-cost MPLS connections -- in order to retain enterprise customers and deliver something else of value. Among the companies announcing SD-WAN services in recent months are Verizon, CenturyLink Inc. (NYSE: CTL), Masergy Communications Inc. , EarthLink Inc. (Nasdaq: ELNK), TelePacific Communications , MetTel , BT and RCN Corp.

SD-WANs separate physical network from the features that are delivered over it. They allow wide-area network connections to be created as virtual overlays, using either public Internet or private dedicated networks, and can be used to deliver connectivity that is tailored to specific applications. Today, the popular deployment -- and what Lonker references -- is use of SD-WANs to connect remote offices, in place of dedicated MPLS connections that are more expensive, much less flexible and more time-consuming to deploy.

Speed and flexibility are increasingly important to businesses as they digitize their operations and find they need much more bandwidth but don't have a bigger budget with which to acquire it, or the time to wait around for traditional service deployment, noted Andrew Dugan, group VP and interim lead for technology and IT at Level 3 Communications Inc. (NYSE: LVLT), at Light Reading's NFV & Carrier SDN Event earlier this month. (See Level 3: Focus SDN/NFV on Enterprise Issues and Level 3 VP: Enterprises Need More for Less.)

That's why SD-WANs are becoming popular as a means of securely connecting remote offices: They ride over Internet connections, don't require the expense or provisioning time of MPLS links, and can be delivered flexibly to account for peaks in traffic usage, such as for monthly accounting or regular software patches.

Next page: Managed services approach

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mweiner11
mweiner11
10/3/2016 | 7:42:59 PM
Re: Wise!
I agree with both of your, Mitch & Carol.  

SD-WAN is a great addition to a portfolio of managed services.  Though of itself, it can make a small portfolio through creation of a tiered set of services like "base SD-WAN" for connectivity, "premium SD-WAN" with integrated security, etc.
Marketin53297
Marketin53297
10/3/2016 | 12:27:56 PM
Re: Wise!
Thanks a ton!
Mitch Wagner
Mitch Wagner
10/3/2016 | 12:24:30 PM
Re: Wise!
Glad you asked! The conference is NFV & Carrier SDN: SDN Integration in the Virtualization Realm. It was last month in Denver. It seems to have been quite successful, so I would not be surprised if my colleagues on the events team repeat the event. 
Marketin53297
Marketin53297
10/3/2016 | 6:23:55 AM
Re: Wise!
hi, can you please tell the name of the conference you are referring to? I work at Aryaka, a SD-WAN provider, and would like to keep such events on my radar.
Mitch Wagner
Mitch Wagner
9/30/2016 | 2:38:07 PM
Re: Wise!
One theme I found intriguing at our recent SDN/NFV conference was that carriers shouldn't provide SD-WAN as a standalone service. That's a race to the bottom. Instead, carriers should provide SD-WAN as part of a suite of services. 
cnwedit
cnwedit
9/30/2016 | 1:12:55 PM
Re: Wise!
The trick will be actually letting this play out the way it should and not using old tricks like long-term contracts or add-ons that aren't customer-driven. 

It's a bigger change than it sounds.
Mitch Wagner
Mitch Wagner
9/30/2016 | 1:10:44 PM
Wise!
Service providers are wise to risk cannibalizing their own business. An incumbent that does not risk cannibalizing their own business will find that competitors are happy to do it for them. 
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