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SD­-WAN: Threat or opportunity for telcos?

06 Nov 2015

Disrupt or be disrupted. The message is short but clear: the business climate is changing  and organisations can either change with it or become irrelevant. 

That is certainly the case in networking and telecommunications, where the explosion of  cloud services and mounting frustration surrounding the high cost and inflexibility of  multiprotocol  label  switching  (MPLS) networks is forcing enterprises to rethink their  enterprise wide area network (WAN)  strategy.

Companies are now looking to the Internet to augment or replace their current WAN connections, opening the door for faster WAN provisioning and the ability to use multiple WAN paths at the same time. This WAN  transformation is being referred to as the software­defined WAN, or SD­WAN. 

Why is SD­-WAN so disruptive? As an overlay technology, it enables customers to augment or replace their MPLS networks rapidly and non­disruptively with any form of Internet connectivity. It provides visibility into all applications, plus the capability to control all WAN  traffic centrally.  It ensures that end users are satisfied with consistent and enhanced application performance. Finally it can lower  connectivity, equipment and network administration costs dramatically, by up to 90%. 

Friend or foe of the telco?     

At first glance, SD-WAN could easily be viewed as a competitive threat.  After all, the  objective of most implementations of an SD-­WAN by enterprises is to offset the cost,  rigidity and lack of control typically associated with MPLS.  And for most service providers, MPLS is a huge source of  revenue. However looking closer, one could argue that SD-­WAN  might very well become the  telco’s  best  friend. 

Realistically, the rise of SD-­WAN is already happening among global enterprises that want  to leverage broadband Internet to augment or replace their existing MPLS connectivity. Companies like memory products leader Kingston Technology and global  manufacturer Interroll have started to ‘broadband their WAN’ with SD­WAN technology, and are benefiting  from a lower cost, more agile network for their global operations. 

With most telcos continually looking to differentiate their business and provide value to  their customer base, SD-WAN can become their new, differentiated solution, delivering SD-WAN as a managed solution or as part of a network functions virtualisation  (NFV)  offering. 

SD-WAN  technology gives the telco a flexible software platform for delivering enterprise  customers with a variety of virtualised network functions. By leveraging SD-WAN  technology, telcos can offer these differentiated services to customers, maximise  operational efficiencies and introduce new revenue-generating services faster and easier than ever before. It can also set them apart from service providers who resist the SD-WAN  trend or are trying to derail  it.   

SD-WAN enables new offerings 

If companies are already moving to an SD-WAN, or possibly a hybrid WAN where they augment MPLS with broadband, which provider has the advantage? The one who can deliver  a solution that fits a need, or the one clinging to the old way of doing things and resisting  the  market’s evolution?

Adding SD-WAN to the mix can translate into building a customised WAN service portfolio  that includes managed WAN optimisation, virtual private networking (VPN), compression/de-duplication, and path-conditioning services. 

The bottom line is that the rapid adoption of cloud technologies and software-as-a-service  (SaaS) applications is leading enterprise customers to use network resources in new ways.  For telcos looking to augment their existing business with new and innovative managed  services, or NFV offerings, SD-WAN is a logical choice rather than something to fear and/or resist. 

By Doug Farndale, Vice President Asia-Pacific, Silver Peak

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