The widespread adoption of SD-WAN continues to impact the more than $40 billion market for managed business services. Managed service providers (MSPs) will play a growing role in delivering managed SD-WAN services, especially with medium and small organizations or those with lean IT staffs. SD-WAN providers need to improve their platforms to better deliver SD-WAN as a service, ease integration with MSPs, and to aggressively promote MSPs as channel partners.
SD-WAN is a software-based network overlay technology that provides abstraction for WAN services. It enables CSPs to rapidly deploy new hybrid WAN services—for example, internet plus MPLS—with significant improvements in ease of deployment, centralized management, application prioritization, and security.
Managed SD-WAN in 2019
In the highly competitive SD-WAN technology market, which includes dozens of vendors, suppliers are making significant technology advances in 2019, including improved security, additions to cloud/centralized management features and support for multi-cloud connectivity. Suppliers also continue to broaden their edge network technology portfolios with Wi-Fi, firewall and routing features. Numerous service providers are enhancing their managed SD-WAN offerings, including expanding their offerings globally.
Managed service providers as a channel
MSPs, excluding communications service providers, are currently a small part of SD-WAN supplier revenues at approximately 10%, according to Doyle Research. MSPs and system integrators (SIs) have the potential for strong growth with SD-WAN given their ability to provide independent WAN transport from multiple SPs including both internet and cable. The high-speed capabilities of advanced 4G LTE and soon 5G add even more SD-WAN connectivity options. Many organizations will look to outsource all WAN options, including SD-WAN technology, as they look to focus on their core business with limited IT resources.
SD-WAN providers with notable MSP programs include VMware/VeloCloud, which has significant MSP revenues, and Versa Networks with its multi-tenant capabilities. Aryaka offers its SmartConnect technology as a managed, global SD-WAN as-a-service. Many other leading SD-WAN providers are improving their ability to offer their platform as a service and aggressively recruiting new MSP and SI partners.
Conclusions and recommendations
MSPs, with powerful SD-WAN technology, are poised to impact the larger market for managed business services. The highly competitive SD-WAN vendor market will rapidly work to improve multi-tenancy, orchestration and security integration to enable SD-WAN-as-a-service. The ability to mix and match multiple providers of high-speed internet, cable and 4G/5G services will provide the reliability, redundancy and performance to gradually displace costly MPLS services. MSPs will be a critical channel to serve medium and smaller organizations as well as those with a “lean IT” philosophy.
Lee Doyle is Principal Analyst at Doyle Research, providing client focused targeted analysis on the Evolution of Intelligent Networks. He has over 25 years’ experience analyzing the IT, network, and telecom markets. Lee has written extensively on such topics as SDN, NFV, enterprise adoption of networking technologies, and IT-Telecom convergence. Before founding Doyle Research, Lee was Group VP for Network, Telecom, and Security research at IDC. Lee holds a B.A. in Economics from Williams College. He can be reached at [email protected] and follow him @leedoyle_dc
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