The widespread adoption of SD-WAN continues to impact the $40 billion market for managed business services. Technology enhancements, market consolidation and service expansion are the market highlights for 2018. Also, Doyle Research explores six leading trends that will define the SD-WAN market in 2019.
So what exactly is SD-WAN? It's a software-based network overlay technology that provides abstraction for WAN services. It enables communications service providers (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.
A look back: SD-WAN in 2018
In the highly competitive SD-WAN technology market, suppliers made significant technology advances in 2018 including improved security, additions to cloud/centralized management features, and support for multicloud connectivity. Suppliers also continue to broaden their edge network technology portfolios with Wi-Fi, firewall and routing features on the way to supporting SD-Branch. Numerous CSPs enhanced their managed SD-WAN offerings, including expanding their offerings globally. For example, AT&T now offers SD-WAN service in 150 countries.
CSPs continue to hedge their managed services bets by adding managed SD-WAN service offerings from additional suppliers. The CSPs continue to rely on MPLS revenues but increasingly offer two or more SD-WAN services, sometimes targeting one at large customers and another at small businesses. For example:
- AT&T supports VeloCloud (VMware) and an internally developed solution.
- CenturyLink added Cisco SD-WAN to its portfolio (in addition to Versa).
- Verizon supports Cisco, Versa and a white box SD-WAN service.
- Orange supports Riverbed and Cisco SD-WAN.
A look forward: What to expect in 2019
Internet is going to be the dominant WAN service in 2019. This is an ongoing trend that will take a number of years to fully materialize, but SD-WAN provides the security and QoS to make bonded internet services the choice for WAN connectivity. MPLS will remain a legacy service, but it will decline in importance over time.
More supplier consolidation
Oracle’s recent purchase of Talari is another example of large suppliers picking up small SD-WAN vendors. With several dozen (mostly small) SD-WAN providers in the market, I expect the acquisition/consolidation trend to continue in 2019 and beyond.
Decline of the branch router
Many organizations and CSPs will move away from the branch router as the primary branch WAN device in favor of SD-WAN or firewall solutions. SD-WAN and firewall suppliers will continue to add advanced routing features to their products.
4G LTE becomes a primary WAN link
Advances in 4G LTE (and soon the introduction of 5G) mean that wireless connections can be the primary WAN link for many organizations. 4G LTE will be added to the WAN service mix to improve reliability and add bandwidth to existing wired connections. SD-WAN makes the ability to mix and match a number of WAN connections easy.
More on-ramps for cloud connections
Consistent user experience requires reliable and fast internet connectivity to leading IaaS (AWS and Azure) and SaaS, such as Office 365, platforms. Service providers will continue to build out local points of presence as on-ramps to speed branch user connectivity to the cloud. Service provider on-ramp partnerships are also a good option here.
SD-Branch becomes a viable option
SD-Branch offers a full range of branch WAN and LAN connectivity as an integrated solution. It eliminates the need to have five-plus boxes in a traditional branch such as router, SD-WAN, WAN optimization, firewall, VPN, Wi-Fi, Ethernet switch, etc. As SD-Branch solutions mature, their attractiveness in terms of ease of deployment and management continues to grow. Service providers will start to offer managed SD-Branch solutions in 2019.
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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