After covering software-defined wide-area-network (SD-WAN) from its early gestation in the startup market to its current mainstream evolution, I think that people continue to question how powerful the movement is. This is wrong. SD-WAN has the potential to change the way enterprise networks and services are delivered. Period.
Currently, we are seeing a lot of players scrambling to position themselves, now that it's clear that there is strong demand for end users. Service providers want to get in the game by using SD-WAN to deliver new cloud services. And legacy hardware vendors such as Cisco are scrambling to buy software companies, such as Viptela, to integrate with their own hardware.
The importance of using software to deliver enterprise networking services cannot be underestimated. SD-WAN has the potential to replace routers, switches, firewalls, and application acceleration devices with an industry-standard device and software-managed services model.
Evolution of enterprise services
To understand the trend, let's look at how enterprise networking services evolved. In the 1990s, a revolution in client/server drove demand for Ethernet. There was a boom in supplying Ethernet switching driven by client/server applications. Edge routing followed, as enterprises and service providers needed was to connect their LANs to branch offices, private data centers, and the Internet.
That era spawned a host of companies that grew fast as they helped build networks that connected both the enterprise WAN and the enterprise LAN as well as offering important connectivity and security features. There was the need for specialized WAN equipment that could lock down connections, speed up applications, and generally optimize the WAN. Enterprises were encouraged to stuff their wiring closets with Ethernet switches, firewalls, application delivery controllers (ADCs), and routers. Service providers were limited in their offerings, which consisted of enterprise Ethernet services and private-line services such as MPLS.
Today, it's a different story. The Internet is as pervasive as ever, supplying consumer applications, business applications, and connecting to the giant private network in the sky—the cloud. The LAN has become less important, while the WAN rules. Enterprises need to be able to connect to these cloud applications more simply and securely—with software.
But managing the hardware has become a mess. Why do you need to manage dozens of proprietary networking boxes that deliver limited functions? And why is the functionality defined by hardware, rather than software?
Envision the IT and networking teams across thousands of enterprises contemplating this gigantic move to the cloud, while they stare at their complicated wiring closets with specialized equipment and ask, what do you do with all this legacy stuff?
Why SD-WAN matters
Maybe the SD-WAN is to the enterprise network as the iPhone was to the consumer phone market. Just as the iPhone combined photography, music and communications, the SD-WAN market will deliver a wide portfolio of enterprise network applications with a simplified hardware model.
Ultimately, the SD-WAN market will collapse much of the functionality of the legacy WAN as software onto an industry-standard CPE. These functions will include:
• Next-generation firewall
• Additional security services such as an intrusion detection system (IDS) and antivirus software (AV)
• WAN optimization
• Applications delivery control
• Routing and switching.
In the legacy WAN world, these functions were discrete markets ruled by individual companies dominating each market. SD-WAN is exciting because it completely shakes up the model, offering the opportunity for innovative new companies to collapse the functionality. And this of course will scramble the competitive field, potentially wreaking havoc on incumbents.
This opportunity is large. Futuriom has estimated it's multiple billions of dollars, as discrete markets such as firewall, WAN optimization, ADC, and routing and switching get subsumed by the new SD-WAN market.
This is also why the startup players in the SD-WAN market are diverse and distinct—attacking many services and functions, not just one simple WAN. The entire enterprise WAN market won't be collapsed in a single software suite overnight, but individual companies are picking off pieces of it as a time.
Futuriom's chart below sorts out the different applications of the SD-WAN and shows you how a whole host of companies are approaching this market.
A broad field of SD-WAN players are picking specific strengths and then extending the functionality. Aryaka Networks and Cato Network are focused on offering WAN cloud functions on their own private networks. Silver Peak Networks took its heritage in WAN optimization and added routing and next-generation firewall to collapse routing at the edge on an SD-WAN device. Aryaka is focused on optimizing branch-office connectivity on its own private network, to replace MPLS at a lower price. Versa Networks is building a suite of functions for WAN connectivity at the edge. VMware is taking its VeloCloud acquisition and integrating it with data-center virtualization technology to provide an end-to-end overlay that goes form data center to the WAN.
The benefit for the end-users will be a broad range of choices of software functionality—with a simplified approach to hardware. Almost all of these services are delivered on cheaper, easier-to-manage hardware, and programmed with software.
Many service providers have launched their own SD-WAN services platforms, many of the based on the technology provided by SD-WAN vendors. But if they see it simply as a strategy to replacing cannibalized MPLS sales, they've got it wrong. SD-WAN will be the strategic platform of the future to deliver a bulk of enterprise services ranging from VPNs to cloud applications delivery.
R. Scott Raynovich is the founder and chief analyst of Futuriom. For two decades, he has been covering a wide range of technology as an editor, analyst, and publisher. Most recently, he was VP of research at SDxCentral.com, which acquired his previous technology website, Rayno Report, in 2015. Prior to that, he was the editor in chief of Light Reading, where he worked for nine years. Raynovich has also served as investment editor at Red Herring, where he started the New York bureau and helped build the original Redherring.com website. He has won several industry awards, including an Editor & Publisher award for Best Business Blog, and his analysis has been featured by prominent media outlets including NPR, CNBC, The Wall Street Journal, and the San Jose Mercury News. He can be reached at [email protected]; follow him @rayno.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by Fierce staff. They do not represent the opinions of Fierce.