FierceTelecom is wrapping up an eventful 2016 by taking a hard look at five of the most important trends and developments that emerged in the market this year. Today’s installment looks at the growing market for SD-WAN technology.
The news: Now that SDN has been accepted as the method to implement software centric elements into networks, software defined wide area networking (SD-WAN) has emerged as a new service option for business customers that want to virtualize data connectivity at their remote sites.
SD-WAN is an approach to designing and deploying an enterprise WAN that uses SDN to determine the most effective way to route traffic to remote locations such as a company branch office.
What makes SD-WAN attractive to larger business customers that have multiple branch locations is that they can equip sites with a low-cost broadband connection: cable, DSL, or even a 4G LTE wireless link.
And customer acceptance of SD-WAN is growing. A recent Kable Global ICT Customer Insight study of over 2,600 enterprises across all regions revealed that 58.4 percent of respondents plan on adopting it by 2018.
A wide range of service providers, from AT&T to CenturyLink to Verizon to EarthLink, are entering the SD-WAN market. The market has also become a hotbed of innovation for emerging vendors like Versa and VeloCloud.
For example, working with Versa Networks, CenturyLink is allowing business customers to conduct a proof of concept of its SD-WAN platform. Verizon, meanwhile, plans to offer its SD-WAN in over 30 global markets across the United States, Europe and the Asia Pacific. And AT&T’s SD-WAN product will let customers manage application performance and bandwidth by allowing them to set parameters for routing data traffic across different access types.
Conspicuously absent from the SD-WAN market though are cable providers.
Why it matters: It will be years before SD-WAN completely replaces the well-embedded MPLS service base, but allowing businesses to connect their sites with low-cost broadband is very compelling, particularly in smaller sites where a large Ethernet circuit could be overkill.
While there has been a plethora of vendors happy to serve the emerging SD-WAN trend, the more compelling issue is that three of the largest telcos—AT&T, CenturyLink and Verizon—are currently offering or plan to offer a solution to their business customers. Businesses that don’t want to work with a large telco also have the choice of a host of competitive providers like MetTel, TelePacific and even Global Capacity when it releases its product next year.
However, there are still obstacles in the market. Service providers that are offering SD-WAN, particularly in off-net situations, will have to work with multiple providers. And, given the needs of medium and large business customers, service providers will need to find ways to ensure broadband uptime and security.