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Digital and WAN transformation leading to the emergence of SD-WAN

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28 September 2016

Global Services

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IDC believes that large multiregional enterprises are now looking closely at viable ways to explore SD-WAN strategies and rollouts.

By:

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Rohit Mehra, Vice President, Network Infrastructure, IDC.

     

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Sathya Atreyam, Research Manager, Worldwide Mobile and IoT Network Infrastructure, IDC.

An ever-increasing proportion of business is moving online and to the cloud. This requires flexible and agile network infrastructure that can dynamically adapt to meet changing business needs. In the cloud era, attention is now turning to how the WAN can accommodate the dynamic requirements of hybrid enterprises. Software-defined WAN (SD-WAN) brings a valuable capability to realize hybrid cloud strategies especially in large enterprise IT networks. The need for SD-WAN is rapidly picking up pace, driven largely by innovative service providers seeking to help their enterprise customers achieve greater performance and cost efficiencies while optimizing application experience. While some enterprises may evaluate some of these transformative WAN solutions themselves (DIY), many enterprises look to their service providers to help them transition towards Hybrid and SD-WAN architectures while keeping their traditional, reliable IT infrastructures and services intact.

Opportunity.

SD-WAN provides the network with an opportunity to go from being a perceived “cost center” to being a valuable business enabler. Today, IT teams in an increasing number of large enterprises are willing and able to adopt automation and orchestration technologies that are integral to SD-WAN. These large enterprises are proactively asking themselves questions including:

  • What are our organization’s strategic IT priorities?
  • How is our organization’s application profile changing, and what does that mean for the WAN?
  • What is our organization’s exposure to cloud-based applications, today and in the future? How will the WAN have to change to accommodate the shift?
  • Can a hybrid WAN accommodate IT needs and serve as a precursor to SD-WAN?
  • Do we as an IT organization have a thorough understanding of what features and functionality are important to us in an SD-WAN solution?
  • If we opt for an SD-WAN solution, how will we want to deploy it — onsite as a technology solution from a vendor, as a cloud-based service from a vendor, or as a service obtained from a communications service provider (CSP) or an MSP?

Business Imperative.

Business demand drivers for SD-WAN include not only the increased adoption of cloud services, which necessitate a requirement for increased WAN agility and flexibility, but also the increasing cost and complexity of managing enterprise WANs and the steady migration of enterprise data traffic from WANs to the Internet.

Evolving Traffic Patterns vis-à-vis Budgets.

In most organizations, there is often an increase of 30%–40% in network bandwidth capacity per year. This substantial network growth requirement is necessary to support these new data, voice, and video collaboration applications across the multiple geographic locations of an organization, including connecting to external cloud-hosted applications, all within the constraints of a flat budget in which typically 15% of IT budgets are allocated to communications and connectivity.
While application traffic traditionally traveled from a desktop in a branch to a datacenter, today, it might originate on the desktop or a mobile device and move to the datacenter, a software-as-a-service provider, or an infrastructure-as-a-service provider such as Amazon, Google, or Microsoft. Simply adding more bandwidth or using traffic-shaping capabilities isn’t sufficient to support rapidly changing applications crossing the WAN from an increasing variety of branch office locations, remote sites, and remote smart devices.

Security Considerations.

MPLS has traditionally been considered secure because it provides isolation. With SD-WAN, carriers can upsell customers’ multiple Layer 3 VPNs (for segmentation) using multiple transport options (including MPLS) that provide both isolation and end-to-end network encryption. This advantage applies not only to new and emerging cloud apps, but also to traditional IT applications that do need to be supported in parallel. Integrated security and segmentation is becoming a requirement in many sectors such as financial services and healthcare. Key elements of these new SD-WAN service offerings will leverage encryption, path control, policy management, overlay networks, and on-demand subscription capabilities of the underlying technology, which are embedded in many of the network infrastructure solutions available today. This is validated by recent IDC research that shows nearly 57% of enterprises have plans to move to a carrier-managed VPN within the next 24 months.

Build Versus Buy.

SD-WAN consumption preferences could differ across geographic and vertical markets. Some enterprise customers will want to obtain SD-WAN as a service from their favored service provider, whereas others will opt to obtain SD-WAN offerings from technology vendors and deploy them via a DIY approach. Alternatively, some SD-WAN solutions will be offered as a cloud-based service, with cloud-based management, either by vendors themselves or via service providers.

IDC believes that large multiregional enterprises are now looking closely at viable ways to explore SD-WAN strategies and rollouts. Before embarking on a transition towards SD-WAN, these large enterprises look for guidance from service providers with a global footprint and an understanding of the relationship between applications and the underlying network. Enterprises facing skills gaps or resource constraints are considering SD-WAN managed services so as to reduce management overheads and related costs. Typical managed services include comprehensive deployment and management of SD-WAN solutions that are often wrapped-in product offerings from market leading SD-WAN vendors. In IDC’s recent SD-WAN survey, nearly 80% of respondents highlighted the vital role of professional services when implementing SD-WAN solutions.

We supported IDC in its independent study of the SD-WAN market landscape. IDC conducted a global study of 600+ mid-market and large enterprises around the world (Australia, Canada, China, France, Germany, India & Japan). Find out more and download a copy of this SD-WAN Infobrief.