It depends on the challenges that their current network is facing – especially the amount of additional bandwidth that is needed. It also depends on which part of the world their network is in as relative costs of transport technologies vary dramatically by region and country.
To help large organisations understand what the changes may be, I’ve found Gartner’s recent report, Fact or Fiction: Does SD-WAN Really Save You Money?, highly useful.
Gartner have used their insight into pricing on a country by country basis for MPLS, Direct Internet Access (DIA) and broadband internet, along with the typical sizes and topologies of those corporate networks upon which they have based their research findings. They have modelled the “before” architectures for a typical site types and then looked at the “future” architecture.
I believe the findings show that whether you’d save money is based upon the amount of additional bandwidth needed and the relative prices for MPLS and internet services at your location. If you need a lot more bandwidth:
“Reductions in enterprise site per megabit monthly network services expenses across three major regions can result in savings. In the U.S., Gartner saw organizations with savings of as much as 378%; in EMEA, 225%; and in APAC, 184%.”
These percentage savings in cost per megabit are from the small sites with low business priorities moving from MPLS to broadband with LTE backup. Whilst the per megabit savings are present in most site types in the US (typically in the order of 50 per cent to 150 per cent), the per megabit percentage savings in Europe are typically in the teens with even lower savings across Asia/Pacific.
However, if you don’t need double the bandwidth we see cost per site rises in eight out of the ten size/criticality combinations in Europe, seven out of ten in Asia and five out of ten in the US.
Firstly, there is a significant difference in the price differential between MPLS and DIA in North America, but far less in Europe and Asia. For example, Gartner say:
There is high price sensitivity for countries that border the European region. This includes the Gulf region, where network services expenses can be up to 20 times those in Europe.
This would perhaps explain why the SD-WAN market has taken off fastest in North America. Not only are the cost differences to move away from MPLS so much higher, but the North American market has a far higher proportion of enterprises that manage their own networks – so the simplification of management of branch routing offered via SD-WAN is a major benefit direct to Enterprise IT. The European, Asia and global enterprise markets are mostly served on a managed basis via Service Providers (SPs), where these benefits are seen by the SPs who have already built tools to automate such routing changes so enterprise IT organisations see less direct benefit.
Also, the benefits here assume a move from all-MPLS to hybrid and SD-WAN. Many organisations have already implemented hybrid, as Gartner note:
“However, enterprises that already have multiple connection access designs and have employed policy-based routing (PBR) to achieve higher availability and performance will have limited incentive to deploy SD-WAN as the value of the incremental expense is diminished.”
This analysis is backed up by our own experience. Our BT Consulting team have worked with multiple customers to analyse the business case for moving to SD-WAN. Looking at one example, a customer had a network that comprises 100 sites distributed globally, some 50 of which are on MPLS technology and classified as large and of high business priority, and 50 smaller sites. In this example, deploying an SD-WAN along with significant move away from MPLS to DIA would deliver double the bandwidth for around a 10% increase in cost, a 50 per cent increase in bandwidth for about the current cost, and achieve a 20 per cent decrease in cost at current bandwidth levels. The additional costs of the SD-WAN solution was around 10 per cent of the overall network running cost.
So the cost benefit of deploying SD-WAN will be different for each enterprise, as each organisation has a different mix of geography and types of sites – and will depend upon the degree of bandwidth growth challenge being experienced at a site.
The Gartner report is a good first place to start to get a view of how the underlay or transport costs of your network will be affected.
However things are never simple, as there are two other key aspects of a move to SD-WAN. The first is the impact on security, and the second the impact on application performance.
This all may seem daunting to address alone – however providers such as BT who know the real costs of underlay networks and have the real experience of rolling out SD-WAN solutions can help build the business cases and then actually deliver the business benefits that enterprises are seeking.
Download your complimentary copy of Gartner’s 2018 report: Fact or Fiction: Does SD-WAN Really Save You Money? to help you plan your SD-WAN implementation.
Gartner, Fact or Fiction: Does SD-WAN Really Save You Money?, Ted Corbett, Andrew Lerner, Mike Toussaint, 27 February 2018.
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