Managed SD-WAN providers see loads of cash in their crystal ball.
A recent study by Global Market Insights (GMI) predicts the managed software-defined wide area networking (SD-WAN) market to surpass $17 billion by 2025. That is a compound annual growth rate of 65 percent.
The study, written Ankita Bhutani and Preeti Wadhwani, gave a lengthy list of factors that drive demand. Cloud-based platforms require new solutions that increase network visibility and manage complex workloads, and businesses must oversee a plethora of IoT devices and mitigate related security risks. SD-WAN offers capabilities like intelligent load balancing and deep packet inspection that address some of these problems.
And there’s another important aspect: managed services.
“The demand for these services is expected to accelerate as organizations are outsourcing the implementation of their WAN infrastructure to managed service providers to reduce the complexities associated with the in-house WAN deployment,” they wrote in their report. “Managed services enable them to reduce their operational costs as the majority of the network functions are outsourced to third-parties.”
Cost stands out among the many drivers of managed SD-WAN adoption. The hot new technology makes it possible to abandon “expensive legacy infrastructure” and its maintenance.
“The traditional WAN infrastructure relied on expensive hardware appliances to provide connectivity to remote locations. By deploying SD-WAN solutions, organizations can reduce those expenses,” the study said.
That may be why 75 percent of the SD-WAN market share belonged to the physical appliances in 2018, according to the study. The study notes businesses can save money when SD-WAN uses a single product to merge required networking functions with coveted security capabilities.
Some technology providers have already capitalized on the managed services trend.
Illinois-based MNJ Technologies recently won a bid with a national electrical contractor. The customer had been running MPLS circuits to each of its sites in a partnership with a major carrier.
Ben Niernberg, MNJ’s senior vice president, said the client had four major issues.
Niernberg told Channel Partners that almost all of his customers present the same four issues.
“That’s a sweet spot for me. MPLS customer, lack of redundancy, service issues with the major carriers (which are chronic),” he said. “It’s almost the perfect storm for us to come in with SD-WAN and our fully managed solution.”
MNJ gave the customer Silver Peak hardware coupled with broadband and dedicated internet access (DIA). The company will still use the incumbent carrier’s fiber, but MNJ bills, manages and maintains the connectivity.
And Niernberg said this one-throat-to-choke approach joins MPLS replacement as another source of cost-savings for the customer.
“We ethically pit the carriers against each other to find the best price for our customers,” he said.
But what differentiated the Silver Peak SD-WAN offering from the SD-WAN offerings carriers produce in partnership with vendors like VeloCloud and Versa?
Niernberg said he questions if carriers are examining their customers objectively. The technology can be used to augment and preserve MPLS, which faces …
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April 19 2019 @ 18:17:02 UTC