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What’s Driving Double-Digit WAN Spending Growth?

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Lorna Gareyjust-released survey by IHS Markit shows North American enterprises expect their WAN expenditures to rise by more than 20 percent annually — exceeding $1 million beginning this year. Four out of five respondents also plan to adopt SD-WAN over the next four years.

The data is based on interviews with purchasing decision-makers at 163 midsize and large enterprises, and while you might think this growth is just about the perennial need for more and more capacity, the survey shows adding better security is actually a top change respondents plan to make to their WANs over the next year.

Not that traffic growth isn’t pressing: IHS says respondents expect their bandwidth needs to grow around 30 percent annually, with leading drivers being backup/storage and collaboration tools. Given that, 20 percent spending growth seems a bit optimistic.

As to security, time was, customers figured they didn’t need to worry about data traversing an ISDN or MPLS network, because the protection baked into private lines by carriers was sufficient. No longer. Customers now recognize that they need to pay attention to WAN security. That’s partly because of more cloud use, partly because more traffic is quickly moving off MPLS and onto the Internet. Some consultants, including Collaborative Communications Consulting, even recommending cutting the MPLS cord altogether and moving all WAN traffic to the Internet under an SD-WAN umbrella. See founder and CEO Matthew Toth’s reasoning and business argument here.

That shift to much less-expensive Internet connections, enabled by SD-WAN, is freeing up budget that once went to carriers. Are you ready to scoop some of it up? As we point out in our SD-WAN Seller’s Guide, designing and operating dependable, secure wide-area networks using a mix of public internet and private circuits is complex. Partners can provide strong central security policy enforcement, network monitoring and encryption, typically via IPSec tunnels, over untrusted physical connections.

Channel-focused suppliers have made some recent announcements relevant to WAN security:

  • Boise-based Cradlepoint, which provides unified management of wired and wireless broadband, closed this week an $89 million Series C funding round and says it plans to capitalize on disruption in the enterprise WAN market by expanding its investments in SDN, 4G and 5G wireless, and enterprise Internet of Things networking. Channel chief Ed Walton told Channel Partners that the company is planning enhancements to its partner enablement and certifications as well.

“Channel partners and the channel ecosystem are hugely important to Cradlepoint’s success,” Walton told us. “We are a 100-percent channel company, something that we’re very proud of.”

  • Earlier this month, SD-WAN provider VeloCloud Networks also closed some funding, in its case a $35 million Series D round, hot on the heels of inking a deal with startup NetFoundry. The NetFoundry software adds programmable end-to-end packet security across any mix of Internet access networks. It’s interesting technology and worth watching if you have customers using SDN and containers.

VeloCloud CEO Sanjay Uppal told Channel Partners that the $35 million will go to expand the company’s geographic footprint while consolidating its position in the North American market, growing its product road map and adding training opportunities for partners. You can hear more from VeloCloud co-founder and VP of product Steve Woo in our session, 3 Ways the Channel Benefits From SD-WAN, at the upcoming Channel Partners Conference & Expo.

  • Recently cloud access security broker (CASB) provider Netskope announced a pact with SD-WAN provider Viptela (an exhibitor at #CPExpo) whereby joint customers can apply CASB to WAN links. Recently, Intel Security EMEA CTO Raj Samani told me that he expects cloud access security brokers to become more ubiquitous than firewalls thanks to their ability to restore control over access to data and applications in the cloud. CASB technology enforces a customer’s policies on cloud use by, for example, requiring two-factor authentication, checking a device for malware, enforcing encryption and more. They’re a natural upsell to an SD-WAN.

Will I see you in Las Vegas next month? It’s the 20th anniversary of the Channel Partners Conference & Expo, and it’s our biggest yet. Attendance is trending up 15 percent over last year, we have more than 60 new exhibitors across 177,000 square feet of expo hall, and we’ve assembled a stellar lineup of education and keynote programming, including our first pre-con focused on growing your business. Check out the lineup.

Follow editor in chief @LornaGarey on Twitter.


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