In part three of this blog, I’ll continue the story on the evolution of SD-WAN from DIY to a mainstream managed service offering, part one can be found here and part two can be found here.
SD-WAN Managed Services
The second wave of SD-WAN deployments heralded a change in the delivery of Enterprise network services. Competition increased with a number of new challengers entering the market with innovative services that provided a management framework of both the WAN service and underlay connectivity to build the WAN.
Examples of this include new entrants to a market, like SDNBucks in the Netherlands who offer innovative SD-WAN services like the WAN for SciSports, a leading provider of data in intelligence for professional soccer (football) organizations.
The increased market pressure of these new competitive providers led many traditional Service Providers to invest in an SD-WAN platform like Nuage Networks from Nokia and to operationalize SD-WAN as a premium network service offering alongside their more traditional IP-VPN and Carrier Ethernet VPN services.
With an operationalized SD-WAN platform, one that’s fully integrated into the network of the provider, into their support systems and fully under the control of their network operations center there is the ability to provide fully separated multi-tenancy and customer isolation.
It also allows the Service Provider to offer a wide range of value-added service that turns the SD-WAN service from a branch connectivity service into a business-oriented service that delivers the connectivity, communication and security services that an Enterprise requires as part of their digital transformation.
This market trend towards managed SD-WAN services, or SD-WAN as-a-Service (SD-WANaaS) has been identified by a number of leading analyst firms, some examples include:
Gartner – In their report Market Guide for SD-WAN Services published in May 2019 calls out:
“Enterprises struggling to balance expense reduction with greater WAN agility and performance are increasingly turning to managed SD-WAN services.”
And in the Gartner, 2018 WAN Edge Magic Quadrant they commented that:
“On a global basis, most WAN edge infrastructure is provided as a managed service, either via a service provider or systems integrator”
Another leading Analyst company, ACG Research and their CEO and Principal Analyst Ray Mota mentioned in their The Time Is Now for Service Provider SD-WAN report published in Q3 of 2019 that;
“Direct-to-customer (or DIY) solutions have led the market to date, but they have been losing momentum as more enterprises realize that deploying and operating SD-WAN is far more complicated than they expected. Increasingly, they want a partner that can deliver SD-WAN as a managed service. The accelerating growth rate for service providers’ solutions reflects this shift.”
I manage, you manage, we both manage the WAN
A managed SD-WAN service gives the Enterprise all the benefits of an SD-WAN powered network including the agility, resiliency and visibility that differentiated SD-WAN from the previous iterations of VPN technologies. The business gets all the good of SD-WAN but without the additional complexity of having to operate the SD-WAN service platform.
Enterprises want to consume their WAN environment; they want it to be reliable and to deliver the connectivity their business needs. They don’t necessarily want to have to constantly feed and water the network systems that deliver the WAN though; for most Enterprises the network that links their business applications to their business application users is not part of their core business, it’s a utility that enables the business, not the product they create or the service they sell.
So, when it comes to the deployment of an SD-WAN there are a number of options around management including Self-Operate, Self-Manage and Self-Service.
This was the deployment mode for SD-WAN in its early years, that 2014-2016-time frame from the Appledore report above and was primarily driven by what was (or in this case) what wasn’t available in the market; being, a wide range of managed SD-WAN services.
To get SD-WAN the Enterprise engaged directly with SD-WAN vendors and would purchase a dedicated SD-WAN solution for their network. The benefits were total control of how the service was build, matching their business environment however the drawback was the complexity of building, maintaining and operating the SD-WAN core elements (Policy Engine, Controllers etc.) and their IT needs.
The second deployment option emerged with the second wave of SD-WAN, where CSPs and system integrators started to offer a reselling model for vendors SD-WAN solutions. In these cases, the CSP/SI would host the SD-WAN platform, more than likely with a commercial framework that leased the capacity/functionality to the Enterprise (OpEx rather than CapEx). The CSP/SI would operate the platform and ensure that its IT needs were covered whist the Enterprise network team would maintain a controlling position on the management of the service and drive the key network/service architecture around topology, routing protocols and network policy/forwarding rules. In general, these SD-WAN platforms, although hosted for Enterprises by the Service Provider were still dedicated to an individual Enterprise, so had limited economies of scale.
Is the third evolution of SD-WANs, where CSPs have operationalized the SD-WAN platforms fully into their network and support systems and Enterprises are presented with a network service that delivers the WAN environment the business needs. This is similar to the IP-VPN service with one big change, the ability for the customer to perform their own move, adds, change and delete actions on their SD-WAN delivered service.
It’s this third evolution that is gaining the most Enterprise traction and is where the concept of buying SD-WAN as-a-Service or a Network-as-a-Service is finding favor.
With Self-Service the Enterprise can, via the web-portals of the Service Provider, make the moves, adds, changes and deletions their business needs on their WAN in real time. Doing a major financial run on Thursday, well change the network so the finance staff and applications get the highest priority. Or, it’s the end of quarter and there is a push on inbound customer calls, change the network to prioritize the increasing voice calls coming from the customer base and the increased usage of the Enterprise CRM application.
There is another option emerging for Enterprises that CSPs are beginning to offer, a Co-Manage service option as a variant of self-manage.
This is where the operate functions of delivering the SD-WAN platform are fully under the control of the CSP but the manage and service functions are co-owned between the Enterprise and the CSP. The split of functions can be tailored to the needs of the Enterprise and managed by the roles-based user profiles within the multi-tenanted SD-WAN platform.
This allows the CSP to offer the service levels specific to each Enterprise, which can range from a complete service where the customer requests a move, add or change and the CSP performs it on their behalf. Or there could be some shared responsibility, where service operation (topology management such as IP routing configuration) is performed by the CSP and day-to-day operational tasks, such as deploying new branches, changing application priorities or implementing business or security rules on the WAN traffic are the responsibility of the Enterprise.
Part 4 of this blog series can be found here.