My SD-WAN Predictions for 2018: Taking Stock at the Halfway Point

by Mike Frane
July 19, 2018

At the beginning of this year, I wrote a looking back/looking ahead blog post titled 2017: The year SD-WAN caught fire – get ready for more to come. Seems natural for someone with the job title “Vice President for SD-WAN,” right?

So, how did the looking ahead portion pan out?

In comparing that year-end blog post with what I’ve seen in the first half of 2018, it seems I got much of it right, and some not quite right, with a few surprises popping up. As I always strive to be a technology realist, here’s my updated take on the state of affairs for SD-WAN.

SD-WAN is moving front and center

Consistent with my earlier assessment, all indications are that SD-WAN remains “on fire.” We’re seeing solid increases in new deployments, month-over-month and quarter‑over‑quarter. Those increases are coming across multiple verticals, too. There’s the expected embrace of SD-WAN in retail, healthcare, and finance, with manufacturing, professional services, and pretty much every other vertical market following suit. That means SD-WAN isn’t just gaining—it’s heading toward mainstream status.

But MPLS is far from dead

I didn’t state this in my previous post, but I assumed the ascent of SD-WAN would balance with a march toward the sunsetting of MPLS. Not so! The need for private network connections endures for many enterprises, where MPLS is finding a comfortable home in hybrid networks. Many customers are downsizing their MPLS circuits by perhaps 50 percent, adding broadband and cellular, and implementing SD‑WAN to control it all. That’s one of many aspects where SD-WAN shines: It provides uniform control of diverse connections – while delivering visibility and control that wasn’t possible with straight MPLS.

Approaches to management are diverging

Regarding the best use of SD-WAN’s higher level of visibility, two camps are emerging:

  1. Do-it-yourself
  2. Managed SD-WAN

It doesn’t have to be either-or, and providers have a clear opportunity to provide a “co‑management” bridge between DIY and managed service. All SD-WAN customers can exercise the increased visibility and control to their degree of comfort as they gain hands-on experience. Those who opt to take fewer control actions still retain the ability to jump into the portal when they want to see what’s happening. The Windstream Enterprise solution provides this co-management ability that is really resonating with our customers.

A word about security, which goes hand-in-hand with SD-WAN

SD-WAN security, which goes beyond site-to-site security and data encryption, is top of mind for most buyers. There’s also the need to protect network assets now that more of the network operates over the Internet. There are multiple ways to address this, and it’s really a topic unto itself which I covered here. Bottom line: Software-defined networking (SDN) is infinitely more flexible than legacy models, offering an array of security options that should be reviewed with any SD-WAN vendor under consideration.

Lightweight SD-WAN for SMBs? Not exactly….

Six months ago, I expected to see the near-term emergence of stripped-down versions of SD-WAN for smaller enterprises, which typically don’t need the full set of features and functions in most standard offerings. What we’re actually seeing instead, are vendors of firewalls, load-balancing solutions and more promoting SD-WAN as a new feature of the narrow services they already offered. Rather than the pure SD-WAN technology vendors trying to move into the SMB space, these other vendors are stepping up into SD-WAN. SD-WAN as an enhancement to an existing platform, and not a product unto itself, is what’s emerging instead of “SD-WAN light.” This isn’t to say that every company marketing their capabilities as “SD-WAN” are actually providing SD-WAN, however, and buyers should educate themselves to really understand if it’s SD-WAN or something masquerading as SD-WAN.

Universal CPE is coming, but not as fast as I expected

Another development that isn’t coming along as quickly as I anticipated is the introduction of “white box” or universal CPE. The big hardware companies are moving in that direction, but slowly, mainly due to issues with pricing models and figuring out what it means to be a software company. A company that has been selling a $1,000 solution consisting of $700 in software and $300 for hardware can have a hard time switching to $700 total for an all-software solution – whether or not there is profit in the hardware (as most would say “we aren’t in the hardware business anymore, it’s just a platform to deliver the software”), that $300 shows as top-line revenue. The use cases are out there, but hardware companies will need to approach pricing with a software mindset.

Service providers building their own platforms

On a final note, here’s one development I intentionally skipped over in my previous blog post. We’re hearing a good deal of buzz about service providers building their own SD‑WAN platforms, rather than reselling platforms from third-party vendors. It’s driven by the need to differentiate service offerings, plus the opportunity for tighter integration with cloud provider infrastructure.

As a pathfinder and SD-WAN leader, Windstream Enterprise will continue to differentiate its services to maintain a leadership position. When I’m asked whether Windstream Enterprises plans to develop its own platform, I always say we will do what’s best for the market and for our customers, and that’s the truth. Time will tell where it goes!