SD-WAN is Fast Becoming a Retail Network Necessity

by Greg Griffiths
July 18, 2018

If you’re not already well-acquainted with our recommendations regarding advanced retail networking, it all boils down to this: Any multi-store retailer not already moving to software defined wide area networking (SD-WAN) has some serious catching up to do.

That’s actually true of pretty much every distributed enterprise. The rapid growth in data, apps, and connected “things” all contribute to an escalating thirst for bandwidth to carry traffic destined for the Internet and public clouds.

The entire networking industry is gearing up; DC FutureScape estimates that 60% to 70% of all software, services, and tech spend will be cloud-based by 2020. Yet traditional networks were designed for much simpler demands, connecting to the Internet at headquarters or data center locations through a centralized firewall. Traditional connectivity options can’t handle today’s bandwidth explosion, and centralized firewalls can’t avoid congestion in the face of such new demands.

All of this puts unprecedented stress on the WAN. Consider:

  • A recent survey found that enterprises in general are doubling their bandwidth needs every 18 months. That calls for alternatives to traditional connectivity options, such as T1’s, as their cumbersome deployment makes it difficult to keep up. Additionally, the high cost of connectivity upgrades in traditional networking strains budgets, limiting the amount of bandwidth companies can afford.
  • Alternatives to traditional connectivity must satisfy business needs for uptime. An Aberdeen Group study found that unplanned downtime costs enterprises $260K per hour. The ability to transmit higher volumes of data won’t prove workable if downtime leads to more losses in revenue and productivity.
  • Finally, there’s transparency. A Deloitte survey found 78% of enterprise CIOs are saying they can’t guarantee app performance, leaving them in the dark regarding performance and bandwidth utilization. It’s a guessing game whether adding the next app is the straw that will break the camel’s back. What CIOs need is real-time control to prioritize critical and latency‑sensitive apps.

Enter SD-WAN

Virtually every new technology is created to solve a problem that can no longer be satisfied by older technologies. And every new technology that succeeds in going mainstream does so by proving its ability to satisfy emerging needs in full. That is certainly the case with SD-WAN.

IDC estimates that sales of SD-WAN equipment grew from just $225 million in 2015 to $1.19 billion in 2017, and should reach more than $8 billion by 2021. The reason for such explosive growth: Enterprises are switching to SD-WAN “to resolve challenges created by increasing cloud, mobile, big data and analytics traffic.”

SD-WAN’s success in resolving those challenges stems from three core advantages over traditional connections:

  • 60% improvement in cloud-based application performance
  • 10x bandwidth at half the cost, leveraging broadband
  • Up to 100% uptime guarantee through using multiple, diverse connections

In addition to those inherent advantages, SD-WAN serves as a platform for other network services such  as UCaaS (unified communications as a service); managed network security; and secure, private, dedicated access to cloud service providers, offering a direct connection for payment card processing.

The unique needs of retail

While enterprises in general benefit from the shift to SD-WAN, retail faces several unique dynamics that make adoption especially imperative.

  • Shoppers increasingly expect a unified on-line/off-line experience.
  • Enhancements to the off-line experience that customers most appreciate are primarily network-driven.
  • These dynamics increasingly are reshaping the customer experience.
  • That reshaping is transforming retail at warp speed.

Every retail executive is acutely aware that continuing to do what we’ve always done will no longer do. We’ve seen so many storied brands fade, passed up by more forward‑looking retailers committed to getting ahead of the curve.

Those who succeed do so for a variety of reasons, as no two retail enterprises are exactly the same. But nearly all retailers who are succeeding in the transformation have one thing in common: They embrace advanced networking and all that it enables. If you’re not quite there yet, there’s still time to catch up.