Managed SD-WAN Services- Monetizing Connectivity for a Cloud-Connected Enterprise

March 17th, 2017 by · Leave a Comment

This Industry Viewpoint was authored by Nav Chander, Senior Director of Marketing at Silver Peak

In my former role as an industry analyst covering managed services, I advised and interacted with more than 100 leading communication service providers ranging from tier 1 global carriers to tier 3 regional carriers and Multiple Systems Operators (MSOs).

At the beginning of 2016, when I asked service providers about their plans to offer a managed Software-Defined Wide Area Network (SD-WAN) service, there were a relatively small number of service providers that had made a commitment to launch an SD-WAN service. Most of the other service providers were at the early stages of evaluating the SD-WAN technology and use cases.

Nine months later, some service providers, such as Masergy, recognized that SD-WAN offered more than just a disruptive overlay technology, but instead, represented a seismic shift in the traditional managed services business model and one that has the potential to grow revenues and service footprint as it gains momentum with customers.

Fast forward to February 2017 and the heightened awareness amongst enterprise CIOs of the inherent benefits of SD-WAN which include the favorable economics of commodity broadband in a hybrid WAN network, connecting users to applications on any network, from anywhere or from any device.

Many CIO’s recognize that SD-WAN presents an opportunity to dramatically simplify their WANs and rethink the way their networks are deployed, managed and delivered. CIOs are also evaluating a lower cost “thin branch” strategy that will consolidate multiple WAN functions such as routing, firewall and WAN optimization into a single appliance, while also improving application performance in a hybrid cloud-connected environment.

Enterprises are as likely to consider employing a managed SD-WAN service from a service provider, one that can bring given their deep expertise and the economies of scale to deliver a hybrid WAN solution. An SD-WAN also enables service providers to more easily use any combination of private MPLS or broadband or 4G LTE connectivity, to deliver a superior user experience edge-to-edge across hybrid environments.

Another often overlooked benefit of an SD-WAN solution is the opportunity to use the integrated intelligence policy engines to dynamically optimize connectivity of cloud applications, both IaaS and SaaS for any type of branch location.

Both enterprises and managed service providers are trying to keep pace with the accelerating migration of applications to both public and private cloud services. Traditional MPLS solutions have worked well in the legacy environments of data center-branch architectures, but are not well suited to connect to the latest SaaS application without significant re-engineering and added cost to both the service provider and enterprise.

Additionally, a managed SD-WAN service also supports a broad range of managed Cloud Connect services and enables service providers to enhance their managed cloud-based services, spanning existing managed cloud-based VoIP or cloud-based UC services or new services for cloud IaaS and SaaS delivered on top of the SD-WAN solution.

Service providers may partner with cloud service providers to offer an integrated high-performance managed SD-WAN & cloud connect OTT services solution. Combining SD-WANs with cloud services presents service providers with new revenue opportunities and better network alignment with the changing cloud and hybrid IT requirements of geographically distributed enterprises.

Differentiation of a managed SD-WAN service must include the ability to offer tiered SLAs for a range of SD-WAN services, the capability of offering higher performance over underlays and even WAN acceleration for certain use cases. Finally, one of the most important requirements for a differentiated managed SD-WAN service, is providing the highest availability service connecting enterprise users to business-grade SaaS applications, regardless of the network environment.

In 2017, we can expect to see a shift in service providers that focus on delivering high performance and high availability managed SD-WAN service with SLAs over any transport, including cloud connectivity. A best-efforts SD-WAN service may not support enterprise users demands for high availability and low latency for all of their business applications.  An application SLA-enabled managed SD-WAN service offers an opportunity for service providers to sell a differentiated, higher margin service over time.

A well-developed SD-WAN strategy can lead to new revenue and a win-win proposition for service providers.  Don’t overlook the flexibility and opportunity to deliver higher levels of customer satisfaction by leveraging the service automation of a managed SD-WAN, which will deliver faster-time-to-market results.



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Categories: Industry Viewpoint · Managed Services · SDN

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