This Industry Viewpoint was contributed by David W Wang
Since SD-WAN started to get traction in the telecom/IT market and industry from 2015-16, as more SD-WAN vendors entering the landscape, every year we’ve had predictions the market would undergo consolidation.
The reality, however, turns out to be that despite some merger & acquisitions (M&As) in this arena, such as Cisco buying Viptela, VMware acquiring VeloCloud, Oracle taking over Talari, to date there are more than 60 SD-WAN technology vendors globally (excluding service providers such as telecom carriers and MSPs), based on Gartner’s research at the start of 2019.
Obviously, vendors are getting crowded for the SD-WAN pie and the expected market consolidation, especially from an organizational perspective, hasn’t really happened in large scale.
The reasons include there are robust demands for SD-WAN solutions although still in absence of industry standards; the bar is relatively low for SD-WAN market entries comparing to the traditional hardware world in terms of Capex, Opex and technology.
Also, nowadays software defined (SD) technologies powered by cloud DevOps, SDN OpenFlow, virtualization, AI and machine learning, etc. are moving forward very fast. For traditional hardware centric M&As, once they happen, companies typically expect advantages from such M&As can last for a while.
But the cycle of today’s software driven innovation becomes shorter than ever, and cloud powered software development can quickly transform new ideas and creativity into innovative technologies and applications. Hence companies may find gains from M&As are shrinking quickly and more difficult to stay in the front of technologies via M&As in the digital era.
Under this situation, I think SD-WAN market consolidation, going forward, would happen more at the technology rather than organization fronts, meaning we will see more technologies come together and emerging alliances to forge industry ecosystems than traditional buy-out between firms or organizations. This might be a better approach to allow all the players to keep up the pace with the fast advancing digital technologies.
We can check on the following three examples along this track.
The first example, as I’ve strongly evangelized since the end of last year, is the trend of SD-WAN from an intelligent and centrally controlled routing solution to becoming a digital transformation (DX) platform, or so-called Software Defined Digital Platform (SD-DP). Disparate solutions such as core and edge cloud access, SD-Data Center, SD-WAN, SD-Security now are being chained together and streamlined to power up SD-DP.
SD-DP helps to reduce complexities and risks for enterprises’ DX ramp-up and allow the client to focus more on application and workload performance for their own business achievements. Today’s API centric microservices make it possible for service vendors to integrate different sub-platforms and forge a heavy-lifting central platform as an DX enabler for the enterprise clients.
The second example is now the enterprise DX markets are calling for some vendor agnostic “single pane of glass” console for the clients to aggregate, monitor and administrate the status and performance of all their digital assets. The status quo is that most SD-WAN and cloud vendors can provide the customer with a single pane of glass but often in a vendor lock-in style, only scoping the display of those services from the vendor in particular.
The original intent of single pane of glass is to simplify multiple services to a unified display for the client. But the current vendor proprietary approach, quite the contrary, leads to multiple displays for the client end (since each vendor offers a different display), and therefore complexity and discrepancy. As a result, the client gets “multi panes of glass” lack of transparency and integration from different vendors they use.
The market really needs a single pane of glass ‘Google”, who is service content and vendor agnostic and can deliver a holistic, real time, user friendly, secured, and easy to update “browser” or display of the client’s entire digital inventory in terms of cloud workload, applications, storage, SD-WAN, security, end devices and IoT, etc. This would make a genuine Single Pane Of Glass for the enterprise clients.
The third example of technology consolidation, is about the interesting news that FlexiWAN, an Israel based SD-WAN startup, recently launched a cloud based “open source architecture” that can integrate third party company solutions and elements such as deep packet inspection, security, network optimization, DevOps tools etc. as part of the SD-WAN offer. It allows an SD-WAN solution customized and differentiated with VNF elements in client’s need for different services. The “open source architecture” makes “modular SD-WAN solutions” possible.
Fundamentally software’s biggest native advantage is open source via open stack, APIs and microservices, unlike hardware that typically comes in closed boxes and is ineffective for interoperability among piles of boxes. From this angle, it’s ironic to see many SD-WAN vendors and their platform today remain somehow proprietary and lock-in. The software industry needs to find a balanced point between trade secrets and open source so as to maximize and release the advantages and benefits of SD solutions.
The prediction is, by the end of the day, those SD solutions with open source structure, integrated platform, and strong aggregating capabilities, will win the technology consolidation and lead the digital transformation in the market.
David W Wang is a Telecom/IT business development & solution enablement principal and senior consultant with ITCom Global, LLC, with current focus on next-gen networking solutions, e.g. SD-WAN, multicloud access, SD-security. Mr. Wang is also the author of the brand new book “Software Defined-WAN for the Digital Age” (published in November 2018) , and the 2015 publishing “Cash In On Cloud Computing”. He is based in Washington DC metro and can be contacted at ITComG18@gmail.com
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