Global WAN Competition Alarms for the Telcos

This Industry Viewpoint was authored by David W Wang

Recently there came some alarms for the major telcos about the global Wide Area Network (WAN) market dynamics. That is, some cloud hyperscalers like Google and Cloudflare are entering the global WAN infrastructure and access market.

Cloudflare just announced the launch of its Network as a Service (NaaS) named Magic WAN & Magic Firewall. The firm will partner with SD-WAN vendors VMware and Aruba, whose SD-WAN appliances can be configured to direct traffic to a Cloudflare global PoP and then ride on its massive private backbone.

Another announcement is that Google has expanded its relationship with Cisco to automate the provisioning of WAN links over Google’s global private backbone network, which can be called a Software defined underlay.

As the WAN technologies are transforming from MPLS to SD-WAN/SASE, we know that regional/national vs. global SD-WAN/SASE may have different flavors especially in terms of the underlay network.

In developed countries like the US, UK, Canada, Western Europe, Japan, Singapore, etc., the public Internet backbone and access are robust and reliable enough to support SD-WAN/SASE overlay in country services.

On the other hand, in deploying SD-WAN/SASE with global sites, the underlay network via the public Internet can often become a challenge considering performance, management, and maintenance, because each region and country may vary in Internet traffic quality, security and network bottlenecks.

To date, the alternative underlay solution is to use some private backbones like major telco’s incumbent MPLS network, or new SD-WAN centric vendors such as Aryaka and Cato Networks build up own private global underlay.

Now when Google and Cloudflare start to make their cloud global backbones available as SD-WAN/SASE underlay, this creates three major impacts to the WAN infrastructure and edge segment.

First, to legacy telcos like AT&T, Verizon, NTT, Orange, BT, Tata, etc., Google and Cloudflare are offering the enterprises with essentially a SD underlay built on the company’s global private backbone network and designed to replace slow, hardware centric, and expensive MPLS connections. With both SD underlay and overlay network in synch, it provides a single dashboard for provisioning and managing VPN tunnels and SD-WAN interconnects.

To those SD-WAN vendors like Aryaka and Cato Networks, although they have similar global backbones assembled in place, from the economy of scale standpoints, they may hardly be able to compete with these cloud hyperscalers. In other words, the cloud backbone network enables Cisco, VMware and Aruba to make more attractive and cost-effective offers to MNEs (multinational enterprises) for global SD-WAN/SASE deployment.  

Second, the cloud architecture as underlay offers a lot more than traditional telco network architecture. This will better serve today’s enterprise needs for application specific performance, policy-based routing, multi cloud access, edge required low latency, access anywhere, network scalability, security, and central management.

Using Google as an example, its cloud private backbone covers 25 regions globally, with massive data centers in critical locations in each region. The company also has close to 200 edge locations for service complementary and redundancy purpose as the boundary of the network.  

Plus, Google owns the so called “next level of distribution” or edge cloud. These are almost 3,000 locations worldwide that are in either an operator facility, or in some other facility than Google’s own PoPs. The notion is those locations are used to store some of the cloud infrastructure, most notably caching and storage services needed for traffic such as video downloads that enterprises or consumers may want to access.

Third, Google and Cloudflare’s recent moves bring the global WAN infrastructure and edge even closer to cloud native operations and integrations. Cisco SD-WAN users can now take advantage of Google network to not only automate the process of connecting branches to workloads but to remote branches as well. The service not only simplifies WAN deployments but provides greater security, visibility and analytics into the traffic traversing the network.

Similarly, In Cloudflare’s case, via the NaaS format, enterprise users don’t have to rely on a telco or MSP to manage their WAN links.  Instead, they can just go into a UI and set up branch office connects, firewall rules, application links and Internet access etc. over a single pane of glass. Its Magic Firewall can address users’ SASE needs as well.

In a nutshell, such next gen cloud network is able to offer much of the flexibility of routing traffic over the internet, seamless cloud workload integration, while delivering reliability and security at similar MPLS SLA but at a much lower cost.

This will disrupt the global WAN landscape and market. It’s expected that the cloud hyperscalers joining force with SD WAN vendors can help boost the large enterprise SD-WAN/SASE DIY model, and grab more market shares away from telcos and smaller SD-WAN vendors.

David W Wang is a next-gen network/cloud business marketing principal and consultant with ITCom Global, LLC. Mr. Wang is also the author of the Nov 2018 publishing “Software Defined-WAN for the Digital Age” , and the Mar 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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Categories: Cloud Computing · Industry Viewpoint · SDN