What Are the Components of an SD-WAN?
This week, Futuriom will be releasing our second annual software-defined wide-area-networking (SD-WAN) Growth report. So it's a good time to look at exactly what's in an SD-WAN and why the market is growing fast.
SD-WANs are a new form of corporate connectivity, designed to adapt to modern IT practices and the connections to the cloud. In the past, corporations built their own WANs using proprietary hardware and service-provider network connections among data centers, but that's all changing. Applications are moving to the cloud and Internet broadband costs are declining, paving the way to create virtual WANs that are tied together to leverage Internet broadband using software and commodity off-the-shelf hardware (COTS).
But what exactly is an SD-WAN used for and what does it include? Let's go over some of the components.
SD-WAN for Router Replacement
Technology professionals like to talk about “use cases” for emerging technology. These are useful references points for why a technology will be purchased or implemented, though they are not the end-all or be-all.
The SD-WAN market contains many use cases and features that are appealing to different enterprise and service providers. Many of the SD-WAN vendors and managed service providers are focusing on specific niches. For that reason, we have tried to highlight some of the specific requirements and features being sought by specific customers.
One of the more popular functions of SD-WAN is router replacement or router consolidation. One of the higher costs of WAN frequently cited by enterprise customers is the operating expense (opex) of managing proprietary hardware and customer premises equipment (CPE), including branch-office routers. For example, if you have a load of Cisco gear, it might require having a Cisco Certified Internetwork Engineer (CCIE). Not only is managing proprietary routers complicated, but it also introduces potential errors and complexities in building and managing the network as the proprietary gear is configured. In addition, hiring certified specialists to manage these branch-office routers is expensive.
Therefore, many enterprises are looking to simplify the way their branches and offices connect. One way to look at at consolidating operations and reducing costs is to replace proprietary routers with open, SD-WAN-based CPE, which can be programmed from the cloud.
Almost all the major SD-WAN players deliver an SD-WAN based CPE from the cloud. And this was a major driver for Cisco to purchase SD-WAN startup Viptela, which was competing with Cisco routers by shipping cloud-manage CPE.
SD-WAN Security Functions
Another allure of SD-WAN technology is that it can be used to deploy security functions such as virtual private network (VPN) as a software overlay using end-to-end encryption. This helps meet security requirements for businesses that may want to connect branch offices or retail outlets but also have high security requirements.
SD-WANs, because they are virtual networks controlled from the cloud, also have the flexibility to plug in additional security functions without specialized hardware. Value-added security services such as stronger encryption and intrusion detection services (IDS) can be offered by the SD-WAN providers. This can be a matter of debate, as some SD-WAN providers believe some security services, such as unified threat management (UTM), need to be distributed to the cloud, due to the compute power necessary, as Cato Networks argues. There is a wide variety of approaches in how security functions run in an SD-WAN, whether they are hosted on an appliance or in the cloud.
The New WAN Optimization
It's no coincidence that many of the emerging SD-WAN players emerged from the WAN optimization market. WAN optimization technology was introduced as a way to maximize WAN bandwidth connections. Now that SD-WAN has emerged as a way to plug in addition features into integrated SD-WAN platform that also includes WAN optimization. This is a path followed by Silver Peak, which has led many WAN optimization players in its transition to SD-WAN.
Most networking functions started as discrete software and hardware appliances and are now being integrated with SD-WAN services and solutions. One of the goals of customers of SD-WAN products is to streamline their edge equipment and software into a single SD-WAN management platform. WAN optimization emerged when network appliance vendors added special software and hardware that could increase the efficiency of WAN links using techniques such protocol acceleration, compression, and de-duplication of data. Many SD-WAN technologies include WAN optimization functionality and we expect this to be a checklist item in SD-WAN deployments.
Application Performance Improvement
Another important function that can be included in the SD-WAN environment is optimizing applications to the network and enhancing access to cloud applications.
For example, if you are managing a corporate WAN, you would want business applications ahead of leisure services such as Netflix and YouTube. Additionally, many WAN services can peer directly with cloud services to offer a “fast lane” to the business applications. These techniques can be used to "offload" enterprise WAN backhaul, routing cloud traffic directly to the source using a combination of broadband technologies. Many SD-WAN vendors, including Aryaka Networks, Fatpipe, Silver Peak, and Versa Networks, have focused on delivering applications acceleration and optimization in an SD-WAN environment.
Remote Connectivity
One of the key features of many SD-WAN services is the ability to aggregate and load-balance broadband links, such as combining mobile broadband, fiber, DSL, and/or cable. As broadband technologies proliferate and point-to-point 5G becomes a reality, this will help to maximize resources and build a more mission-critical WAN. In addition, SD-WAN solutions can be used to optimize cloud connectivity using mobile connections. Examples might include the Internet of Things (IoT), whereby a retail kiosk or a commercial truck is connected to the corporate WAN using mobile connectivity, whether that be cellular or through other flavors of WAN (such as WiFi or LoRa).
Specialized SD-WAN vendors such as Cato and Cradlepoint have focused on the importance of integrating mobile connections. Other SD-WAN players, including Fatpipe and VMware's VeloCloud, were early to emphasize the benefit of link balancing.
Network as a Service
Many enterprises don't even want to build or manage the WAN, but they also want something better than plain-vanilla Internet. In this case, they can go to network-as-a-service (NaaS) providers who can provide software that aggregates existing broadband services into an SD-WAN that is managed by the service provider.
In a NaaS model, customers can provision and operate the WAN using a provisioning and management system provided with a Web interface, and they avoid the costly process of managing and configuring hardware, because the hardware is provided by the service provider and managed using SD-WAN software. Aryaka and Cato are the notable SD-WAN NaaS providers in the market that operate their own private networks for clients. VeloCloud has a hybrid NaaS model, meaning that although it doesn’t own its own network, it maintains service-provider gateways and sells its service as a NaaS. TELoIP also has its own POPs and is selling as a service.
MPLS Replacement
As with any big technology trend, the driver is often money. That is certainly the case with SD-WAN, which has been used to target the replacement of Multiprotocoll Label Switching (MPLS) networks.
MPLS was invented and standardized by the Internet routing community, driven by equipment suppliers such as router vendors that wanted a better way to deliver Quality of Service (Qos) using IP-based technologies. By introducing MPLS, service providers and enterprises were able to build secure, "fast lanes" to enable business services such as high-performance WAN circuits and virtual private networks (VPNs) -- secure, high performance private connections.
But MPLS is considered very expensive -- it can cost as much as 50X to 100X as much as a comparable sized pipe on Internet broadband. SD-WAN technology is being used to take plain Internet broadband pipes, secure them, and optimize bandwidth for applications to deliver an MPLS-like experience at a fraction of the cost. End users regularly tell Futuriom that is the main benefit for them to move from MPLS to SD-WAN.
Why SD-WAN Will Continue to Grow
You may now get the picture -- there are many functions and use cases for SD-WAN technology that can deliver a direct return on investment (ROI).
Whether an enterprise is looking to reduce the cost of opex by replacing proprietary routers, save network costs by replacing or augmenting MPLS, and just move to a more modern platform that yields more flexibility, it's clear that SD-WAN is one of the hottest markets in technology. It has also driven incumbent network players such as Cisco and VMware to make big-ticket acquisitions to get ahead of the curve.
Futuriom believes the market for SD-WAN technology is billions of dollars and growing fast for many reasons because of this wide array of use cases and market drivers.
Growth in the SD-WAN market is now accelerating. Learn about why this market will grow to billions of dollars in the next few years and which companies will benefit. Futuriom's premium SD-WAN Growth Outlook is available. Use "FOFU" code for a 10 percent discount.
