What is the industry definition of SD-WAN?

SD-WAN is a key technology to help enterprises transform their networks from fragile to agile. We believe that SD-WAN will best address enterprise requirements for coming years, as it provides the best mix of performance, price and flexibility compared to alternative hardware-centric approaches.

Market Definition & Overview

Definition

WAN edge infrastructure is an industry that enables network connectivity from distributed business and enterprise locations to access resources in both private and public data centers as well as cloud (as a service).

This market has evolved from traditional branch routers (often called "customer edge routers" in a Multiprotocol Label Switching MPLS implementation), and is undergoing dramatic changes, driven by the needs of digital business transformation and the demands set by an ever transforming business landscape.

This market transition has seen an influx of incumbent and emerging vendors from multiple markets (routing, security, WAN optimization, SD-WAN), each bringing their own differentiators and limitations.

The market for branch office wide-area network functionality is shifting from dedicated routing, security and WAN optimization appliances to feature-rich SD-WAN solutions. WAN edge infrastructure now incorporates a widening set of network functions, including secure routers, firewalls, SD-WAN, WAN path control and WAN optimization, along with more traditional routing functionality.

Overview

This dynamic market with emerging client needs has created a deeply fragmented vendor landscape, with both large established vendors and smaller providers from multiple segments competing for deals.

Differentiation between competitors are mainly feature-based and business-model-based (pure subscription and WAN as a service using proprietary technologies). Some vendors focus on feature depth, while others choose an "all in one offering" approach. Scale of deployment and the ability to support complex environments remain differentiators at the high end of the market, where some customers require deployments upward of a thousand branches.

Characteristics of the SD-WAN Market

Typical business outcomes

The fundamental business outcome is connectivity between enterprise users, applications and services that reside in distributed locations. Locations include headquarters, branches, corporate data centers, collocation/hosting facilities and cloud providers. Increasingly, buyers require improved agility, automation, flexibility, and application visibility and control, while significantly reducing operational complexity and time to manage the WAN environment.

Market

WAN edge infrastructure provides network functions that support connectivity for distributed locations (typically branches). This market includes functionality such as routers, secure routers, firewalls, WOCs, WAN path controllers and SD-WAN.

Typical buyers

Within the enterprise, CIOs, CTOs, CEOs, technical directors, and network and telecom managers are typically the buyers of WAN edge infrastructure. Branch managers as well as enterprise architects can be strong influencers in larger enterprises; so can customers.

How buyers shape their buying decisions

When selecting WAN edge infrastructure, buyers typically focus on several factors including feature/functionality, price, performance, form factor, deployment options, ease of management, visibility/analytics, customer support/experience, overall product architecture, vendor incumbency and familiarity. Current decisions are strongly influenced by changing traffic patterns impacting the enterprise WAN.

Deliverables

The primary deliverables include network functions that enable connectivity for users at branches. Typical network functions include edge routing, secure routing and VPN, WAN optimization, WAN path control, and SD-WAN. These functions can be delivered to the enterprise as dedicated hardware appliances (such as a router, WOC, gateway, SD-WAN edge-device) or as a software instance of these functions (a VNF). The appliance may reside at the customer premises, in provider POPs or as a network-based/cloud service.

How providers package, market and deliver

Buyers typically source their WAN edge products either directly from network equipment suppliers, or via a network or managed service provider (that is, as a managed service). WAN edge infrastructure can be procured via purchase, lease, subscription or consumption-based pricing models. Further, there is a diverse set of deployment options for these networking functions, including via hardware appliances, software (VNF) or cloud-based services.

Market Drivers

The WAN edge market is primarily driven by five factors:

1. Refresh of existing branch office networking equipment that is at its technological or support limits.
2. Renewal of NSP or managed service contracts, where a new service provider also means new equipment.
3. The changing traffic patterns resulting from the increasing use of cloud based resources, which renders the traditional hub-and-spoke WAN architecture obsolete.
4. The expansion of capacity (i.e., physical build-outs) within existing locations
5. The desire to increase agility and automation in order to address the needs of digital business transformation and to lower operational expenses (and maybe the growing realization that WAN operations do not need to be the burdensome operational burden of the past).