The massive wave of public cloud adoption has placed SD-WANs, or Software Defined Wide Area Networks, firmly in the spotlight. The advances made in cloud technology by leaders like Microsoft, Google, and Amazon have made it easy and cost-effective for enterprises to move away from their traditional datacenters and adopt cloud. While cloudification is moving applications to a central location, users are now distributed across geos. A recent analyst study shows that 32% of IT budgets will be allocated to cloud within the next 12 months1. An imperative of public cloud is to have a secure, application-aware, intent-based network. And SD-WAN is the answer. As investments in public cloud grow, we expect to see a proportionate increase of interest in SD-WAN.
Traditional WANs worked using one or two gateways and expensive Multiprotocol Label Switching (MPLS) networks and complex security policies to keep the enterprise connected. This made connecting branch offices an expensive exercise—more hardware had to be added, more security processes monitored, and more infrastructure maintenance to be provisioned. Besides, traditional WANs demand long lead times to set up new branches and they require traffic to be backhauled through a datacenter which often became bottlenecks. For the last decade, service providers like British Telecom, Telstra, Deutsche Telekom, Movistar, Vodafone, AT&T, and Jio provided the services needed for these WAN networks. But because MPLS is expensive, it became one of the reasons for enterprises to move away and look for more reliable Internet-based networks.
SD-WANs for geographically spread-out businesses
SD-WANs take the pain out of network configuration and operations while reducing capital and operational expenditure. They make use of high-speed busines class Internet and local Internet breakout to send traffic toward cloud. This also means it has a major impact on the network business of traditional providers. Their customers increase bandwidth usage because they have access to bigger pipes at lower costs on the Internet. This also has the effect of reducing the costs associated with MPLS. Overall, it is a major win for enterprises.
There are deeper problems associated with using traditional provides. As businesses expand across geos, providers with a limited footprint may not be able to support their customers. For example, a provider may have strong operations across the US but none in Europe. To overcome this, providers partner with each other across geographies. There is a downside to this. It makes client contracts, processes, and provisioning complex, messy, and expensive.
Take the case of Europe. Each country has its own dominant network provider. They know their region, understand the underlying business nuances, and are very aggressive. An engineering, manufacturing or pharma company with operations spread across Europe will typically want to realize the cost benefits offered by network providers in each region. As an example, they will want to pick the best provider at the best price point. Having multiple and diversified providers across countries can quickly add to technological complexity, management overheads, and developmental blind spots.
These developments have led to a clear outcome: Unable to compete with local providers, the behemoths of telecom find that bandwidth consumption is down, and they cannot modernize services to retain customers. They have no incentive left to continue providing network services. This has opened the doors to System Integrators (SIs).
The importance of SIs in the world of SD-WAN
SI can break the barriers to a single provider while ensuring that the advantage of lower pricing provided by multiple geo-specific providers is not lost. SIs can tie together the best-of-breed providers, manage contracts, drive technological enhancements, and ensure that network experience remains world-class while costs are managed in line with customer expectations.
Given the pressure brought about by the COVID-19 pandemic, businesses across Europe – as is true for businesses across the world – have become cost conscious. There is significant pressure on them to reduce run budgets. A quick and effective way to do this is by moving to a well thought out and carefully strategized SD-WAN paradigm.
On paper SD-WAN appears perfect and has appeal. But enterprises are hesitant to take the leap. There is an inherent fear that their users may not have access to the same experience they have become accustomed to. Unlike a datacenter, that could be in one or two locations and are easy to monitor, an SD-WAN may affect users. This fear prevents enterprises from discussing SD-WANs with SIs.
For effective implementation of SD-WAN, CTOs across enterprises must identify business uses cases that bring value and have the highest/ fastest ROI. Does it reduce costs? Does it provide visibility into applications? Does it allow administrators to prioritize traffic based on application criticality? Does it improve user experience? Does it have lower maintenance costs? Does it enhance agility and security? Does it permit automation to be used to speed up configuration, deployments and reporting? The answers to these questions will determine the exact solution.
Learning from adjacent industries
The experience of large, diversified customers who have made the call (for SD-WAN) shows that the technology provides robust and reliable solutions to resolve these questions. One customer, a manufacturing major in over 1500 locations, has modernized its network using SD-WAN.
We need to examine industry segments like Retail and Consumer Packaged Goods leading the way with public cloud adoption. They are successfully choosing SD-WAN. The Banking industry too has identified significant opportunities in public cloud and will soon shift to SD-WANs. Typically, businesses with a large multi-geo e-business component are more enthusiastic about public cloud – these are the businesses to look up to for best practices and methodologies that lead to successful SD-WAN adoption.
With large technology providers like Microsoft, Amazon, and Google making it simpler to adopt public cloud, SD-WAN is unavoidable. And for businesses in Europe, characterized by a variety of network providers, getting an experienced SI onboard to implement the SD-WAN strategy is an immediate imperative.