Riding The SD-WAN Rocket Ship


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As a commercial pilot in his free time, QOS Networks CEO Frank Cittadino knows well the kick you get from the rapid rise of a plane taking off into the stratosphere.

It's the same kind of feeling he gets piloting the 10-year-old solution provider to off-the-charts sales growth by helping customers take advantage of ground-breaking SD-WAN technology solutions.

This year, Cittadino is projecting SD-WAN sales to skyrocket a mind-boggling 700 percent at Irvine, Calif.-based QOS Networks, which is implementing 500 to 1,000 SD-WAN installations a month, up from just 100 sites a month a few years ago.

That rocket-like growth is being driven by what Cittadino calls a technology that has $50 billion-plus carrier and network behemoths pivoting quickly to play in a market that is literally tearing apart the old world of monolithic MPLS networks and routers.

"SD-WAN is completely changing the way businesses operate," said Cittadino. "We're automating the network function, removing the complexity of expensive engineers, connecting to anywhere in the world -- to any data center that can take a VPN tunnel with a click of a button. So ­flexibility is gained. Pricing goes way down. It turns from a capital expense to an operating expense and allows virtualized technologies to drive the performance."

One example: a national fitness center that took advantage of the VMware VeloCloud solution from QOS Networks to avoid MPLS implementation and reconfiguration costs that would have exceeded $430,000 compared with a VeloCloud SD-WAN solution priced at just $75,000. That customer is saving $20,000 per month in networking costs alone, said Cittadino.

"They needed a lower-cost, lighter-footprint solution that would be able to connect them to the cloud," said Cittadino. "They needed to drive hosted phones and cloud workloads nationally, but not have a heavy footprint because these are low-volume stores. We were able to come in with one device and deliver Wi-Fi, switching, routing capabilities, and connect them to the cloud directly."

Research firm IDC estimates that worldwide SD-WAN infrastructure and services revenue will grow 70 percent annually, reaching more than $8 billion in 2021. Research ‑firm Gartner, meanwhile, said that by the end of 2019, 30 percent of enterprises will have deployed SD-WAN technology in their branches, up from less than 1 percent in 2015. Vendors generated $444 million in revenue from SD-WAN appliances and management software sales in 2017, up nearly 400 percent compared with 2016, according to data from research firm IHS Markit.

Solution providers are calling SD-WAN the biggest driver of sales since VMware took the market by storm, teaming with partners on the server virtualization boom that reshaped the technology landscape in the mid-2000s.

"Regardless of the layer of the network, SD-WAN is top of mind," said Robert Auci, vice president of global channel marketing at Cradlepoint, a Boise, Idaho, routing provider that early this year pivoted to an SD-WAN-based strategy. "It's not just for the edge. It's pervasive all the way down to the other layers of the network. Layer zero, layer one. The very bones of the network are being controlled via SD-WAN."

Cradlepoint is one of a pack of legacy technology providers, including Aerohive, Juniper Networks and Riverbed Technology, that are racing to provide SD-WAN offerings with partners. That's on top of the offerings from pure-play SD-WAN providers like Aryaka, Silver Peak and Talari.

The most visible moves, of course, have come from Cisco Systems and VMware. Cisco made its blockbuster acquisition of SD-WAN highfl­ier Viptela last August, representing its push into more complex enterprise environments, as the company already offered Cisco Meraki for the branch office. VMware, meanwhile, bought SD-WAN powerhouse VeloCloud last December. Also in the mix is Aruba, a Hewlett Packard Enterprise company, which plans to launch an SD-WAN offering later this year.

Dell Technologies founder and CEO Michael Dell told CRN that the acquisition of VeloCloud was a move to make the infrastructure giant No. 1 in the fast-growing market.

"If you think about all these multi-location businesses, [SD-WAN] is going to be a big growth area," Dell said.

The move into the market by these legacy networking market leaders is just one more sign that it is prime time for SD-WAN.

Calgary, Alberta-based Long View Systems is saving one of its national retail customers nearly $500,000 in annual costs after deploying Cisco's Meraki SD-WAN offering, cutting the customer's IT expenses by roughly 60 percent. The savings stem from less-costly MPLS network circuits and a reduction in the number of personnel required to manage the infrastructure, according to Michael Thomaschewski, chief technology officer at Long View.

"Everybody is looking to drive cost out of their business. Where service providers were once their only option, now they're not," said Thomaschewski. "SD-WAN allows you to template how you push that WAN architecture out to different locations. It allowed us to not only centralize the management but standardize the configurations and deploy them remotely with zero touch... It's really going to disrupt those carrier providers that are out there today offering MPLSes and dedicated circuits."

To combat that disruption, telecom carriers also are scrambling to provide SD-WAN. AT&T formed SD-WAN partnerships in 2017 with vendors including VeloCloud and now offers its SD-WAN service in over 150 countries. Verizon similarly partnered with SD-WAN vendors Versa Networks and Viptela last year as demand for managed SD-WAN services skyrockets.

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