The Promise Of SD-WAN: MPLS Savings And Bandwidth Delivery That Fits The Business Need

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Solution providers touting SD-WAN as simply a cheaper alternative to costly MPLS connections will be missing the boat, according to the sectors leading vendors.

There's no arguing that one of SD-WAN's benefits include cost savings, but most customers will love SD-WAN more for enabling a more dynamic network, while giving application reliability a boost, according to a recent panel of SD-WAN startups and networking vendors.

"I think we'll be doing a disservice to our customers and channel partners if the message that we [give] is that ROI [for SD-WAN] is coming from MPLS cost savings alone," said Kumar Ramachandran, CEO of CloudGenix, during an SD-WAN roundtable held by CRN's parent company, The Channel Company.

[The Software-Defined Wave: CRN's 2017 SD-WAN Roundtable]  

SD-WAN, arguably one of the IT industry's hottest technologies, replaces traditional branch routers and applies rules to route different traffic types over disparate networks. In the past, an enterprise might use a single MPLS connection to handle all of its branch office traffic. Now, it can mix different types of connections and choose the most efficient route based on what the traffic is, where it's headed, and what connection capacity is available. A company could use SD-WAN to, for instance, offload internet-bound traffic on regular broadband connections, directly connect to public cloud providers via VPNs and send latency-sensitive traffic over an existing MPLS connection.  

Used correctly in a big enough corporate environment, SD-WAN could save enterprise customers millions of dollars in connectivity costs a year.

Versa Networks, a Santa Clara, Calif.-based SD-WAN that got its start in 2012, is saving one 500-site customer between $11 million and $12 million in connectivity costs using its SD-WAN solution, according to Kelly Ahuja, Versa Networks' CEO.

To pull off what that customer wanted to accomplish, capacity expenses without using SD-WAN would have cost "millions" more than what the customer is paying today, Ahuja said. The customer instead opted for a hybrid internet connectivity approach, implemented by a Versa partner.

In the end, the customer wasn't the only beneficiary of the solution, he said.

"This was a managed service offering where the [partner] could actually attach a device and manage the whole service for the end customer, not just sell MPLS," Ahuja said. "And, they were able to do that for a lot less."

By saving customers money on MPLS, solution providers implementing SD-WAN that can help free up customers' IT budgets. The savings can be used on additional services, and that's the area where partners are really bringing value to their customer relationships, said Ramesh Prabagaran, senior director of product management for Cisco. (Prabagaran was the vice president of product management and marketing for Viptela before Cisco bought the SD-WAN startup in August).

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