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

Solution providers who only sell SD-WAN as a cheaper MPLS may miss the bigger picture of what's possible when network traffic is more intelligently provisioned based on network costs, application needs and user demands.

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).


Channel partners are evolving away from providing connectivity only, or "pushing boxes," and that transformation is opening the door to more management and enablement opportunities, he said.

"If you're an SD-WAN player and you're not offering at least half of what [customers] spend in the circuit infrastructure at least, then you're not doing a service," Prabagaran said.

Because SD-WAN is freeing up budget and presenting new revenue opportunities for solution providers, it's counteracting any revenue loss partners would have seen on private bandwidth purchases, said Sanjay Uppal, CEO and co-founder of VeloCloud.

Talari Networks, a 10-year old networking vendor that specializes in WAN management, has several channel partners that are providing managed services for boating and cruise ship companies. Boats and ships have traditionally relied on expensive satellite links while out to sea, and then LTE connections as the ship gets closer to port. The ability to toggle between bandwidth sources on the fly without impacting users is important, said John Dickey, president, CTO, and co-founder of San Jose, Calif.-based Talari Networks.

Using SD-WAN, these customers can rely on less expensive connectivity options. Additionally, these customers have the opportunity to turn a profit by charging a premium for special bandwidth reliability to cruise ship guests, Dickey said. At the same time, partners can better adjust and scale their customers' bandwidth needs up and down during and after peak use times for even more cost savings.

"Let's say the ship has some peak times -- let's say everyone in the morning needs to access emails more often than anything else. Well, then they'll turn on all the networks, including the satellite," he explained. "This is technology [that] a partner never had before, and at the same time, the end users get a better service."

QOS Consulting is an El Segundo, Calif.-based based solution provider that has been selling SD-WAN solutions to its base of enterprise customers. Today, QOS Consulting partners with several providers but sees the most traction with VeloCloud's offerings, said Frank Cittadino, CEO of QOS Consulting.

The solution provider is saving its customers money on hardware because it can consolidate the number of physical appliances a customer needs, like routers and firewalls, by virtualizing network functions on VeloCloud's SD-WAN platform. QOS Consulting is also saving its customer's money on MPLS, and can scale customers' bandwidth up and down so they don't have to pay for full capacity all the time. However, saving money on connectivity isn't the primary reason for an SD-WAN sale, he said.

"During peak times, the application becomes highly available so we are really switching from selling network services to experiences and value," Cittadino said. "We can help businesses make more money – so its whole different conversation than just saving money on MPLS."


For QOS Consulting, SD-WAN has "unleashed" a new set of sales opportunities for the company, and the technology is enabling brand-new use cases for its customer base, which has between 25 to north of 2,500 disparate office locations, Cittadino said.

"With an application-defined network, we can really drive really high-performing networking and sell experience – not just connectivity. We can make the pipes more efficient and also add capacity to the network," he said.

At the same time, SD-WAN isn't squeezing carriers and partners of their MPLS revenues, VeloCloud's Uppal said. In fact, the technology is letting customers make better use of their MPLS links and add more capacity, more quickly.

"In the aggregate, [MPLS] revenues are actually going up, which may be not intuitive, but that's what happens is that you get more sites deployed faster," Uppal said. "It's only in certain cases where you lose the private networking bandwidth … so it's not the conventional wisdom of, 'this ROI model is only built on MPLS arbitrates.' That's not the case at all."

The best part of including SD-WAN into the overall solution for an end customer is the new services that can be enabled as a result of the flexible, hybrid networking approach that SD-WAN facilitates, CloudGenix's Ramachandran said.

Partners can use software-based SD-WAN platforms to bring more best of breed services into a customer's environment, and ultimately fulfill the role of trusted advisor to their end customers. That, Ramachandran said, is the power of the channel.

"I think [SD-WAN] is a huge opportunity for channel partners both to save money for their customers and add more value to services," he said. "It's one of those rare cases where it's truly a win-win all around for most vendors."

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