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Managed Services Providers Prepare as SD-WAN Hits the Mainstream - #1

Posted by Chris Poupart on May 24, 2018
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This three-part blog series looks at why MSPs need to aggressively engage in the exploding SD-WAN market, ongoing vendor consolidation, the competition from carriers, and how MSPs can partner to reduce their risks while speeding time to market.

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Volatile Market a Rare Opportunity for MSPs

Managed service providers (MSPs) still taking a ‘wait-and-see’ approach with SD-WAN need to get off the fence — now.

Last year IDC reported that the worldwide SD-WAN market was experiencing a compound annual growth rate (CAGR) of 69.6% and would reach $8.05 billion by 2021. According to IDC, while 2017 was characterized by SD-WAN pilots across a small number of sites, rollouts this year are dramatically increasing in both scope and frequency.

Enterprises are racing forward with Digital transformation (DX), leveraging cloud applications, analytics and mobile to innovate and improve business performance. DX can dramatically increase network traffic, and as SD-WAN matures, it’s proving to be an attractive alternative to expensive, MPLS-based wide area networks.

The cost savings of SD-WAN are undeniable. Velocloud, a leading manufacturer of SD-WAN solutions, touts potential savings of three times for SD-WAN over traditional WAN solutions. In a more conservative scenario, Network World’s recently published case study highlighted a global customer who saved 40% and improved bandwidth by 30% after adopting SD-WAN.

More Than Just Cost Savings

While the cost savings are compelling, there are other major benefits to SD-WAN:

  • Fast deployment. SD-WAN utilizes broadband circuits that are much quicker to install and provision than dedicated lines. Deployment speed and simplicity are significant considerations when planning large branch rollouts.
  • Simplified security. Most legacy branch WAN solutions manage security through multiple devices at each branch. With built-in security and encryption capabilities, SD-WAN solutions consolidate and simplify security requirements.
  • Better application performance. Different applications require varying levels of service from the network. While mission-critical applications must be prioritized for speed and reliability, others have less stringent requirements. SD-WAN solutions with dynamic path selection choose the most appropriate network path for specific application traffic, managing congestion to ensure speed and delivery of high-priority traffic.

While SD-WAN is seeing high adoption rates in branch environments, it’s also becoming more commonly used for SaaS applications, backup requirements and voice & video business communications. A recent Network World article claims that ‘SD-WAN will fix business VoIP’ by providing better application prioritization, error correction and dynamic jitter buffering.

Managed service providers should take notice. SD-WAN adoption is rocketing, and if they’re not taking the lead in educating their customers about the benefits, then someone else is.

Next: MSPs in the SD-WAN market face a rapidly changing vendor picture and select competition from the carriers.

Topics: Channel trends, SD-WAN, Insider