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Roundtable: The challenges and opportunities of SD-WAN
In the first part of our coverage of the MicroScope roundtable on SD-WAN, the speakers scope out the market and the opportunity for the channel
MicroScope gathered together a group of vendor representatives to discuss demand for software-defined networking and how to pitch it to customers
There has been a lot of talk about software-defined wide area networking (SD-WAN) and the channel is now making money from the technology. There are still challenges to overcome, however, both for vendors and their partners. These range from how to pitch the offering to ensuring it is implemented correctly.
But demand for software-defined networking is expected to increase, and attendees at a recent MicroScope roundtable – chaired by Zeus Kerravala, founder and principal analyst at ZK Research – spoke about the steps they are taking to make sure their channel is in a position to take advantage of that growth.
In part one of our report, we gauge the demand for the technology and just how it should be pitched to customers.
Q. Where are we with the adoption of SD-WAN? TechTarget research shows that 26% of companies have it in play today – do you think that number is accurate?
Mike Wilkinson: Last summer, I did some work with a consultancy company, looking at how many channels were carrying an SD-WAN product. We surveyed 650 channels in the UK, of which only 5% were carrying an SD-WAN product of any type. That tells me we are very much in the early adopter phase from a channel perspective. Whether that translates from a user perspective, you will probably find there will be DIY projects in larger enterprises that might not be using the channel. But channels today focused on selling voice, data and UCaaS [unified communications as a service] solutions are relatively unaware of what SD-WAN is, hence missing out on monetisation opportunities. I have been to a few channel events and most attendees didn’t really know about it. So there is a need for a huge amount of education in the market to get the channel to understand what problems SD-WAN fixes and the potential use cases. They understand customer issues and they need to translate that back to problems that the technology can solve.
Frank Lyonnet: DIY is probably a key word here. What I have been seeing is a lot of customers that want to understand what SD-WAN is and they have had to increase their knowledge of it by themselves because the channel is not ready and the service providers are coming with their own stance, which is not necessarily going in the direction of delivering the full benefits of SD-WAN.
There has been the first wave of adoption that I have been seeing in the past couple of years, especially related to those customers that are looking at truly what SD-WAN is: not hybrid networking only, but agility and operation costs optimisation primarily. For those customers, as the channels are not ready to deliver appropriate managed services, they have been looking at insourcing the management of their network.
That was the first wave, but in the past couple of quarters I have seen a second wave of customers that are more traditional or hybrid, who are looking at serious channels for outsourcing their network management rather than insourcing.
- Raghupathy N, director of enterprise networking, EMEA, Dell EMC
- Mark Bayne, director of sales engineering, EMEA, Cato Networks
- Mike Wilkinson, chief product officer, Infovista
- Simon Wilson, Aruba chief technology officer, UK and Ireland, HPE
- Frank Lyonnet, deputy chief technology officer for cloud infrastructure BU, Riverbed
- Ivan Duggan, director of enterprise networks and infrastructure, EMEA, Cisco
- Carl Windsor, senior director of product management, Fortinet
- Thomas Quinlan, solutions architect, Zscaler
- Adrian Tate, vice-president of sales for EMEA, Oracle
- Song Toh, vice-president of product management, Tata Communications
- Tim van Herck, director of technical product management, VMware
- Michael O’Brien, worldwide vice-president, channels, Silver Peak
Adrian Tate: Those channel firms that are researching don’t seem to want to pin their colours to one solution. A lot of them want to be seen as independent consultants around SD-WAN and almost hedge their bets, so if the customer gives a preference they can provide that. They are opting for three or four solutions.
On the customer side, my personal opinion about the 26% adoption is that it seems extremely high, based on what I am experiencing. In the US, we now believe we have crossed the chasm and mainstream is adopting it, but here in Europe we are still a bit behind. Everyone I am speaking to is in a research or information gathering mode – there are very few people actually taking the plunge. If they do take the plunge they are not going enterprise wide but are doing a pilot.
Michael O’Brien: From a Silver Peak perspective, that number is probably a little bit low. We believe about one-third of the enterprise market has either deployed or plans to deploy SD-WAN in the coming 12-24 months. As a company that has only WAN or SD-WAN, we have well over 1,000 production customers that have now adopted and are using SD-WAN in a production environment. Partners are placing bets on the SD-WAN market right now and investing in aligning their business models to capitalise on the opportunity. In the service provider space, they are placing their bets very early on and the market is validated as enterprises seek and deploy managed SD-WAN services. We are seeing the same third of enterprises saying that they now want it. Some of the partners are saying they can’t support three or four platforms and are now starting to consolidate.
Ivan Duggan: We are expecting about 55% of our customers to make an SD-WAN decision in the next nine months. In terms of the energy and excitement, it is really high. We are seeing a lot of our service providers build SD-WAN offerings, and as a technology it is not necessarily just to drive cost savings, but about how they can leverage digitisation and multicloud and application storage and consumption to deliver differentiated experiences to their staff, supply chain or whoever it might be.
What SD-WAN delivers is the chance for small organisations to leverage the cloud in a secure, effective way.
Raghupathy N: SD-WAN in EMEA is really picking up and Dell EMC is in several live opportunities. The adoption is real. One of the challenges to address is around the skills needed in the channel to deliver products of this kind – that is why they are not in there.
SD-WAN as a project is going to be multi-region and multi-country. Not many partners are able to support that. We are looking for partners that can deliver these kinds of projects across the region, and they could be independent channel partners or telcos.
SD-WAN as a practice is going to draw up new systems integrators. It is a huge market for us. But we are looking beyond SD-WAN, rather we are seeing opportunities for a uCPE [universal customer premises equipment] play.
Tim van Herck: Another data point that signals we are seeing more adoption is that we see customers deploying SD-WAN without taking a formal proof of concept in the lab. They are doing a soft touch and then moving on, so that is also another signal that adoption is increasing.
Mike Wilkinson: When I started with Infovista a few months ago, the first thing I did was pick up the phone to Gartner and start talking to the analysts. We had one question: What is the trigger for buying SD-WAN? I was expecting digital transformation, but they said the primary trigger was WAN refresh. Customers are coming to the end of a contract and have heard about SD-WAN and want to know if they can use it. The second trigger was the increasing move to cloud-based applications, changing architecture and the need to use business internet instead of dedicated circuits.
Those were the two primary drivers Gartner is seeing from enterprise customers. The vast majority of the enquiries have been from the US, and some in Europe. If you understand those triggers then you can ask what is behind them. I worked with the UC [unified communications] channel for 10 years, and they were starting to put in SD-WAN – not for cost savings, but for resilience. The UC market traditionally was selling to SMEs, but a lot of those players are now going upmarket and specify an SD-WAN service for SME customers to improve resilience for cloud services.
Tim van Herck: A lot of customers are deploying SD-WAN as a break-fix scenario. They have customers where SD-WAN gets deployed and they realise they can get cost savings and deploy it to other sites.
Mark Bayne: We are seeing not cost savings being the main element, but the cost per megabyte being the most interesting. Not necessarily trying to reduce the MPLS [multiprotocol label switching] costs, but for the same budgeted amount will be able to enable those cloud strategies by enabling more bandwidth per site for the same cost. Our approach is to replace MPLS, but that is the nature of the way our solution works.
Q. Tata, you have to offer various options, but what has been the most popular in your customer base?
Song Toh: I think hybrid is popular. WAN refresh is the triggering event, and the conversations are always about how they improve the performance they are getting at either the same budget or lower. We started doing that over two years ago. SD-WAN is a continuation from hybrid, not a revolutionary jump. We are seeing high interest from customers on SD-WAN, which is becoming an important factor in the WAN decision-making process.
Michael O’Brien: I agree that hybrid WAN is a big driver and customers want the ability to integrate into their current environment without disruption, and workload transformation is driving the network. Networks were built in the 1990s and customers now want flexibility. We are also seeing many enterprises make a shift towards all-broadband as their MPLS contracts come up for renewal.
Q. If some customers are running this alongside existing networks, it might end up costing more?
Ivan Duggan: Some organisations will get cost savings because their MPLS circuits are so big they can reduce some of those. But SD-WAN is really all about consuming applications from the cloud – Amazon Web Services, Azure, or whatever it might be. How can we consume that effectively, efficiently and securely? I now have applications running over my network that I have no idea what’s in there because they might be encrypted. How can I see what’s happening and how can I manage it? It goes back to talking about workload transformation and giving that high-quality user experience.
Adrian Tate: The first point I hear from a C-level person is about cost savings, and that is what they think they are going to get from SD-WAN.
I would suggest that it really depends on who you are talking to about what benefits they are looking for. A global organisation with sites in every corner of the world might be looking for savings of 50% plus, but a national retailer might not see any cost savings because the cost of bandwidth in the UK versus internet is not that great. But C-level people are expecting cost savings and they sign off the project, so you have to show a business case to win the deal. Really, it is about network resilience, reliability and quality of experience, but it can be hard to monetise those.
Mike Wilkinson: I have seen examples in the UCaaS industry where operators and the channel look for SD-WAN as the solution. I will give you one example of a UCaaS provider in the UK. They deliver a service and their problem was that when they deployed in a customer deployment they sized it for voice communications, but more video is happening and they don’t know how much. They need the channel to step in to work it out and are now looking at SD-WAN as a way of solving the problem. If you can get the channel to identify the business problem at an application layer, they can then link that back to the underlying networking technology that needs to be brought in and connect the two together. That’s why the channel is so important – because they are the people who really understand the business issues. The channel understands what the application is and what the networking technology can do.
Carl Windsor: One thing that we have not touched on is the skills that are available within the organisation. You need a lot of people to manage a traditional, distributed WAN. There is a big operational cost benefit you can gain from the consolidation of SD-WAN, security and the access layer by moving to an SD branch deployment. Moving from software-defined wireless area networking to the next step where you are integrating your access network, switches and wireless then starts to bring some tangible benefits that are not only focused on the bandwidth and MPLS savings.
Frank Lyonnet: I agree there is a continuum with the hybrid network. Hybrid networking bandwidth savings is a tangible benefit that will always help moving to SD-WAN. But there is a stronger driver with the cloud, and I can tell you I have multiple customers that are not driven by the notion of saving on bandwidth costs. They have a cloud-only strategy and the problem they were trying to solve is change management complexity – for them, management changes of networking and security policies was so painful because it was done through a rigid service provider. They were able to use SD-WAN to increase agility of changes and reduce operational complexity and they built a return for their SD-WAN solution by saving on network operations through insourcing of the management of the network.
Michael O’Brien: We quantify cost savings in three different ways: time to market, quality of service and the actual hard cost savings you might see. Those three factors together – and we find partners with the best costing models – are helping customers.
Raghupathy N: I agree, but we tell customers that SD-WAN as a cost-saving measure will not work in the short term, but it may eventually lead to cost savings in the long term. We have customers that have adopted SD-WAN as a managed service too, and there are enterprises that want to do that. But the immediate benefit of SD-WAN is that customers can bring their entire WAN infra-intelligence into a single dashboard that simplifies management. A dashboard in real time that shows what happens across the network, and that is a major benefit for customers.
Q. Who says you can run business-critical applications on SD-WAN and get a comparable performance to MPLS? OK, so based on a show of hands, that’s a majority of the people here.
Song Toh: My company serves global enterprises, and there are significant areas where business internet is not really fit for business.
Ivan Duggan: I live in Limerick and I have an MX200 Tele-Presence in my house. When I’m not travelling, I’m on that.
Mike Wilkinson: It’s very region-specific. If your customers are around London, then you might not have a problem, but if you go and roll that service out in Scotland or Wales, then the broadband will differ. If you go to Italy, then the first-time failure rate for UCaaS is 10 times that of the UK.
Tim van Herck: You can de-risk your operation at that point and bring in multiple service providers and access technologies.
Q. But what’s the cost of that?
Mike Wilkinson: I have seen one provider in the UK that just targets construction. It will go into greenfield sites and put in a piece of universal CPE [customer premises equipment] with 4G connections, and fire it up and then bring in fibre and maybe also a DSL circuit, and it is off and running, and that is the user case. So you do see transitory businesses trying to make use of this technology, where they have lots of variability.
Ivan Duggan: If your current infrastructure is providing a level of service that you want it to provide and you are not going to SD-WAN because you are not trying to drive cost savings, but because you want to automate the process and orchestrate some capabilities that will automate how you deliver segmentation, consumption, tagging, security and how you embed that into the process of what you do. It is all about the technology and how you consume applications from anywhere. That goes back to the question of why people are doing it. They are not doing it to save money on the network, but because it enhances their ability to deliver services to their users.
Simon Wilson: They are doing it for all of those reasons. It depends who you ask and the shape of their organisation. If they are a huge multinational organisation with a few megapots, then they are doing it to save money. But if you are talking to a retailer with 1,000 branches, then they are doing it for agility, so they can compete with the internet-only retailers.
Mark Bayne: The right partner can de-risk it for the customer because they will have the right relationships. They don’t worry about the middle mile because that is handled by Cato, but they do worry about the last mile and that’s why the partner needs to have the right relationships.
There is an unpredictability of the internet which you can overcome with some SD-WAN functions, but you can have a middle mile that can reduce that unpredictability.
Michael O’Brien: That’s the real underlying opportunity for the channel. You can have a small value-added reseller and an opportunity to represent selling into this larger MPLS market, which was not available to them. If you are looking from a customer perspective then they spend millions, and that is quite some market.