SD-WAN Is Changing the Face of Managed Services: Here's What to Expect

Whether you’re a product manager or operations leader at a managed service provider (MSP) – or the end customer of an MSP service – you know the challenges of building and deploying a successful wide area network (WAN) across dozens or hundreds of sites. This includes truck rolls (yes, that’s usually plural) to each branch office to drop off, plug in and properly configure as many as five to seven pieces of equipment. And that doesn’t include all of the ongoing maintenance and equipment swap-outs or additions due to growing business needs or capacity requirements. While the rest of the technology world has grown and evolved at a breakneck pace, WANs haven’t changed in the last 20 years. Until recently, innovation for WANs meant installing new, expensive hardware.

But managed service offerings are starting to change that. Just as enterprise data centers evolved from physical servers/storage/networks to virtualized and orchestrated sets of resources, service providers are starting to leverage the latest in software-based networking products and architectures to create SD-WANs. Trends that started in the last few years, such as network functions virtualization (NFV) from the European Telecom Standards Institute (ETSI (News - Alert)), are fundamentally changing the way MSPs create – and enterprises consume – managed services. 

NFV, and in particular virtualized network functions (VNF), can be a primary change catalyst for managed services. Key capabilities such as

service virtualization, service chaining and the ability to separate services from underlying hardware provide the ability to create a “virtual LEGO® set” of network and security functions that can be assembled into rich multi-feature, yet very dynamic, managed services.

For example, managed SD-WANs can be built and operated like other traditional managed network services; a service provider that invests in building a traditional managed service will do the following:

1. Find an SD-WAN vendor and design a physical deployment + management process around the products
2. Deploy dedicated SD-WAN appliances at each customer’s branch offices, along with separate security appliances or third-party cloud security services
3. Deploy and manage a dedicated controller device at the head-end
4. Double the resources if high availability/fail-over is required

Or SD-WAN can be designed as a true cloud-like service. For example, NFV enables MSPs to perform a number of important functions:

1) Deploy a multi-tenant SD-WAN software platform in the carrier cloud (e.g. PoP) that uses template service definitions and deployment processes

2) Instantly provision new customers by drop-shipping low-cost, white-box hardware populated with software that is auto-provisioned to pre-defined templates

3) Instantly deploy a new customer using a multi-tenant SD-WAN software and management console

4) Continually monitor and improve each customer’s SD-WAN service via integrated multi-tenant big-data analysis

Early adopters of this technology will quickly find that SD-WANs are expected to be a lucrative market. IDC has stated it expects global SD-WAN adoption to generate $6 billion in revenue by 2020, based on the current pressures companies face from their increasing reliance on cloud computing, the need for more sophisticated security measures and the growing number of enterprise applications. Furthermore,  the analyst firm announced that based on a recent survey, nearly 70 percent of enterprises expect to use SD-WAN in the next 18 months.

It’s no surprise that innovative MSPs are embracing SD-WAN for their customers. Case in point: CenturyLink (News - Alert), a global communications, hosting, cloud and IT services company, recently announced its fully managed SD-WAN service. The company is helping customers prepare for the daunting challenges facing enterprises today, which include the Internet of Things, cloud applications and services, and a growing adoption of Internet connectivity in addition to MPLS services. CenturyLink has embraced NFV’s potential and created a highly innovative software-based SD-WAN managed service that features a tightly integrated set of security capabilities.

CenturyLink customers get the industry’s broadest set of SD-WAN benefits, very rapid time-to-service, a wide choice of fully managed connectivity, a full set of Internet security functions and ongoing big-data analytics to improve the service experience. This suite of services was previously cost prohibitive for anyone but Fortune 500 companies. But because services leveraging NFV can avoid proprietary hardware devices, more companies can adopt the technology. With NFV, CenturyLink gains not only new revenue streams but also the ability to innovate and scale services far faster than if it had deployed a proprietary hardware-based managed service.

Managed network services enabled by key industry innovations such as NFV and continued advances from both legacy network equipment makers and Silicon Valley startups will make the businesses of MSPs and their enterprise customers that much better.

About the Author: Kumar brings a proven track record of leading mega-projects at startups as well as publicly traded companies. Kumar is a graduate of the Executive Program at Stanford University Graduate School of Business. He has a Master’s degree in Engineering from Virginia Tech and a Bachelor of Technology from Indian Institute of Technology, Kharagpur, India.