Now it’s very clear that all major telecom carriers are deploying or will soon deploy SD-WAN for their next-generation hybrid WAN network made from public Internet and MPLS. Recently both AT&T and Sprint have announced that they will use VeloCloud’s platform to launch SD-WAN solutions in 2017. We also know Verizon is using Cisco’s IWAN and Viptela’s SD-WAN, and CenturyLink is using Versa’s SD-WAN for such hybrid deployment. So this means SD-WAN and network virtualization are the strategic paths that major telcos will follow along in next 3 - 5 years.
Some mentality used to deem SD-WAN as a kind of hype- like just a different name for network optimization and IPsec. Now it is proved that SD-WAN is real and may include elements like network optimization and IPsec but be capable of doing much more.
Now we have some firm answers for a couple of typical arguments around SD-WAN. Some concern is no matter how fancy a vendor touts their SD-WAN solution is, it runs as an overlay on top of the public Internet, or at least part of the public Internet. From the physical layer perspective, while a private IP network or MPLS is managed by specific telcos, hence customers know the network quality can be secured and frequently upgraded, does the physical layer quality and capability of the public Internet remain a serious question mark?
The good news is starting from late 2013, the US Internet industry and market has been witnessing a new boom of network expansion, upgrading and build-out using fiber optics. Back in the year 2000, all fiber network build-out were concentrated on network backbones and submarine cables. But now the new wave of fiber network expansion is along metropolitan regions, last mile access to business and institution buildings, residential homes and condos, as well as wireless access network densification via such as small cells, DAS and carrier Wi-Fi. All these are enhancing and boosting the public Internet network’s bandwidth, performance and coverage to the next level, hence have paved the strategic way for the strong growth of SD-WAN solutions.
Another main suspicion is around how SD-WAN can now claim near MPLS level performance as well as security. So what magic is there that really makes a difference for SD-WAN? The difference is intelligent vs. dumb network management. Through the SDN and NFV technologies, by decoupling the control plane and data plane in the network routing and switching process, and centralizing the intelligence for holistic network transparency and management, all IP packet routing hops and paths can be monitored, managed, and optimized real time. If congestion is detected along a routing path, then the traffic can be rerouted quickly over an alternative open path. If a packet loss happens on the way, it can still be mended instead of being just taken out. In case of network security breach like a D-DOS attack happens, it can be detected and mitigated on time before flooding and crippling a customer edge gateway. In a nutshell, this software powered network intelligence now enables better and more advanced traffic control and management over the public Internet similar to what a carrier can do in managing a private network.
So what’s next for carrier SD-WAN? Based on all the currently robust carrier SD-WAN technology development and service deployment, we may make three forecasts of its trend in the next 3-5 years.
First, we can expect internal network infrastructure capex savings, external client cost reduction and business agility requirements will together keep pumping the SD-WAN advancement from major telcos. Some may say the deployment of SD-WAN will cannibalize the existing lucrative MPLS revenues. That’s only one side of the coin, and the other side is through SD-WAN the telcos can lower their internal network infrastructure and operational expenses, and even the legacy MPLS network can be mostly virtualized too. Besides, telcos can manage to launch and add new services like unified communications, IoT and Smart City over the new hybrid network for new revenue streams.
Second, the telecom/IT enterprise solutions will become more cloud driven and managed services based, and lift these services to the new normal. The rise of SD-WAN fundamentally disrupts and alters the backhaul network architecture of MPLS that was mostly designed for branch offices connectivity rather than cloud solutions linkage. Now SD-WAN can directly link the clients, either in HQ or branch offices to the cloud services like SaaS applications, IaaS operation and storage. With SD-WAN, cloud computing, and virtualization now working hand in hand, we expect more enterprise IT workload will be run and stored over the cloud in the next few years. As the result of such enterprise and its IT functionality decoupling, companies will look for more managed network and cloud solutions from telcos or cloud service providers remotely and from the virtual space.
Third, the SD-WAN sector will go through some consolidations, along the partnership, technology, or product angles. Partnership means when a SD-WAN vendor and a telco work out together well, the telco may acquire the SD-WAN vendor down the road as an affiliate group; or a SD-WAN vendor when growing strong enough, may start to buy out other competitors who own complementary technical niches or features in the ecosystem. On the other hand, the virtualization and software centralized control trend may drive legacy equipment vendors like Cisco, Nokia and Dell, etc. out of the classical CPE business, instead virtual CPE in thin and smart boxes will become more popular for fast and cost effective deployment. The new generation of virtual CPE makers will be motivated to consolidate and standardize their mainstream products via open source and industry protocol establishment for SD-WAN overlay architecture.