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Managed software-defined WAN services are overwhelming the once-standard do-it-yourself SD-WAN approach, as enterprises realize the benefits of working with a service provider.
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With DIY SD-WAN, enterprises purchase software-defined WAN products directly from vendors, and then IT teams deploy the service themselves. With managed SD-WAN, enterprises buy through service providers -- many of which they already use for other network services. The added benefit is the service provider also manages the network for the enterprise.
Roopa Honnachari, industry director for business communication services and cloud computing at Frost & Sullivan, said recent research showed 80% of enterprises chose managed SD-WAN, compared to 20% choosing the DIY SD-WAN route.
"When you look at the SD-WAN sites deployed out there, there are very few enterprises doing it themselves or managing it themselves," Honnachari said.
She predicted DIY SD-WAN deployments will continue to decrease over the years, as enterprises realize the benefits of handing management over to a service provider.
"I feel that [number] is going to reduce further in the next few years, because the only organizations that have the capability for DIY are large enterprises that have the necessary IT resources to manage that," she said.
But even enterprises with the resources for a DIY SD-WAN approach might not want to spend the time it takes to manage those network connections.
As the SD-WAN market evolves, it's not just about buying the SD-WAN appliance, putting it at the branch site and then running it, Honnachari said. "It has to work with all the WAN infrastructure and enterprise solutions you already have in place. And these services or solutions have been traditionally bought from the service provider."
As a result, enterprises are turning more to service providers that are better equipped to provide the SD-WAN service and manage it for them, especially because those service providers are often already providing them with other WAN services.
"That's why you see a lot of partnerships where the service provider manages not just the SD-WAN design deployment, but they also manage the network services that go along with the SD-WAN solution," she said.
Assessing the managed SD-WAN market
Roopa Honnachariindustry director for business communication services and cloud computing, Frost & Sullivan
In 2017, the managed SD-WAN market reached $700 million, Honnachari said. By 2022, Frost & Sullivan projects the market could reach $3.5 billion. Service provider and SD-WAN vendor partnerships are a huge part of this growth. Over the past couple of years, service providers have partnered with vendors to offer joint managed SD-WAN services as part of their broader enterprise portfolios.
Service provider partnerships aren't necessarily limited to working with one SD-WAN vendor, either.
"I'm seeing a lot of service providers looking at a multivendor strategy," Honnachari said. "They could have a partnership with Viptela, but they could also have a partnership with Silver Peak. Most service providers have probably settled down to two or three vendors."
The potential for losing customers cutting down on or abandoning MPLS services altogether is spurring many service provider moves to add SD-WAN partners, she added, as SD-WAN deployment continues to threaten MPLS services.
"Most service providers have launched an SD-WAN offering in the market basically to retain their MPLS revenues," she said. "If they didn't have an SD-WAN offering, then customers were actually evaluating other providers that could provide that option for them."
By offering managed SD-WAN, service providers can shift revenue from a revenue source like MPLS to another. This shift is critical for service providers, Honnachari stressed. Otherwise, customers will choose another provider that offers SD-WAN services.