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The number of partnerships between service providers and SD-WAN vendors is growing quickly, as the former seeks a share of a fast-growing market and the latter looks for an easy path to the enterprise.
The latest deals for SD-WAN as a service include Comcast Business launching a beta trial of Versa Networks' technology and Sprint partnering with VeloCloud. Over the last year, AT&T has also chosen VeloCloud, its rival Verizon has partnered with Viptela and CentryLink inked a deal with Versa.
"All the leading service providers have to offer an SD-WAN managed service," said Lee Doyle, principal analyst at Doyle Research and a TechTarget contributor.
Service providers that don't launch an SD-WAN-as-a-service product will miss out in a fast-growing, multibillion-dollar market. Worldwide revenue from SD-WAN is growing by 90% annually and will top $6 billion by 2020, according to IDC. Service providers will account for more than a third of the overall market.
SD-WAN's popularity is due to its ability to lower network costs by determining the most efficient way to route traffic to remote locations. Examples of SD-WAN use include routing high-priority traffic to expensive, but highly reliable, links like MPLS while sending the rest over cheaper broadband. Companies also use SD-WAN for backing up data and disaster recovery.
Who benefits SD-WAN as a service?
Dan Conde, an analyst at Enterprise Strategy Group Inc., based in Milford, Mass., said the rise of SD-WAN as a managed service is a "major trend" that will benefit SMBs the most.
Lee Doyleprincipal analyst at Doyle Research and a TechTarget contributor
"Small and medium-sized organizations don't want to complicate their lives, so buying a WAN as a service from one managed service provider or vendor is simple," Conde said.
Large enterprises are more likely to license a vendor's SD-WAN product because it provides the option of tailoring the technology to their complex network operations and data center environments.
"Large enterprises will still use traditional SD-WAN equipment for flexibility to meet specific needs," Conde said.
What to consider when buying SD-WAN as a service
Companies interested in SD-WAN should meet with managed service providers (MSPs) and discuss whether their products match the ones sold directly by their partners, Conde said. Also, MSPs should be flexible in their hardware options for deploying SD-WAN. Flexibility is necessary for connecting the technology to other systems in the customer's environment.
"If they are tied to one back-end technology, and that's not what you want, ask for a roadmap [to the preferred technology], or perhaps look at another MSP," Conde said.
Companies that buy SD-WAN directly from the vendors are likely to find their options narrow in time. "I think [market] consolidation will be inevitable in the next two or three years," Doyle said.
Cisco and Nokia were among the first network equipment makers to buy SD-WAN vendors. Nokia bought Nuage Networks in 2015, and Cisco said this month it would acquire Viptela for $610 million.
More acquisitions by gear manufacturers, and possibly service providers, are likely to follow. Acquisition targets could include CloudGenix, VeloCloud, Versa Networks and Silver Peak, according to John Fruehe, an analyst at Moor Insights and Strategy, based in Austin, Texas. Those vendors have a significant market footprint and robust technology.
What you need to know about SD-WAN
Preparing for an SD-WAN deployment
Providing cloud access through SD-WAN