Network transformation can be risky, complex, and take time. Advancements in network technologies often result in downward pricing pressure on legacy infrastructure and services. Digital transformation could involve rethinking traditional business models, work modalities, and employee access to key corporate applications, as well as enhancing network agility and resiliency. To put it mildly, that covers a lot of ground.

Savvy customers can leverage a hybrid approach maintaining certain legacy services like MPLS for the intermediate term while deploying less expensive internet access where appropriate. This allows the enterprise to capture the benefit of reduced cost on new services and the write-down of legacy network services to drive optimal financial outcomes. Added benefits include the substantially lower risk profile in not having to physically migrate the services and an earlier realization of savings.

For those living in the world of network services, digital transformation has become a catalyst for the evolution of corporate wide area networks (WAN). Legacy WANs were often designed around data center-centric hub and remote site architectures. With the dramatic increase in cloud-based applications, this architecture model no longer meets the need of the enterprise.

Enterprise WANs are evolving rapidly to accommodate:

  • Secure and near-instant access to cloud-based corporate applications
  • An increasingly decentralized workforce that relies heavily on IP voice and video collaboration tools
  • The need to re-configure devices and security policies more quickly and flexibly with much lower management overhead

Router-based architecture costly, cumbersome in today’s climate

One key enabler of digital transformation is software defined wide area networking (SD WAN). Legacy WAN architectures are primarily router-based. Hardware is tightly coupled with software; the network “data plane” and the “control plane” reside in the same box. While cutting edge for network architectures at one point in time:

  • Router-based networking is cumbersome and, increasingly, unable to keep up with current enterprise networking needs
  • Router configuration changes are time-consuming and require expert knowledge; hence, it is expensive to manage and maintain and can be error-prone

SD-WAN is a virtualized, software-based service that creates a separation, or abstraction, of the control plane from the data plane. This separation creates an SD-WAN overlay (control plane) and a transport underlay (data plane). A single instance of the SD-WAN overlay can manage multiple transport underlay technologies, and the overlay is agnostic to the underlay technology and supplier. This allows the creation and management of so-called hybrid networks made up of a mix of transport technologies such as MPLS, dedicated internet access, and broadband and wireless connections.

The SD-WAN control plane, or orchestration layer, provides:

  • Application-aware routing
  • Optimized WAN performance
  • Traffic prioritization over multiple transport modalities
  • Improved analytics
  • Fault isolation
  • Simplified policy management
  • Accelerated network configuration

Further, SD-WAN enables more efficient access to cloud-hosted applications without having to backhaul internet traffic to corporate data centers or compromise on security. The SD-WAN overlay, which can be hosted in the cloud or on-prem, provides centralized management through a single pane of glass. This reduces network management complexity and drives operational gains.

The business case supporting the transformation of the enterprise WAN can be compelling, but you need to do your homework.

SD-WAN drives enterprise migration away from expensive legacy WAN technologies, primarily MPLS, by leveraging:

  • Lower cost, internet-based transport for remote site connectivity
  • Internet-first strategies for local breakout

Access to cloud-hosted resources

SD-WAN also maximizes the utilization of bandwidth resources which can lead to a reduction in the aggregate bandwidth needed at a particular site or moderate the rate of increase. Dual redundant, active/passive MPLS circuit configurations are wildly inefficient and expensive. With an SD-WAN solution, the passive MPLS circuit can be replaced with a lower cost dedicated internet connection. Enhanced application awareness provides for least cost routing which is particularly beneficial for non-latency sensitive applications such as email or web browsing that can be routed over the secondary internet connection. Further, as enterprise networks become more decentralized, with applications residing in the cloud and which are accessed more directly, the need for large, costly head-end MPLS and dedicated internet ports at data centers should diminish, in some cases, significantly. Depending on the chosen solution, SD-WAN may reduce ongoing maintenance and management costs and the complexity of legacy hardware by collapsing functions of firewalls, WAN accelerators, VPNs, and IDS/IPS into a single edge device.

Erosion of transport services revenue

Traditional Tier 1 telco providers are watching revenues erode as enterprise customers look to internet aggregators to provide connectivity that can be managed centrally by the SD WAN solution regardless of the actual provider of the access connection. This dynamic helpfully exerts downward pricing pressure on legacy transport services, making way for alert enterprises to achieve savings opportunities as incumbent providers fight to halt, or at least delay, WAN technology migrations.

Achieving cost reductions on the embedded base of legacy services can provide savings sooner without the additional risk and complexity of circuit and service migrations. At least in the near term, some enterprises will continue to feature a combination of residual MPLS and new internet (or other transport) connectivity. Here, the optimal financial outcomes for the transport underlay are achieved by combining new, lower-cost transport services with optimized legacy MPLS pricing. That said, many enterprises are moving from MPLS completely, but this depends on their specific needs and appetite for transformational change.

The total cost of ownership of the SD-WAN solution must be factored in when assessing the benefits of choosing different WAN transport options, and there are some serious pitfalls to avoid.

Beware of Over Scope: It’s critical to document a holistic set of requirements that does not over scope the solution. Specifying a more expansive feature set and greater functionality than required can translate into higher costs with software licensing and the requisite SD-WAN appliance. Equally, with some solutions, these charges are directly linked to the aggregate bandwidth and throughput.

Managed Service vs. DIY: Your management choice will also be a major cost driver– whether to deploy a fully managed solution or some version of a DIY or co-managed model. SD-WAN is complex technology. It’s not the “plug-and-play” solution that much of the trade press might lead you (or your CIO) to believe. The current trend in the large enterprise space leans toward using a more fully managed solution. However, the pricing and scope of managed solutions can vary significantly.

Consideration of ancillary adoption costs: Often initially forgotten, your analysis must also consider the implementation cost of shipping, deploying, commissioning your chosen solution, and harmonizing installations with circuit provision and disconnections. Most large SD-WAN deployments benefit from additional specific SD-WAN expertise from the solution provider or managed-service partner. Field resources (your own or from a third-party supplier such as your managed-service partner or an implementation specialist) and additional project management resources are going to be required. Either approach should include both internal and external costs in planning and comparative modeling.

Consider sourcing programs: Some enterprises may be without internal resources or prefer to focus on other parts of their business strategy; they might seek a competitive sourcing program to do the due diligence for them. The enterprise wants to ensure it has selected the right solution, optimize costs, and has the deal structure and scope of support and services required. Sourcing programs can deliver the suppliers and solutions that most fully align with the enterprises’ technical, commercial, and financial requirements and objectives. Look beyond primary provider: It’s important to avoid the default position that leads some enterprises to only explore the technology with their primary incumbent WAN provider. This may ultimately be the best way forward, but we have frequently seen sub-optimal outcomes from such an approach.

Separate or modularized RFPs are required to get the most out of the transformational opportunity presented by SD-WAN — one for the SD-WAN solution, management, and implementation, and one for the network transport. Whether they are bundled (SD-WAN + transport) or pure-play SD-WAN solution suppliers, managed network service providers, traditional carriers, or transport aggregators, this is the best way to engage and exert maximum leverage across the range of provider alternatives who might fit your needs.

Tony Mangino

Tony is a Director at TechCaliber Consulting (TC2) with extensive experience in the procurement of today’s market-leading hybrid WAN infrastructure and service solutions. Tony leverages his detail-oriented expertise in all phases of the strategy, design, and sourcing processes to obtain sizable cost reductions in projects for large, multinational corporations across a range of user-managed and supplier-managed platforms. These projects increasingly feature SD-WAN, “Internet First” strategies, networking for cloud, managed services, and transformational infrastructure initiatives. Tony holds a bachelor’s degree from Allegheny College and an MA in Telecommunications Management from The George Washington University.

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