IDC Study: 47% of Businesses Have Migrated to SD-WAN
And another 48% say they'll deploy the technology some time in the next two months.
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Respondents pointed to staffing as a key challenge of do-it-yourself SD-WAN. It was the biggest challenge, followed by the struggles of negotiating with vendors and connectivity providers. The report authors wrote that businesses struggle to identify, hire, train, retain and compensate people with the skillsets to run SD-WAN.
“In modern networking, as in other tech areas like AI/data, cloud, and cybersecurity, there simply aren’t enough experts to go round,” IDC wrote. “Inevitably, they become concentrated in technology and service firms, building platforms and services that are sold and consumed as a service.”
Garson agreed.
“With the past reductions in IT staffing numbers, a managed SD-WAN makes a great deal of sense. The complexity of management really depends on the technology platform selected. Some are actually quite easy to manage. But managing circuits is something everyone should outsource, if they don’t do that already,” Garson said.
Toth said he considers vendor- and co-managed the ideal model.
“If you’re going to make a big investment in an SD-WAN platform, the co-management by a vendor will ensure that the value is realized,” Toth said.
SD-WAN represents an interesting intersection between different partner models, as some of the most notable pure-play SD-WAN vendors are often known for selling hardware that the customer manages, making them a prime target for capex-focused VARs.
But many of those pure-play vendors (such as Versa Networks and VMware VeloCloud) have partnered with telecom service providers that wrap services around their platforms. Technology advisors (agents/brokers) have embraced those offerings, as well as providers (such as Cato and Aryaka) that offer both the service and the technology.
So what type of consumption model did customers in the survey tend to prefer?
IDC found that 52% of organizations deployed SD-WAN as a fully managed service from the provider/vendor. Another 22% chose to co-manage the offering with the vendor.
That leaves 25% of organizations who chose to run the technology themselves.
SD-WAN emerged several years ago with much fanfare about how it would save customers money by allowing them to move from beefy MPLS networks onto public internet.
“While cost reduction is not the most important factor in using SD-WAN and the cost benefit over MPLS in major markets can be slim, it will become more pressing over the coming years,” the report authors wrote. “Opportunities to mitigate cost will grow as new competitive underlay networks are rolled out.”
While Garson noted that dual DIA circuits can replace an organization’s most expensive MPLS circuits, he said overall cost savings aren’t necessarily a given with SD-WAN.
“While initially, people look at cost reduction as an SD-WAN driver, what they find it that growing bandwidth requirements offset the cost savings expected, because a 10 Mbps MPLS circuit might be replaced by a single or dual 100 Mbps DIA circuit,” Garson said.
The most commonly selected “business priority” for respondents’ organizations was to become a data-driven business. That’s different from the second most popular priority: becoming a digital company. And IDC pointed to a significant diffierence between those two drivers.
“Data and digital are foundational initiatives: How companies will operate and grow in the future depends on them. However, although they are connected, they are not at the same level of maturity. In our survey, companies that are prioritizing digital tend to have ‘lagging’ characteristics.”
And those lagging characterstics include not planning to use SD-WAN or using a first-generation solution.
IDC wrote that data-focused companies have established a more mature technology posture and in more cases have completely migrated to SD-WAN (and an advanced version at that).
“In both cases, SD-WAN is a marker of technological maturity. We see this throughout the research: Organizations that are most advanced in their use of technology to solve business problems also tend to be more advanced in their use of SD-WAN,” they wrote.
C3 Technology Advisors lead consultant Matthew Toth agreed that a correlation exists between SD-WAN deployment and IT maturity.
“If a client hasn’t deployed SD WAN, it’s an almost easy assumption that they underinvest in IT generally. I figure that their office walls are also probably covered in fake wood panels,” Toth told Channel Futures.
The most respondents chose security as their biggest priority on the WAN side of the business. That fits well with just under 40% of them saying that they have integrated their networking and cybersecurity teams.
However, Garson noted that security doesn’t appear to him as the biggest driver of SD-WAN deploment.
For Garson, migrations usually stem from the technology life cycle.
“While security improvement is an obvious benefit of an integrated SASE approach, SD-WAN is typically driven by an expiring MPLS contract and the fact that most applications have moved to the cloud, where internet is the transport of choice,” Garson told Channel Futures. “The security organization has different priorities and the timing of contracts often varies between the network team and the security team. Where security and network teams work closely, security is a driving force.”
What issues are businesses and their IT/network teams trying to address as they converse with partners about potentially purchasing SD-WAN? Well for starters, those priorities can significantly differ.
For example, improved security was the top priority on the WAN side but not found on the business side. Reducing cost was third in business priorities but sixth for WAN priorities.
For the WAN folks, establishing on-demand connectivity (something SD-WAN assists) scored second, followed by hybrid network architecture (which SD-WAN simplifies).
IDC found that almost all of the respondents have deployed SD-WAN or plan to deploy it. Forty-seven percent already have it, 28% will get it in the next year, and 20% will get it in the next 12-24 months. Only 4% said they aren’t planning to deploy SD-WAN in the next two years.
Hilary Fox, CEO of the advisory firm Advoda, pointed out that the study focused on the enterprise market. She said Advoda is seeing markedly different SD-WAN trends in the nterprise compared to among SMBs and mid-market.
“Specific to the enterprise market segment, we are seeing security and flexibility (agility) as the primary drivers (or inhibitors) for change from a legacy WAN infrastructure. Cost compression is always a consideration but rarely the driver for change,” Fox told Channel Futures.
“A primary concern legacy telco companies are struggling to overcome in this area are that few enterprises trust that a telco is best suited to effectively manage this security element and there is a desire to segment network from SD-WAN/SASE licensing and management to maintain leverage and flexibility on the network services side,” she said.
Hilary Fox, CEO of the advisory firm Advoda, pointed out that the study focused on the enterprise market. She said Advoda is seeing markedly different SD-WAN trends in the nterprise compared to among SMBs and mid-market.
“Specific to the enterprise market segment, we are seeing security and flexibility (agility) as the primary drivers (or inhibitors) for change from a legacy WAN infrastructure. Cost compression is always a consideration but rarely the driver for change,” Fox told Channel Futures.
“A primary concern legacy telco companies are struggling to overcome in this area are that few enterprises trust that a telco is best suited to effectively manage this security element and there is a desire to segment network from SD-WAN/SASE licensing and management to maintain leverage and flexibility on the network services side,” she said.
The migration from MPLS to SD-WAN is an inevitable proposition for most companies, one partner told Channel Futures.
IDC earlier this month unveiled a GTT Communications-commissioned white paper, “Realizing the Full Potential of SD-WAN.” The report, based off the survey of hundreds of IT decision-makers, points to widespread adoption of SD-WAN, shifting motivations for deploying the technology and increased popularity of the managed services consumption model.
IDC pointed to three broad drivers for SD-WAN adoption. First, customers view SD-WAN as an overlay that can centralize, automate and optimize a wide sprawl of networks, vendors and workloads. Second, it can save customers time and money and make life more simple.
Third, SD-WAN aids businesses in furthering their strategic technology objectives around areas like cloud and cybersecurity. For example, 39% of respondents said they highly prioritize establishing the secure access service edge (SASE).
SD-WAN Experts’ Steve Garson
Steve Garson, who leads the advisory firm and networking consultancy SD-WAN Experts, said migration will occur even for the companies that haven’t been diving into digital transformation. That stems mainly from the slow, yet oft-predicted retirement of MPLS networks that many enterprises face.
“While digital-first companies are leading adopters of SD-WAN, my experience is that nearly every company in an MPLS network will migrate to SD-WAN as that contract approaches expiration. It’s simply common sense today,” Garson said.
IDC surveyed 650 U.S. and European companies. Each operates in at least two countries. Moreover, each drives more than drove €200 million (US $206 million) in revenue annually.
Scroll through the seven images above to read more insights from the survey with commentary from Garson, C3 Technology Advisors lead consultant Matthew Toth and Advoda Technology Solutions CEO Hilary Fox.
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