State of Managed SD-WAN, SASE: VMware Portfolio Changes Cast a Heavy Shadow

Double-digit growth in software-defined wide area networking (SD-WAN) and secure access service edge (SASE) is propelling telecom service providers forward, despite a changing OEM landscape.

Service providers and their sales partners continue to enjoy customer demand and revenue growth for managed SD-WAN and SASE. Dell'Oro Group found a 23% growth rate in the SASE market last quarter. Moreover, the security service edge (SSE) and SD-WAN components of SASE both grew more than 20%, according to Dell'Oro.

Enterprises Report Successful Deployments, Less Patience

These solutions are overlapping at the enterprise level, according to Brian Washburn, research director of service provider enterprise and wholesale for Omdia (a Channel Futures sister company.)

A recent Omdia survey of 315 large enterprise users of SD-WAN, SSE or SASE found that these companies deploy an average of 3.4 such solutions. Half the time, (54%) there are overlapping solutions because they perform have different functions, and 43% of the time it's because different groups are using them.

Washburn also said enterprises are becoming more quick to switch SD-WAN and SASE platforms. Although most of them report satisfaction with their current platforms, they won't hesitate to make a change, Washburn said.

Related:Will Broadcom 'Milk' VMware SD-WAN Post-Merger?

"In the past, many enterprises unhappy with their network transformation solutions were willing to 'stay the course' – work with their suppliers and partners to address and resolve issues," Washburn told Channel Futures.

Omdia's Brian Washburn

He said Omdia previously observed "more relatively fresh" SD-WAN deployments in past surveys. That seems to have shifted, he said.

"There are now fewer completely new builds. More enterprises are several years into SD-WAN. If they’re unhappy now, they don’t have patience," Washburn said.

VMware Impact

That trend may be tested amid significant changes at one of the largest SD-WAN/SASE platforms.

That's VMware, whose acquisition byBroadcom has kept channel partners of all kinds on notice.

VMware, which leads Vertical Systems Group's Carrier-Managed SD-WAN Leaderboard, is experiencing changes to its portfolio amid the integration. That includes led to the "overnight" retirement of different SD-WAN product SKUs. Perhaps most looming is Broadcom's integration of Symantec's SSE functions into VMware VeloCloud SD-WAN. At the same, VMware's marketing resources for its SD-WAN business have shrunk, and some partners report that they expect to see price increases.

Broadcom has vowed to increase VMware's EBITDA from $4.7 billion to $8.5 in a matter of three years, and it has already implemented price increases and product rationalization in other parts of the portfolio since closing its VMware acquisition late last year. Is cost-cutting part of a larger effort to trim the company, or an expression of priorities?

Related:Broadcom Makes Concessions for Upset VMware Cloud Partners

"We just don't know if Broadcom cares at this point," said a service provider executive, who asked to not be named.

Technology advisors, who source the services of these providers, so far aren't reporting any tumult with VMware SD-WAN yet. But commentary from the service provider community suggest that the ripple effect of the acquisition is still making its way to advisors and their customers.

A Competitive Market

But VMware aren't the only players in this narrative. Several strong players are making a bid to win SASE deployments with midmarket and enterprise customers, as well as win the trust of service providers. Some of these vendors come from the cybersecurity/firewall world (including Palo Alto Networks and Fortinet), while others come from the networking and data center world (Cisco and HPE Aruba). Cato Networks has represented a merging of the two worlds since its inception in 2015. Still, players with seemingly smaller marketing presences, like Peplink and Bigleaf Networks, have built strong relationships with different service providers.

Channel Futures queried different telecom managed network service providers and aggregators about their market observations and feedback for vendors. Some requested anonymity in their responses. The four named providers are listed below, alongside the vendors in their portfolio.

Technology advisors and some underlying vendors also weighed in.

In the slideshow, they discuss the opportunities and challenges they see in managed SD-WAN and SASE.