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Cloud computing has taken hold in the data center and has been reshaping the wide-area network market. Market research firm IDC expects revenue from software-defined WAN offerings to increase from $574.2 million in 2016 to $8.05 billion in 2021, a compound annual growth rate of 69.6%.
Channel partners want to take advantage of SD-WAN market growth, with a number of firms in recent weeks launching SD-WAN services and forming partnerships with SD-WAN vendors. In addition, vendors such as Citrix have created offerings designed to encourage partners to provide managed services around their technologies.
A couple of factors have been driving SD-WAN interest. Increasingly, businesses are relying on information to differentiate their products, improve services and boost financial performance. Consequently, network workloads have been increasing and organizations want their WANs to keep pace.
"The continued rise of cloud computing has changed WAN traffic patterns," noted Brad Casemore, research vice president of datacenter networks at IDC.
With cloud, traffic flows from a branch office through the internet to the cloud vendor's data center. Previously, information traveled from a branch to a company data center and perhaps to the internet. Multiprotocol Label Switching (MPLS) WAN worked well with the old-school network design, but SD-WANs provide a less expensive, easier-to-deploy alternative for new-school networks.
A case in point
Cloud has made it appealing for enterprises to hand maintenance of their computing infrastructure over to third parties. As a result the SD-WAN managed services market is booming. IDC expects revenue in this segment to increase from $23.6 million in 2016 to $836.7 million in 2021, a growth rate of 129.2%.
World Wide Technology (WWT), based in St. Louis, is among the service providers that aim to address this opportunity. The company in March announced an SD-WAN service, dubbed Branch of the Future, geared to large-scale retailers, financial services and health care organizations.
Brad Casemoreresearch vice president of datacenter networks, IDC
The company's SD-WAN offering is built on Cisco's Meraki cloud managed architecture, which is used to deploy, configure, manage and monitor network routing and security appliances in branch offices. Meraki, which was founded in 2006 and acquired by Cisco in November 2012 for $1.2 billion, started out as a wireless cloud WAN service and recently moved into the SD-WAN market.
WWT added its own value-added services on top of the Cisco platform. Branch of the Future works with Thelios, WWT's enterprise network management suite designed to help businesses evaluate configuration issues and reduce network setup time.
Founded in 1990, WWT has evolved from a product reseller into a technology solution provider with $10.4 billion in annual revenue and more than 4,600 employees.
Vendors seek service provider ties
SD-WAN vendors have been cultivating channel partner relationships of late.
The partner push stems from a shift in customer buying patterns in the SD-WAN market. The once-typical do-it-yourself approach to SD-WAN is transitioning to a market increasingly interested in managed SD-WAN purchased through a service provider. Frost & Sullivan research indicates 80% of the enterprises it polled chose managed SD-WAN, while 20% of the respondents opted to go it alone.
To help cement channel partner relationships, vendors are revamping their SD-WAN products with service providers in mind. Citrix in February expanded its NetScaler SD-WAN channel initiative to "cover the needs" of managed service provider and network service providers, according to a Citrix blog post.
The Citrix program offers a multi-tenant Citrix Cloud-based Service Orchestrator that lets service providers deliver SD-WAN services to multiple customers through downstream partners, according to Citrix.
Other services debut in the SD-WAN market
Other service providers that have recently unwrapped services for the SD-WAN market include Netsurion, a managed network connectivity and security provider based in Fort Lauderdale, Fla. The company in March unveiled an SD-WAN offering for distributed enterprises and organizations deploying internet of things applications.
The service, Netsurion Connect, is geared toward multilocation businesses, such as retailers, pharmacies, convenience stores, hotels and financial services firms, as well as mobile business such as pop-up stores and kiosks, according to the company. The offering uses a proprietary SD-WAN platform.
Also in March, Hub One, an information and communications technology provider, said it selected Versa Networks as its SD-WAN vendor for a managed SD-WAN service. Hub One, a subsidiary of Groupe ADP in Paris, will provide SD-WAN services and software-defined security to small and medium-sized businesses and enterprises in France, according to Versa Networks.
Newcomers to SD-WAN services face significant competition. Well-established communications service providers, such as AT&T and Verizon, have turned their attention to SD-WAN managed services. The expanding market will enable providers to grow in the next few years, but they will need to move quickly and establish a customer base to be successful in the long term, IDC's Casemore noted.