• 06/04/2015
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SD-WAN Gaining Traction

IHS Infonetics survey finds that many enterprises plan to buy software-defined WAN technology with an eye on streamlining WAN operations.

Applying software-defined networking to the WAN is catching on in a big way in the enterprise, according to a new report from IHS. The market-research firm surveyed 150 North American businesses and found that 45% plan to spend more on SD-WAN over the next two years.

There's been a lot of buzz over the past year about SD-WAN technology, which promises to reduce the complexity and cost associated with enterprise WANs. SD-WANs provide enterprises with the ability to apply automation to the WAN and run traffic over a mix of public broadband, private MPLS and other types of links.

Enterprises are looking to SD-WAN as they adopt a variety of SaaS and other cloud services, Cliff Grossner, research director for data center, cloud and SDN at IHS, said in an interview. With increased cloud use, performance requirements to the branch office have grown and traffic is very dynamic, he explained. The MPLS links used in many WANs are expensive and time-consuming to provision.

"The traditional WAN architecture, where you typically connect branch offices to the corporate office, and have that corporate office be the gateway to the Internet, is kind of breaking down," he said.

"If you look at what SDN has been doing in the data center, bringing a lot of flexibility, that same concept is now being applied to the WAN," Grossner said. "We're creating virtual connectivity for the WAN controlled by an abstracted and centralized control plane, and putting a lot of automation into the enterprise WAN, allowing dynamic load balancing of the application across those physical connections."

According to the Rayno Report, the enterprise SD-WAN market could reach $7.5 billion by 2020. More than $360 million in venture capital has been poured into this market, Scott Raynovich, chief analyst and publisher of the Rayno Report, wrote in a blog post earlier this year.

There are several SD-WAN startups, including CloudGenix, Pertino, and VeloCloud, Viptela and Glue Networks. Others SD-WAN providers include Silver Peak and Cisco with its IWAN technology. Last month, CloudGenix said it raised $25 million in funding, bringing its total funding to $34 million.

"Based on their requirements and the new options available, it's really time that enterprises rethink their WAN strategy and buying decisions," Grossner said.

The IHS Infonetics enterprise data center study also found that 100 GbE deployments are growing at the expense of 40 GbE. "The demand for speed is insatiable," Grossner said, citing the surge in video traffic and interactive applications.

Figure 1:

And while many of those surveyed by IHS are investing in SD-WAN technologies, 71% are planning to put software-defined storage products into live production, compared to just 15% today. Just as server virtualization and SDN have made compute and networking dynamic, respectively, software-defined storage brings agility to storage and completes the automation of the data center, Grossner said.

SDN market to surge

In a separate report, IHS forecast that the SDN market of Ethernet switches and controllers will reach $13 billion by 2019, up from $781 million in 2014. The availability of branded bare-metal switches -- or branded white-box switches -- from vendors such as Dell and HP have helped drive SDN growth among enterprises and small cloud service providers, according to IHS.

While it's still early days for the SDN market, and market-share leaders will change frequently, the current leaders are Dell, HP, VMware and white-box suppliers, according to Grossner. In 2014, the leader in controller revenue was VMware, he said.

He predicted that SDN will "cross the chasm" next year, with SDN in-use physical Ethernet switches accounting for 10% of Ethernet switch market revenue.



I really enjoyed reading this article and completely agree with it. As technology continues to increase then collection compliance will as well as well as all of the topics discussed in this article. Many existing data centers date back to the late 1990's, boom, and years leading up to Y2K. After the bubble burst, brand new data centers with no paying customers went dark. Many of the data centers that went dark are now owned by prominent corporations, colocation operators, and cloud service providers. The legacy infrastructure in some sites is no longer manufactured or factory serviced.

Re: Colocation

Thanks for weighing in here, and glad you liked the article. I'm curious, what does collection compliance involve?

Re: Colocation

I guess future is full of SDx, little curious to find more policy routing for the WAN, QoS to control different bandwidth links and applications.

Some Interesting Precedence for This

Very nice article - automating hybrid WAN with SDN-like functionality is getting white-hot in the press but has been around for awhile.

For instance, Talari has been doing this for years and has a battle-hardened solution (particularly for ultra-latency sensitive apps). Others who used overlays for their optimization products (like Silver Peak as you mention) are moving aggressively into this area and taking advantage of the improved ROI (as carriers are being "called out" on egregious MPLS lock-in).

We're at a tipping point of deepened interest from a customer base that has been forced to sip their cloud milkshakes through the WAN's coffee-stirrers long enough. Should be an interesting next few years.

Re: Some Interesting Precedence for This

Agreed, this technology is only relatively new.  Really, the term is the newest thing here.  Companies like Cybera have been doing this type of stuff with a single platform delivering cloud based policy control and end-to-end segmented networks for years with several large enterprises including Shell, ExxonMobil, Samsonite, Captain D's and others.  The start-ups mentioned in the article are just the companies that are still trying to figure out how to do it.

Why SD-WANs aren?t always the answer

Agreed that the SD-WAN industry has seen a busy year but there's one problem. The logic of the VeloClouds and CloudGenixes of the world is: either you already have MPLS which costs a premium, or you rely on the public Internet for your mission-critical applications. And the second logic is the real problem especially if you are serving those apps across oceans because you will have to face congestion, packet loss and jitter. Therefore, there is no guarantee of stable latency and reliable application performance. MPLS is a solution but expensive and if you have to add a new location overseas, it takes a long time to deploy. So, what should an enterprise do if it can't afford MPLS for a new location and relying on the public internet leads to latency issues and unreliable application performance?