The Next Generation of the Enterprise WAN: From WAN to SD-WAN to Next-Gen WAN

With fast-changing connectivity and security needs, enterprises are re-evaluating their WANs and seeking Next-Generation WANs that align with the latest set of enterprise challenges.

Dennis Thankachan

June 18, 2024

3 Min Read
Enterprises are re-evaluating their WANs and seeking Next-Generation WANs that align with the latest set of enterprise challenges.
(Credit: Brain light / Alamy Stock Photo)

Every year, we hear it from a new enterprise Wide Area Networking (WAN) vendor (or perhaps some other acronym): "The enterprise WAN is changing! This time is different!" Although some of what this week's WAN vendor du jour is parroting may be true, the enterprise WAN has been changing for decades, driven by waves of technology change alongside changing enterprise needs. In this post, we'll dig into the emergence of enterprise WANs, how they've changed over time, and what the newest generation of WAN technology is emphasizing.

Emergence of the enterprise WAN and MPLS technology

Enterprise WANs emerged in the '70s and '80s, allowing enterprises to build their own private, secure data networks spanning large geographic areas, enabled by the digitalization of telecom networks and growth in the utilization of computer systems. Early WANs consisted of leased telecom lines using frame relay for data transmission and private branch exchange (PBX) systems for voice communications over the same leased line infrastructure. These original enterprise WANs were extremely inflexible and required the enterprise to design, source, and operate each component of the WAN, but they did work!

In the 1990s, Multiprotocol Label Switching (MPLS) technology emerged, offering greater flexibility and scalability than frame relay. MPLS supported higher bandwidth ethernet connections, offered improved quality of service (QoS), became cheaper over time, and supported converged voice/video/data services on the same line. Further, MPLS was offered by telecom carriers as a managed carrier offering, making it easier to roll out and manage than old-school WAN tech, which required fulsome enterprise management. It's no surprise that MPLS became the dominant enterprise WAN technology in the 2000s.

Shift from MPLS to SD-WAN 1.0

Enterprise WAN conversions from MPLS to Software-Defined WANs (SD-WANs) began in the late 2000s / early 2010s, coinciding with the widespread availability of high-speed broadband, allowing enterprises to orchestrate site-to-site traffic over the public internet at much lower cost and higher flexibility. SD-WAN technology allowed enterprises to leverage any combination of transport services (broadband, dedicated, 4G / LTE, etc.)  from multiple carriers (instead of just dedicated circuits from a single carrier), significantly improving flexibility and ease of operation. SD-WANs could also be architected to be much cheaper than MPLS networks, with the cost of a broadband / dedicated ISP circuit + an SD-WAN service coming in 50-60% cheaper than a comparable MPLS service.

Over the course of the 2010s, enterprises that had generic WAN use cases mostly turned down MPLS networks in favor of commodity internet underlay and SD-WAN overlay. In fact, nearly 90% of enterprises had rolled out some form of SD-WAN by 2022.

Changing enterprise needs and the “new school” of SD-WAN

In the past few years (namely, post-COVID), enterprises have seen changes in the nature of user distribution, compute workloads and security needs. With the emergence of remote work, enterprise WAN perimeters have changed drastically, needing to accommodate many more devices, endpoints, and access types. Enterprise applications and data, historically hosted at enterprise premises/data centers, are now more typically housed in the public cloud or in a multi-cloud, hybrid cloud environment. Along with these changes, the cybersecurity threat landscape has changed markedly, exposing new enterprise vulnerabilities.

With all of these changes to enterprise WAN needs, enterprises are re-evaluating their WANs and seeking WAN vendors that align with the latest set of enterprise challenges:

  • An open network architecture that can on-ramp from mobile, desktop, or branch locations with off-ramps to any cloud architecture with flexibility on transport type

  • Services that offer robust middle-mile networks to accommodate global connectivity with low latency

  • Security offerings embedded within their SD-WAN offering (SASE)

  • Cloud-centric reporting and orchestration capabilities

Accordingly, today, I’m seeing a “new school” of SD-WAN vendors emerging that have their businesses built around the above needs, and I am also seeing enterprises undergo a new WAN shift from SD-WAN 1.0 to next-generation WAN vendors.

How long will this last, and when will the next wave of change occur? Only time will tell!

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About the Author(s)

Dennis Thankachan

Dennis Thankachan is the founder and CEO of Lightyear, a web platform that helps businesses comparison shop for IT infrastructure services (internet access, VoIP, managed services, etc.). He regularly writes on various IT infrastructure and telecom topics here. Dennis is based in NYC.

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