While the virtualized utopia of telco cloud enabled by NFV and SDN has caught the attention and enthusiasm of service providers, the challenge of getting from here to there has seen an apparent stall in progress. It’s a reflection of the typical Hypecycle curve in which early enthusiasm for a new technology hits an early peak before falling away as the complex realities come into play. Successful technologies survive this and become well established, pulling out of the trough to become mainstream, mass-market phenomena, while failed technologies never recover. For virtualization to pull out of the trough, real deployments that enable real use cases with real revenues are required and software-defined wide area networks (SD-WAN) have several advantages over other use cases in this.
As a technology, SD-WAN is well-known because it has existed for many years. This means service providers have a foundational understanding of it and its capabilities and therefore can more easily identify how it can be operated. At the same time, service provider customers have a familiarity with SD-WAN so understand its benefits more when service providers offer it.
However, being well-understood or at least heard of isn’t enough to stimulate approval for large investments in virtualization projects at service providers, what’s needed is a compelling business case that generates short-term revenue while also positioning the service provider for the virtualized future. This case has to be made against competing investment requirements from other parts of the service provider business. Hot investment focuses right now include 5G wireless infrastructure. This will inevitably cost billions of dollars for typical service providers in spectrum, radio access network (RAN) equipment and the engineering and configuration of new sites or upgrades to existing ones. In common with virtualization, this is a long-term, large-scale investment with multiple interpretations possible regarding the return on investment (ROI) profile.
SD-WAN offers a strong business case in two dimensions. It can enable cost efficiencies in network operations by enabling rapid service provisioning and ensuring maximized resource utilization while relying on commodity customer premise equipment (CPE). In addition, SD-WAN is an enabler for service providers to generate new revenues because of its ability to instantiate new services flexibly, enabling service providers to insert themselves into enterprise services that are further up the value chain than connectivity. This is music to service provider CFOs’ ears because they want to transform their businesses away from providing commoditized connectivity services and provide higher margin, premium services that run on top of that connectivity.
Add to these capabilities enhanced security thanks to SD-WAN’s in-built security protocols and the ability to go to market quickly and suddenly there’s a compelling list of attributes that let service providers achieve short-term business goals while also positioning for the long-term, fully virtualized, automated operations of the cloud utopia.
However, SD-WAN should not be seen as a final destination by service providers. Even though deployment comes with several challenges, notably strengthening virtualized network and software skills within the service provider, SD-WAN only addresses a small proportion of the addressable marketplace. Wider virtualization moves beyond enterprise markets and ultimately presents a much larger opportunity. The importance of SD-WAN today is that it provides a means to demonstrate the advantages of virtualization, utilizing relatively familiar technology to provide premium sizes to enterprises that can be monetized effectively and provide additional operational benefits to service providers and their customers.
It would be over-simplistic to describe SD-WAN as an easy first step for service providers to take towards full virtualization of their networks, it’s too complex for that. However, for many it presents a less challenging pathway and one that offers a greater likelihood of securing internal investment support and delivering quantifiable success and it is that success that is most needed today by service providers as they try to generate momentum to pull virtualization out of the hypecycle trough and upwards again into real, large-scale transformations.
In essence, SD-WAN is hot right now because it is well understood and it presents real opportunities today while positioning service providers’ infrastructure for the virtualized future. Once that’s in place the new revenues and cost efficiencies will flow with fewer impediments.
~Written by George Malim. George is a freelance journalist who covers the telecoms and internet markets.
- Service Provider