Will Adopting new SD-WAN Solutions Cause Users to Switch Vendors?
This is the seventh in a series of blogs on the topic of the evolving enterprise WAN that is based on a survey that was completed in May 2016 by 110 network professionals. The previous blogs were:
- What’s Driving Change in the WAN?
- The Limitations of the Current Branch Office WAN Architecture
- How well do SD-WANs Support the Forces Impacting the WAN?
- When will SD-WANs be Broadly Adopted?
- Where do Users Want WAN Functionality Hosted?
- Which SD-WAN Implementation Options do Users Prefer?
This blog will focus on branch office networking and will look at the likelihood that as companies implement SD-WAN solutions that they will move away from their incumbent vendors and get those solutions from new vendors.
A WAN Transition Point
Whenever there is a transition point in IT there is the potential that some vendors will gain market share and that some will lose market share. The adoption of SD-WAN functionality is a major transition point and hence has the potential to have a major impact on the market share of the providers of WAN equipment and WAN services.
As described in Where do Users Want WAN Functionality Hosted?, the traditional branch office WAN architecture relies on a sophisticated, hardware-based router in each branch office as well as in each data center. Additional Layer 4 – 7 functionality, such as optimization and security, is sometimes provided by the router and sometimes by external appliances.
This transition to SD-WANs presents incumbent router vendors such as Cisco with challenges both in the short term and in the long term. In the short term, part of the challenge is that network organizations will implement an SD-WAN solution from a competitor on a DIY basis. Many of these competitors are the traditional providers of branch office optimization and security functionality who have decided to expand the functionality of their products to at least maintain market share and to hopefully gain market share. Another part of the short term challenge is that network organizations will implement a managed service from a Communications Service Provider (CSP) that uses a different SD-WAN solution. The long term challenge that incumbent router vendors face is that most SD-WAN solutions replace the need for sophisticated routing protocols and so once network organizations are comfortable with these solutions, there is the potential that these organizations will decide to eliminate their branch office routers.
What are Network Organizations Saying?
As discussed in Which SD-WAN Implementation Options do Users Prefer?, the survey respondents were asked to indicate which implementation option their organization was most likely to implement and they were allowed to indicate multiple choices. The implementation choices were: Do-it-Yourself (DIY), acquire a managed service and acquire an SDN-based service from a Communications Service Provider (CSP). Just over half (54%) said that they would implement SD-WANs on a DIY basis while 42% said that they would use a managed service. The strong interest in using a managed service explains why the incumbent router, security and optimization vendors are putting so much emphasis on developing partnerships with managed service providers.
The survey respondents were also asked to indicate how their organization would likely approach the selection of an SD-WAN vendor and again they were allowed to indicate multiple choices. Their responses are shown in Figure 1.
Incumbent vendors have a lot of advantages. They have account teams that often have a long-term relationship with their customers and their customers have been trained to use the vendors’ solutions. Particularly when compared to start-ups, incumbents are notably larger and hence have more resources to devote to making customers aware of and accepting of their solutions.
Figure 1 contains a lot of data points that can be used to argue both sides of whether or not network organizations will move away from their incumbent vendors as the implement SD-WANs. As I look at Figure 1, two data points stand out. One data point is that only 6% of the survey respondents indicated that they would definitely stick with their incumbent vendor(s) and the second data point is that an additional 13% indicated that it was unlikely that they would stick with their incumbent vendor. The conclusion that I draw from those two data points is that if incumbent vendors aren’t very nervous, they should be.