Your best strategy to launch profitable SD-WAN Services
Apr 7, 2017
By 2018, SD-WAN will be adopted by 60% of enterprises as a critical component of remote branch connectivity according to IDC Futurescape predicitons. Enterprises are looking to achieve massive cost savings by moving traffic from MPLS to the Internet, but not only that, they are also interested in providing better support for high bandwidth applications, simplifying traffic management and accelerating the deployment of new branch locations.
With enterprise applications moving to the cloud, SD-WAN is well positioned to facilitate this transition – driving a predicted decline in IP VPN revenues in developed markets.
How will you [Service Providers] make money in this environment?
For many, the answer seems inevitable: offer SD-WAN as-a-service. But unfortunately, it is not that easy. SD-WAN service revenues won’t easily offset the predicted revenue loss from IP VPN services.
In order to drive additional revenue and growth, SPs must address additional needs of their enterprise customers. This requires them to take a more comprehensive approach by integrating additional services with their SD-WAN offering, such as security, WAN optimization, and analytics/visibility, and just as importantly, seamlessly integrate SD-WAN with their existing IP VPN offering.
An issue to address by the Managed Service Providers is the transition of the existing CPE installed base. Most SPs will start deploying SD-WAN capable CPEs in new locations and update the existing sites with the periodic refresh (renewed every 4 to 6 years). According to Gartner, by 2020, around 50% of the managed CPE refresh will include SD-WAN and this brings a smooth transition towards SD-WAN capabilities and additional value-added services.
The result: happier enterprise customers with a much better end-user experience, thanks to the ability to add capacity, performance and security to their branch office locations.