In a world of digital transformation, Enterprises are increasingly more dependent on technology and WAN connectivity for success. As Service Providers look to better meet Enterprise customer requirements, they may find that the lessons learned in a recent home computer project, just might help them to better support their Enterprise customers and simplify their network as well.
In the next 18 months, 65% of enterprises are planning to migrate to SD-WAN services according to a recent IDC survey in Western Europe and North America. 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?
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Many enterprises are attracted by the promise of huge cost savings by SD WAN compared to MPLS. A recent qualitative survey among enterprises showed interesting results: Expectations vs Reality of SD-WAN
Most SD-WAN implementations are based on a small physical CPE with multiple network interfaces. Technically, a virtual or a physical CPE implementation works fine, and when cost is the main requirement, the physical platform tends to win.
With the fast adoption of SD-WAN, many SPs are trying to understand their role in future enterprise connectivity. Will MPLS IP-VPN be completely replaced by SD-WAN? Will SPs become simply low-cost undifferentiated capacity?