What about Telcos? Is SD-WAN friend or foe?
It is said that Communications Service Providers bring in approximately $40 billion doing business-to-business sales of WAN services such as MPLS, frame relay, Ethernet, Internet, T-1, and leased lines. For most service providers, MPLS makes up a huge chunk of the revenue pie. At first glance, SD-WAN could easily be viewed as a competitive threat to communications service providers. After all, the objective of most implementations of an SD-WAN by enterprises is to offset the cost, rigidity and lack of control typically associated with MPLS. And, for most service providers, MPLS is a huge source of revenue.
However, if you look a bit closer, one could argue that SD-WAN could very well become the telco's best friend.
For forward-looking telcos that continually look to differentiate their business and provide value to their customer base, SD-WAN can be their new, differentiated solution, delivering SD-WAN as a managed solution or as part of a network functions virtualization (NFV) offering.
SD-WAN technology gives the telco a flexible software platform for delivering enterprise customers with a variety of virtualized network functions. By leveraging SD-WAN, telcos can offer these differentiated services to customers, maximize operational efficiencies, and introduce new revenue-generating services faster and easier than ever before. It can also set them apart from service providers who resist the SD-WAN trend or are trying to derail it.
In essence, with the rise of SD-WAN, businesses are no longer confined to MPLS as they can use enterprise-grade broadband Internet to replace, or augment, their existing corporate WAN connections. And while SD-WAN provides significant cost savings, flexibility and enhanced performance for businesses compared to MPLS, SD-WANs are not, by default, a threat for telcos. Forward-looking telcos should embrace SD-WAN to offer differentiated, managed services to customers.
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