Tuesday, November 29, 2016

Future of SD-WAN and the Value Chain

Office and business campus locations utilize WAN, or Wide Area Network(ing), for connectivity to other business locations as well as to Data Centers.

There's new technology that is poised to replace the legacy of routers and interesting circuit and protocol types.  It is called SD-WAN, or Software Defined - WAN, and is used to apply software rules and network functions (sometime virtualized) to provide more instant gratification in the area of Wide Area Networking.

Of the things that can be done with SD-WAN, one of the more interesting is a combination of two delivery methods, like traditional WAN using MPLS and broadband Internet (similar to what you might have providing internet service to your home).  This combination, called Hybrid-WAN and using special protocols (read this as non-standardized and highly proprietary) running on the WAN device can provide 
  • higher availability at lower run cost through the use of broadband internet
  • secure connected perimeter with direct internet offload reducing the cost of internet access
  • more direct interconnect to services like AWS and Azure avoiding the hairpin in the Data Center
  • attachment to vendor ecosystems that sell services like SaaS, VoIP, storage, backup, etc.
  • enhanced security services within the SD-WAN provider's cloud
What is even more interesting is the trajectory of this particular technology.

Figure 1.  SD-WAN WardleyMap for 2015
In 2015, this technology was arguably in the Genesis phase of the Value Chain.  There were some initial entrants to this capability, but it was mostly laboratory exercise to determine the art of the possible.

Figure 2.  SD-WAN WardleyMap for 2016

There was a rather dramatic series of changes that happened in 2016.  The viability of the individual vendor solutions started to show through in the market and even major telecommunication vendors started to take note of it.  

Early in 2016 a major telecommunications company even announced their support and pending availability of SD-WAN in the form of a Utility service model.  Others followed. This shifts the financial mechanism toward commodity.  

Late in 2016 some of the early adopters of SD-WAN stated publicly that they no longer had a need for traditional WAN deployments.

Figure 3.  SD-WAN WardleyMap Prediction for 2017
My prediction for SD-WAN in 2017 will be a complete commoditization and Utility release of SD-WAN by every major player in the Wide Area Networking space, if not the announcement of partnership with companies that have this capability.  

This doesn't mean that the undercarriage of the service will be 100% utility though.  This first step will provide the means to change the usage behavior of the WAN consumers and not necessarily the underlying components.  It will erode parts of the current business model and there is still plenty of movement available to the providers to eek out more efficiency as the technology evolves toward commodity.

What happens after that is probably more interesting.  I've a feeling this is simply a stepping stone to the next WAN delivery model.    The telecommunication carrier's network is undergoing a significant technology change with a base in Network Function Virtualization (NFV).  


As this rolls out and reaches maturity, the carriers will learn that they can provide many of the services in their "Carrier Cloud" that their customers currently solve with hardware and appliances and take up data closet and Data Center space with, in a monthly Utility model.

Once that happens, there may be few reasons left to maintain WAN equipment at a site, where a simple ethernet hand-off and network functions in the Carrier Cloud at a monthly Utility cost will suffice.

My one single hope is that, as the carriers are developing and modernizing their infrastructure and capabilities, they don't forget the consumer.  With all of the Software Defined Networking (SDN) and Network Function Virtualization (NFV) in play today, I hope at least some of their APIs are pointed in our direction.

What does the extreme future hold?

http://www.abusedbits.com/2016/11/carriers-could-eat-wan-and-more.html

If this is the case, I think we live in interesting times and not the proverb with similar words (1).

1 - https://en.wikipedia.org/wiki/May_you_live_in_interesting_times 

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