In this blog, we share some of the findings of our ongoing research on the SD-WAN market and the various categories of players.  In published research, Appledore have predicted:

  • Growth of CSPs’ market share providing SDWAN managed services
  • CSPs employing SD-WAN to anchor a new “Dynamic Enterprise Edge”
  • Consolidation of the SD-WAN technology (suppliers) market
  • Entrance of management (Service Orchestration) firms with solutions intended to automate the delivery of a family of related and sometimes inter-dependent dynamic services
  • Maturation of SDWAN technology with a critical mass of features developing, below which suppliers will be increasingly non-competitive

The market is validating our predictions

We now have the opportunity to validate and update these predictions based on continuing primary research, now roughly 12-18 months after we began our project.  Updated information comes from in-depth discussions with the four key sets of players – major enterprises, major CSPs, leading SDWAN suppliers and orchestration/management suppliers.  It is evident from multiple sources that early technology was immature, but current solutions are dramatically more mature. It is also evident that SDWAN suppliers are focusing more of their efforts at CSPs as a channel via managed services.  This demands that they support:

  • True multi-tenancy
  • Large scale, with potentially 1000s of endpoints per tenant
  • Rich API integration northbound, for both assurance/analytics and for fulfillment/orchestration
  • Sufficiency in both routing and application-aware traffic steering
  • Integration to managed (e.g.: LSPs) and QoS features sets for hybrid and un-managed (Broadband Internet)

Notable data points include the acquisition of Talari by Oracle, and the subsequent effort to expand Talari’s focus to more directly target CSPs as customers/MS channel partners, and the strong showing of Nuage networks who appear to be delivering the majority of their SDWAN business via CSP partners/customer, with a large a growing roster.  Nokia does not however provide granular data, so we must rely on our own research and “triangulation”.

Notable examples of SD-WAN suppliers’ maturing products and market focus:

Nokia Nuage in fact has packaged up their view of what the next-generation (current generation?) of SDWAN must be, when compared to earlier systems, which we use for illustration. Building on top of Appledore’s published “minimum definition of SD-WAN”, Nuage’s definition broadly includes:

  • Multi-cloud, including multiple underlay technologies, multiple public cloud resources, and awareness of dynamic workloads that may traverse an of those.
  • Flexible Models for VAS, loosely translated means the ability for a CSP to deliver dynamic, on-demand services whether that is security, DC hosted apps, or “advanced” networking capabilities.
    • We should note that “advanced” is becoming more common among leaders, consistent with our thesis that the market is consolidating with a raised bar for the leading winners.
  • End-to-end security, including the ability to transit domains with a single controller and set of security & encapsulation rules, as well as visibility of threat patterns, and segmentation to isolate and prevent the spread of any infection.

Success is not just about technology, its about management and branding too…

Nuage are also in the process of launching a revised user (enterprise) portal. Why is this important? Because it emphasizes the commitment to the CSP segment with the ability to expose individual views to multiple enterprises from a multi-tenant system. The multi-tenancy, which I have seen first-hand, goes deep into branding, role-based permissions,, segmented networks and data, and the ability to provide extensive API integration into each enterprise without impacting the base system which, not doubt, has parallel integration into the CSP’s OSS and BSS.  This (in one aspect of the SD-WAN solution space) is the level of features we believe are necessary for the CSP delivery segment to thrive.

Out intent here is not to endorse one vendor’s solution set over another, rather, this definition provides a simple set of categories that are useful in describing sets of features that have heretofore appeared piecemeal and differentiators.  Some vendors are stronger in one are vs another, but we do see general consolidation toward a new minimum set of capabilities.

The Bottom Line

What does this mean?  It means that SD-WAN is moving from an enterprise-focused, pure overlay technology with very loose coupling to other technologies and to the underlying network.  As it matures, it is rather one component of an integrated set of services, either sourced commonly or disparately. CSPs will certainly push the benefits of a managed portfolio (tight integration, simplicity, accountability, synergies), while others may emphasize the advantage of true independence and the ability to maximize the performance over highly disparate underlay networks – e.g.: Appledore’s concept of RAIN – a Redundant Array of Inexpensive Networks.

This is good. Competition improves the breed.

We refer interested readers to our growing library of Market Outlook reports and Solution Profiles, where you can draw your own conclusions from our detailed analysis of features and capabilities.