In the aftermath of the significant shift in the work landscape following the pandemic, there are growing doubts about the relevance of software-defined wide area networks (SD-WAN).
For those who have closely observed the tech industry for years, it often seems that the quest for the next big trend is accompanied by a shift towards catchy abbreviations. In the realm of mobile technology, for example, each new generation—like the transition from 4G to 5G—renders previous advancements seemingly obsolete, irrespective of their continued utility. Similarly, in networking, there’s no substantive reason to dismiss well-established technologies that clearly deliver significant benefits—like SD-WAN—as mere legacy systems in need of replacement.
Some reports suggest that SD-WAN is outdated, giving way to secure service edge (SSE) as the next step in advancing network security, ultimately leading to secure access service edge (SASE). However, such claims may be overstated.
In light of rising data traffic, increasing reliance on cloud applications, and evolving work models, organizations are finding themselves grappling with heightened network complexity and risk, prompting ongoing growth and innovation within SD-WAN. This includes cutting-edge enhancements like artificial intelligence (AI) integration and automation.
At its core, SD-WAN remains a vital element of enterprise networking and security frameworks. It is integral to the integration of advanced security measures exemplified by the SASE model, which combines managed cloud security with comprehensive network protection.
To understand the current status of SD-WAN, we should reflect on its development over the past five years, shifting our focus from acronyms to business priorities and the tangible value SD-WAN provides—shaped significantly by the Covid-19 pandemic. Companies that already operated in a distributed manner were investing in relevant infrastructures to align with future needs long before the pandemic, but Covid-19 accelerated those initiatives, creating an unprecedented reliance on business networks to maintain continuity and facilitate new hybrid working models.
Transitioning from Legacy Networks
Take the example of Darling Ingredients, a global leader in sustainable food production. Prior to the pandemic, Darling had begun migrating its sites from legacy multiprotocol label switching (MPLS) networks to SD-WAN. Following the onset of lockdowns, the adoption of SD-WAN surged over nine months as the company adapted to new business realities. By switching to SD-WAN, Darling Ingredients gained access to increased bandwidth at reduced costs, unshackling itself from the pricing constraints associated with its previous MPLS providers. This freedom allowed the company to seek out the best market options for bandwidth. Additionally, SD-WAN enabled Darling to route all Microsoft Office 365 traffic through its infrastructure supplier’s network rather than the open internet, resulting in a more consistent user experience for critical voice and video applications.
The acceleration of cloud computing adoption has strengthened demand for SD-WAN. Even before March 2020, organizations were seeking improved connectivity and network resilience, needs that have only intensified since then. As we look ahead to 2024, key factors propelling global SD-WAN investments include the need to optimize network connections to cloud-based applications and enhance overall security. Post-pandemic, SD-WAN technology has continued to evolve.
Research conducted by GTT Communications in May 2024 highlights the crucial role of SD-WAN in improving cloud service connectivity and ensuring access to essential resources that drive productivity and operational agility, all while enhancing cybersecurity measures in the face of evolving threats.
Focusing on Optimization and Security
According to GTT’s study, the primary motivations for current SD-WAN implementations are to optimize network connections to cloud applications (86%) and bolster security (81%). Nearly three-quarters (73%) of organizations report increased network complexity, leading them to recognize the network’s growing importance in a distributed business environment that connects various cloud locations.
Interestingly, 90% of organizations view enhancing cybersecurity as the main reason for adopting SD-WAN, with slightly fewer North American organizations (83%) echoing this sentiment. An intriguing statistic reveals that 80% of organizations are prompted to regularly upgrade their SD-WAN offerings within two years, with a third of these doing so annually.
This focus on security is also evident among decision-makers in IT, operations, and networking for companies generating over $100 million in annual revenue. All surveyed expressed intentions to integrate security into their SD-WAN deployments, whether through a multi-supplier strategy or a cohesive single supplier model.
Tom Major, Senior VP of Product Management at GTT, emphasizes the importance of managed SD-WAN as a foundation for organizations that are becoming increasingly digital and data-driven. He notes that rapid innovation and security integration through frameworks like SASE are prompting quicker reviews and upgrades of their solutions.
In addition to tracking technological advancements, it is essential to consider how SD-WAN implementations are evolving. Major suggests that managed service providers (MSPs) are well-positioned to assist organizations in adapting to these changes, addressing ongoing technological innovations, and managing the complexity of choosing appropriate networking, security, and connectivity solutions that balance cost, performance, and security.
Bob Laliberte, principal analyst at TechTarget’s Enterprise Strategy Group, corroborates this perspective. He notes a significant trend of organizations preferring to consume SD-WAN as a managed service. An April 2023 study by Enterprise Management Associates indicated a rise in enterprises utilizing managed SD-WAN services from 62% in 2020 to over 66% in 2023.
“They’re accustomed to consuming networking as a service, like MPLS links and other offerings,” he explains. “Moreover, they prefer not to deal with multiple bandwidth providers, particularly in a highly distributed global environment, so outsourcing that responsibility to a telco or an MSP makes more sense for them.” He describes this relationship as co-managed, emphasizing organizations’ desire to establish policies regarding application prioritization.
In a survey conducted by Aryaka, just weeks prior to the Enterprise Management Associates report, respondents indicated that economic uncertainty was impacting network and security investments, yet CIOs, CISOs, and IT leaders remained committed to bolstering cloud investments, further witnessing an increasing shift towards both SASE and network as a service (NaaS).
Aryaka’s findings underscored the decline of MPLS and the pressing need to consolidate complex supplier ecosystems, highlighting NaaS as an emerging solution to address the challenges of an increasingly fluid work environment.
Aryaka’s research also pointed to SD-WAN’s advantages, such as cost and time reduction, agility, and efficiency from managed solutions. However, potential deployment barriers were identified, including choosing between single or dual suppliers, implementation complexities, and migration strategies.
Relating to the managed model of SD-WAN, Laliberte adds, “By controlling the policies that are executed while allowing the managed service provider to handle upgrades and interactions with internet service providers, organizations can mitigate management challenges, enabling them to focus on ensuring optimal performance for their applications.”
The Future of SD-WAN
According to ESG studies from 2023, SD-WAN is set to play a pivotal role in supporting remote and hybrid workforces moving forward. A staggering 89% of firms surveyed intend to utilize SD-WAN for their remote and hybrid workers, with just 4% already doing so. Notably, businesses do not foresee significant capital expenditures, with 50% stating they are “more likely” to implement SD-WAN with existing hardware, and 48% being “somewhat more likely.”
Looking ahead, discussions on the direction of SD-WAN invariably return to familiar abbreviations and jargon. In enterprise networking, MPLS is falling out of favor, while technologies like SSE and SD-WAN are stepping stones towards SASE implementation, with more organizations transitioning away from on-premises data centers in favor of cloud solutions.
ESG projects that SSE will guide SASE initiatives. Their 2023 research indicates that 58% of businesses will prioritize SSE in their SASE strategies, while 36% are starting with SD-WAN. The need for direct cloud connectivity to services like AWS, Google Cloud Platform, and Microsoft Azure is the principal motivator for adopting SD-WAN, followed by requirements for integrated security and networking solutions at branch locations. Only 3% of organizations have either adopted or plan to adopt a fully integrated SASE approach from the outset.
Laliberte of ESG concludes with a prediction that SD-WAN will remain relevant for the foreseeable future. Given the actual needs of enterprises, it’s hard to disagree.