The Software-Defined Wide Area Network (SD-WAN companies) market continues to be one of the fastest-growing segments of the network infrastructure market and offers a great opportunity for managed service providers to expand their service offerings:
compound annual growth rate (CAGR)
market size by 2023
* According to IDC’s SD-WAN Infrastructure Forecast
This growth is driven by a variety of factors.
It’s an exciting time for service providers to add SD-WAN to their portfolio — the right SD-WAN technology can help service providers deliver hosted, managed services with greater performance.
However, not all SD-WAN companies are created equal and some make it difficult for managed service providers to make a profit.
How to Select Between SD-WAN Companies for A Managed Services Business
When selecting an SD-WAN vendor, look for the right combination of business models and functionality that fits your specific use-cases. Take the time to figure out how you will market, sell and fulfill this new service and what business and financial goals you have.
10 Key Use-Case Questions:
- Do you want to increase the value of your brand or will reselling the service and brand from a larger OEM be sufficient?
- How many SD-WAN companies or resellers are established in your addressable market?
- How much competition will you face if you sell the same brands as 10-20 other distributors in your market? How will you differentiate your service?
- How much margin do you want/need to make?
- How complicated will the platform be to price, quote, and sell? Will your sales and quotation teams need to get up to speed with lots of detailed information or SKUs?
- Do you want to outsource the operation of the SD-WAN network to SD-WAN companies and be responsible only for customer acquisition? Or do you want to own, control, and manage the whole thing yourself?
- Do you get to own and operate the core nodes? How much will that cost?
- What is the customer revenue density of the core nodes? Can you oversubscribe them?
- What are the critical features you absolutely need? What are the nice-to-have features?
- Can the SD-WAN platform integrate easily to your network management system or other business systems?
If you are a service provider or large enterprise and you run your own network, these questions will help you start discussions and evaluations so you can best meet the needs of your organization.
The best SD-WAN companies & platforms for service providers and large enterprises typically:
- Provide affordable licensing options on a per-site basis
- Have no incremental costs for bandwidth
- Give unlimited core node licensing
- Are easy to quote so your sales teams and finance teams can support new SD-WAN sales objectives easily
- Have multi-tenanted core nodes that can run in existing virtual environments also optimize operational efficiencies
- Have over 90 percent efficiency in aggregating broadband, dedicated Internet, and wireless
- Use open standards-based, non-proprietary hardware
- Have open architectures and RESTful APIs to make integrating into existing operational and business support systems easy
SD-WAN Companies & Vendor Comparison
With over 80 SD-WAN companies & vendors offering various feature sets and benefits, selecting the right vendor can be a daunting task.
Below is a review of three popular vendors on Gartner’s Magic Quadrant — Cisco Meraki and Viptela, VMware SD-WAN by VeloCloud, and Silver Peak. The reviews specifically relate to how they perform from the perspective of a managed service provider.
- Broad range of SD-WAN platforms and complementary solutions such as security, LAN/WLAN, and application performance.
- With established sales channels, Cisco sells hardware and SD-WAN licensing through its Cisco and Meraki brands.
- Cisco moved its “legacy” Viptela SD-WAN code over to the IOS hardware platform to provide a converged environment. Gartner reports that this has had limited success and has encountered stability and scale problems.
- Cisco ISR hardware may also need upgrades to support Viptela due to throughput limitations.
- With both Viptela/IOS and Meraki offers in the market, Cisco complicates its offering – especially as the platforms don’t share a common management environment, have different hardware and licensing approaches, and different sales teams.
- VeloCloud was acquired by Dell/VMware which gives VeloCloud access to a vast customer base.
- Offers a range of deployment options for edge devices, physical or virtual, with optional cloud gateways and orchestration which can be cloud-based, MSP-hosted, or cloud-hosted
- Has some of the largest SD-WAN deployments and a wide range of channel partners selling their solution, including global Network Service Providers, VMware sales channels, and Dell sales channels.
- Lacks native advanced security functionality. Instead, it relies on partner firewalls on its platform or cloud security services.
- Requires WAN optimization and doesn’t have native support for IPv6.
- Strong application management including WAN and real-time traffic optimization. Its WAN optimization solution also can be priced as a subscription and shared across a domain.
- Gartner sees more channels and MSPs selling the Silver Peak solution, which speaks to expanding a number of channels and offers in the market.
- Lacks a full native advanced security suite. Instead, it relies on third-party firewalls or cloud security services.
- Edge offering lacks cloud gateways, requiring enterprises or MSPs to create these if required.
- Small footprint devices for small offices or branch offices are limited.
Why Multapplied SD-WAN is a Win-Win for Service Providers
One thing that Cisco Meraki and Viptela, VMware SD-WAN by VeloCloud, and Silver Peak have in common is the fact that none of them tailor their solution to the needs of service providers. Multapplied, on the other hand, is built solely for service providers.
With Multapplied SD-WAN, service providers can license a white label, white box SD-WAN software platform that gives them complete control.
With Multapplied, service providers gain access to unique technology and a new business model. Instead of reselling a vendor’s SD-WAN service, service providers can bring their own privately-branded SD-WAN service to the market. Multapplied is ideal for service providers that seek to:
1. Control SD-WAN Pricing and Markup
Multapplied offers the best value SD-WAN on the market, charging a flat rate per site (or per port) per month, rather than charging based on the amount of bandwidth used. Service providers only pay for what they use to generate revenue.
Multapplied core licenses are free so service providers can turn up as many core nodes in as many data centers as they need. Since Multapplied’s core nodes are multi-tenant service providers can get a high degree of customer revenue density on each node.
The best part of Multapplied’s pricing is that it allows service providers to control their own margins. Be effectively purchasing wholesale, service providers can control markup, bundling, and margins.
2. Access Multi-tenant Core Nodes
Multapplied enables service providers to scale their business with multi-tenant core nodes.
Multiple customers on the same infrastructure can leverage existing DC/VMs and reduce cost while also increasing customer revenue density on a service provider’s infrastructure. The multi-tenant core software also allows service providers to build external sales channels.
3. Gain Virtual CPE on White Box Hardware
Virtual CPE allows service providers to deploy more containerized services per CPE to be more efficient and flexible.
It also simplifies and accelerates service delivery with the ability to remotely configure and manage devices and allows customers to order new services or adjust existing ones on demand.
4. Improve Uptime with Bandwidth Aggregation
Multapplied offers an industry-leading >90 percent bandwidth aggregation. This gives you the uptime, bandwidth and cost performance that your customers expect. Link aggregation or bonding involves combining bandwidth from multiple carrier last-mile circuits into a single virtual tunnel per site for maximum uptime and performance.
5. Retain Infrastructure Control with Customization Ability
Many SD-WAN platforms lack the true customization ability that service providers require. As a result, service providers find themselves locked into using the vendor’s hardware, data centers, and network infrastructure. This means surrendering control of the service delivery to a third party.
With Multapplied, service providers on the network and network performance so they’re empowered with true ownership and control over the relationships with your customers.
Choosing the Best SD-WAN Companies for Managed Service Providers
SD-WAN should be a part of every service provider’s portfolio. It enables the creation of virtual networks that are not dependent on any proprietary hardware. This keeps the control firmly in the hands of the managed service provider.
While many technology buyers are tempted to make decisions based on brand familiarity, this approach may not deliver on the actual use cases, business requirements, or budget.
Beware of licensing models that appear cheap but include hidden charges in the form of support contracts or bandwidth-based pricing. Evaluate the cost of core nodes and determine whether the core nodes can support multiple end-customer sites to arrive at a true cost-per-customer. In this way, service providers can get a more realistic picture of profitability and a better understanding of provisioning and support costs.
Additionally, service providers should watch out for platforms that require the use of specific telecom networks or security platforms as they may restrict the ability to provide best-of-breed solutions that actually meet their customers’ needs.
SD-WAN is the next generation of business networks and its adoption rate is increasing rapidly for a reason.