“Adoption of cloud services – infrastructure as a service (IaaS), SaaS or platform as a service (Paas) – continues ramping up among enterprises of all sizes and across geographies. … Gartner forecasts global spending for public cloud services to grow at a five-year compound annual growth rate (CAGR) of 16.6% in constant currency.[1]

Cloud, or Managed Services enables companies to focus scarce IT resources on business outcomes. According to Gartner, the “market size for cloud is growing exponentially, and cloud is projected to be a $317 billion industry by 2022.[2]

Many MSPs offer a broad range of solutions which can include:

  • Infrastructure and Platform as-a-service (IaaS and PaaS)
  • Managed Network
  • Managed Voice, Unified Communications, and Contact Center as-a-service
  • Managed Desktop
  • Managed Security and UTM
  • Managed WiFi
  • Managed Backup
  • Managed Print
  • Virtual CIO functions
  • Helpdesk
  • Hardware refresh
  • And on, and on.

All MSPs invest considerable time and energy in ensuring that their servers, applications, data centers and people are “always available.” The same amount of attention needs to be paid to managing customer connectivity connections as degraded or failed circuits will result in customer support and retention issues, together with increases in cost and decreases in monthly recurring revenue.

Bringing connectivity to the Data Center (DC) is viewed as a customer-driven activity, meaning that MSPs are relying on customers and carrier networks to deliver their customer experience.

However, the quality and performance of carrier networks, whether delivered as a managed network, unmanaged ethernet, or unmanaged broadband Internet, are outside of the MSP/SaaS Provider’s control.

This creates vulnerability in the MSP/SaaS service delivery and revenue process…

“[C]loud, as both a destination and an operating model, is driving a compelling need for network modernization and transformation. That need is felt perhaps most acutely on the WAN (wide area network), as enterprises adopting hybrid IT and cloud (IaaS and SaaS) seek to redesign their networks to accommodate distributed application environments and agile business processes.”[3]

MSPs may be tempted to partner with Carriers or Communications Services Providers to provide connectivity solutions for customers.

However, there are a couple problems with partnering with Carriers:

  • The MSP is enabling a competitor. While the Carrier may own network, Carriers are also growing managed services practices to reduce commoditization and avoid becoming “dumb pipe” or “just the network.” For an MSP, partnering with a Carrier enables a competitor. Bain and Company (2018) estimate that by 2025, more than 50% of telecom B2B revenue growth will have been derived from “Everything as a Service” (XaaS) models. As an example, Bain estimates that XaaS in the enterprise communications market will grow from $60B in 2016 to over $400B by 2025.
  • Carrier network connectivity is not cost-effective or ubiquitous. Most carriers have dead zones or regions in their network where bandwidth is constrained, either due to high demand (exhausting capacity) or low demand (no financial return). Businesses with geographically distributed offices, yards, or facilities will discover that a single carrier cannot reach all their sites. This is especially true if a business has operations in multiple countries, even in countries as close together as the USA and Canada.Although carriers often have wholesale relationships with each other, these relationships don’t extend to operational integration and process integration, creating service delivery problems. In the event of an outage or service change, a US carrier who owns the end-customer relationship cannot see into the dispatch systems of a Canadian carrier providing last-mile connectivity, service assurance or onsite support. An MSP relying on these carriers will have an end-customer with different experiences at each location and end up fielding customer complaints about outages and service assurance.
  • Mid-sized Enterprise customers are dis-satisfied with Carriers. In June and July 2018, Gartner surveyed mid-sized companies across the globe. [4] They found that Mid-size Enterprise companies are highlight dissatisfied with the large Communications Services Providers (CSP – the telecoms, cablecoms). Over 68% of respondents had problems with customer service, communications, processes and timelines, while 31% had cost and business outcomes problems.
    • 47% Poor customer service performance
    • 22% Poor governance and communications that drive up service transition and deployment costs
    • 18% Higher than expected cost
    • 13% Service not supporting pursued business outcomes
  • Main areas of dissatisfaction included:
      • 12% Hidden costs from service production activities not covered in contract
      • 10% Service providers’ lack of proactive service evolution and continuous improvement
      • 10% Insufficient support capabilities at a country level (as example, need to work with regional partners)

Gartner suggests that these downfalls present an opportunity for mid-sized MSPs to differentiate and open up new market opportunities. MSP can differentiate from the Carriers by adding Managed Network Services to their product offerings and targeting vulnerabilities in Carrier operations.

Specifically, Gartner suggests that mid-sized MSP offer Managed Network Services and during procurement processes ensure diligent, timely and precise answers to questions and changes and lead the opportunity with customer-centric, innovative and creative approaches. MSPs need to provide the flexibility and focus that large Carriers cannot and will not provide.

“Providing clarity on the split of responsibilities between the provider and customer will help midsize managed service providers show they can be a trusted partner.” [5]

It is for these reasons that implementing a private SD-WAN platform is the most logical choice for MSP and Cloud Service Providers.

Solution: MSP-owned Managed SD-WAN

Software-defined wide-area networking (SD-WAN) is a specific application of software-defined networking (SDN) technology applied to connectivity between branches, regional offices, headquarters, cloud services, and data centers. It typically uses any available circuit type such as fiber, broadband internet, 4G, LTE, or MPLS and often aggregates the bandwidth of these to provide resilient connectivity and bigger bandwidth.

MSPs should adopt SD-WAN as a new Managed Service to complement their existing capabilities.

“SD-WAN favors decoupling the procurement of transport and service management, widening the opportunity for smaller managed service providers to challenge large network-based providers.” [6]

Techwire Asia reports that the SD-WAN infrastructure market has grown to be highly competitive, with sales increasing 64.9% in 2018 to US$1.37 billion.

Gartner forecasts that “enterprise spending on managed SD-WAN services will grow at an 84.7% CAGR through to 2022 to become a $4.6 billion market.” [7]

MSP and Cloud Providers may be tempted to partner with a Managed SD-WAN provider to provide the software environment, the data centers, hosting and core networking as well as the service and support for that environment.

The challenge with this approach is that, while some Managed SD-WAN companies have great brand names and market awareness, their offerings simply duplicate Carrier offerings. Traffic going into the Managed SD-WAN environment goes into a black box. The MSP can’t see into that environment, nor can they manage it, control it or determine service intervals to support customer service. Managed SD-WAN providers are “Just Another Carrier.”

Neal Weinberg from Network World suggests that lack of control, lack of flexibility and lock-in are among the reasons to stay from a Managed SD-WAN solution. Almost immediately when SD-WAN became “hot”, carriers began to look at SD-WAN with dollar signs in their eyes. It quickly became apparent that SD-WAN could be used to lock service providers into binding agreements, while carriers took in a large portion of the proceeds from sales.

Multapplied’s SD-WAN frees Managed Service Providers from the shackles of the big Carriers by giving them:

  • Full control over pricing
  • Full control over the network
  • Full control over WAN paths
  • Subscription-based pricing
  • Visibility and control over the customer experience

Multapplied SD-WAN: Your Secure Onramp

Multapplied allows you, the MSP, to own and control your own Managed SD-WAN solution. Our open architecture platform that you can integrate into existing Operational and Business Systems to consolidate data and you can white label the SD-WAN and brand it as your own.

As an MSP, integrating Multapplied’s SD-WAN into your XaaS product and service portfolio gives your customers a “secure onramp” to connect to your cloud easily from any of their branches with always on-connectivity and gives you a branded, value-added service, that drives incremental revenue, margin and differentiation.

For an MSP, connectivity is everything, because without it your customers can’t access your hosted applications and business stops.

“The problem I have seen with many Infrastructure as a Service providers is that their offerings often don’t include anything pertaining to end user connectivity. And when they do, they don’t ensure that the connectivity is secure and reliable or deals with performance issues.”

– Philbert Shih, Managing Director, Structure Research

MSP can streamline application deployments using Multapplied’s white label SD-WAN solution as a single, secure “on-ramp” connecting all branch locations to cloud services and corporate headquarters. By taking this approach, service providers can extend the customer edge directly to the cloud. This can produce the following benefits:

  • Faster troubleshooting:

An MSP ultimately gains total, end-to-end visibility and over the customer’s WAN—and the freedom to use their own network and data centers. This allows the MSP to resolve issues much faster. When a customer calls to report a service issue, there is no need to consult with a third party provider—even when relying on them for last mile connectivity.

  • Bundled offerings:

The white label SD-WAN approach also gives the provider the freedom to bundle any type of voice, video, security or data replication service with SD-WAN. This can enhance per-client revenue, and keep customers “sticky.” In other words, they will be less likely to seek out third party providers for additional services.

  • 999% uptime:

Ultimately, your customers want peace of mind that their network applications will remain up and running—and you can deliver that with SD-WAN. Multapplied offers same IP-failover, so that if a link should fail, traffic will automatically switch over to another active link on the network. Multapplied, in fact, guarantees industry-leading 99.999 percent uptime.

  • Guaranteed application delivery/Secure On-ramp to your Managed Services:

One of the top issues that network administrators struggle with when managing a WAN is resource allocation. In an average enterprise, for instance, there are many different applications all competing for bandwidth. With SD-WAN, managers can prioritize traffic in order to ensure that business critical applications receive all of the resources that they need to function properly—and that all end users have access to fully-functioning applications.

  • Maximum bandwidth ROI:

To that point, businesses today are paying a premium amount for bandwidth. However, it’s largely being mismanaged and wasted. With SD-WAN, providers can help customers help customers maximize the return on their investment for the bandwidth they are paying for. They’re able to scale bandwidth up or down based on specific requirements. This is a powerful selling point.

  • Per-packet load balancing:

Further uptime and network stability can be provided for customers with per-packet load balancing across multiple circuits. This provides improved reliability, and sub-second failover.

Unlike Managed SD-WAN offers, Multapplied does not force you to use our network, or our data centers. As an MSP, you deploy Multapplied’s SD-WAN in your data centers and use it to “groom” or manage customer connectivity, whether Internet, fiber or a hybrid network.

Conclusion

Technologies like SD-WAN allow traditional MSPs to evolve their product offerings and become Hybrid MSPs, offering more value to their business clients through applications that target end-user use-cases.

Here are the key points you should be taking away from this whitepaper:

  1. MSPs may be tempted to partner with Carriers to solve customer connectivity problems. But:
    • Partnership enables the Carrier as a competitor to the MSP.
    • Carrier network connectivity is not cost-effective for all end-customers, nor is it ubiquitous across all geographies.
    • Mid-sized Enterprise customers are dis-satisfied with the large Communications Services Providers (CSP – the telecoms, cablecoms)
    • MSP don’t end up with the visibility and control they need to deliver on customer experience promises
  2. MSPs should adopt SD-WAN as a new Managed Service to complement their existing capabilities.
    • SD-WAN creates an opportunity for smaller MSP to challenge large network-based providers who may also have Managed Services of their own.
  3. MSP can help reach more customers with higher quality customer experience using and SD-WAN platform, such as the platform provided by Multapplied Networks, that they own, control and manage.

For more information about Multapplied and our white-label, wholesale SD-WAN platform for Managed Services Providers, please contact sales.

To Learn more about Multapplied’s Features, Click Here.

 

Nikhil Batra claims that “…enterprises are interested in easier management of multiple connection types across their WAN to improve application performance and end-user experience.”

He goes onto explain that “…given the rapid growth and support for SD-WAN by leading communications service providers globally, businesses seem increasingly interested in exploring SD-WAN deployments to tap into benefits such as dynamic management of hybrid WAN connections and the ability to guarantee high levels of quality of service on a per-application basis.”[8]

 

[1] “Market Insight: How to Capture Share of the Managed Network Services Market as a Midsize Provider.” Gartner, November 2018.

[2] “Report Highlight for Market Insight: MSPs Should Leverage ‘Cloud Winners’ to Succeed in the Rapidly Growing Cloud-Related Service Market.” Gartner, March 2019.

[3] Nikhil Batra, IDC’s Senior Research Manager (SOURCE)

[4] “Market Insight: How to Capture Share of the Managed Network Services Market as a Midsize Provider.” Gartner, November 2018.

[5] “Market Insight: How to Capture Share of the Managed Network Services Market as a Midsize Provider.” Gartner, November 2018.

[6] “Market Insight: How to Capture Share of the Managed Network Services Market as a Midsize Provider.” Gartner, November 2018.

[7] “Market Insight: How to Capture Share of the Managed Network Services Market as a Midsize Provider.” Gartner, November 2018.

[8]“IDC comments on the phenomenal growth and potential of SD-WAN. “ TechWire Asia, 2018.