Gartner Blog Network


A New Chapter in Managed WAN Services

by Andrew Lerner  |  September 13, 2016  |  2 Comments

Outside of North America, most enterprise do not manage their own WAN edge devices. They rely on carriers, systems integrators (SIs) and managed service providers (MSPs) to manage their branch edge devices to a large extent. This is very different in North America where many enterprise do manage their own WAN equipment. Given all the recent hype surrounding the WAN, including SDWAN, NFV and vCPE (CORD, anyone?), I asked Bjarne Munch for a blog/Q&A on the ramifications of these technologies to the managed WAN services industry (Note Lisa Pierce also contributed).

Q – What do you think about SDWAN, NFV and vCPE as it relates to managed WAN services?

A – We are on the brink of one of the most dramatic changes in WAN services that we have seen in decades. Actually, the last major change took place in the late nineties when MPLS-based WAN services started cannibalizing Frame Relay.

In developed markets, clients with flexible, reliable, high bandwidth access like Ethernet will be able to obtain new software-based WAN services from a broad array of providers—from traditional carriers, to Managed VNOs, SIs and even OTT players.  At the same time, some clients who primarily employed managed WAN services to support small sites may rethink this, and opt to buy and operate SD-WAN products themselves.

Q –Should enterprises even care, or is this “under the covers”?

A – We are now seeing most providers evaluate technologies such as SD-WAN and NFV as new editions to and extensions of their existing WAN services. Vendor Marketing from providers is soon going into overdrive, as one might expect, touting abounding enterprise service benefits.

For many providers, the ‘real’ reason for this push is to increase their margins and subsequently shareholder return. However, there are some likely trickle-down benefits to the enterprise that are worth serious attention:

  • The migration from hardware-based solutions to software-based, which reduces capital outlays.
  • NFV and Software-based services can provide greater functionality and flexibility, at lower prices, than can legacy services.
  • Providers also want to introduce ‘Software-Defined’ concepts into their operations through their entire service delivery chain, which can reduce the amount of time and manual intervention needed to provision or modify services.

Q – I’m skeptical of the ‘trickle-down’ effect, can you elaborate on that?

A – While providers may be able to lower their expenses, it’s not a given that this will automatically lead to a reduction in their service fees, although we obviously recommend using this as leverage in contract negotiations. However, what is really interesting is that as the providers increasingly integrate and automate their service delivery processes it not only will reduce their man-hour expenses, it also means they can deliver services faster, make changes faster, will fewer errors, and in a safer manner than traditionally.

My take:  You’ll definitely get agility, but don’t hold your breath on legacy providers voluntarily decreasing WAN prices.

Q – Do you anticipate any challenges?

A – Provider offerings will emerge gradually and it’s going to be just as new to the providers as it will be to the enterprise. This likely also means that there will be some failures, so, stick a toe in before you jump!

Q – Any “official” prediction(s)?

A – By 2020, at least 30% of international enterprise WAN service contracts will incorporate NFV-based services, up from less than 1% in 2016, which comes from this (just-published) research:  Network Function Virtualization Will Enable Greater Managed WAN Agility and Flexibility, http://www.gartner.com/document/3388364

 

Category: carriers  guest-blog  just-published  networking  sd-wan  

Tags: carrier  cord  nfv  sdwan  vcpe  

Andrew Lerner
Research Vice President
4 years at Gartner
19 years IT Industry

Andrew Lerner is a Vice President in Gartner Research. He covers enterprise networking, including data center, campus and WAN with a focus on emerging technologies (SDN, SD-WAN, and Intent-based networking). Read Full Bio


Thoughts on A New Chapter in Managed WAN Services


  1. I agree with these points! But, users should be aware of the downsides of SD-WANs, such as the 25% bandwidth tax that their tunnel based approach take. For more details, see http://talkingpointz.com/sd-wans-the-bad-and-ugly/

    • Andrew Lerner says:

      Thanks for reading/posting. One thing to point out regarding the “bandwidth tax” is the assumption of 160 byte packets. That is a huge assumption, and swings the Tax % wildly. In my experience running real-world enterprise production networks, average packet sizes are in the 400-500 range (although I haven’t done it since 2013). Other folks such as Greg Ferro of the packetpushers have it at 576 (granted this is from 2010 – http://etherealmind.com/average-ip-packet-size/). Bottom line is I’d like to see more data on why 160 was picked… If anyone has recent research on average packet sizes in real-world networks, please post…



Leave a Reply

Your email address will not be published. Required fields are marked *

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.