SD-WAN: The case for independent 'managed overlay' services


According to IDC, over the 5-year period from 2017, it’s forecast that SD-WAN sales will grow at a 69% CAGR, hitting upwards of $8.05 billion in 2021. A third of all enterprises will be renegotiating contracts for WAN services within the next 3 years as existing agreements come up for renewal. Unsurprisingly, SD-WAN is now a key consideration amongst these decisions.

As the industry matures, two distinct SD-WAN delivery models have emerged: “managed overlay” offerings, that are deliberately disaggregated from the underlying transport, and more recently, “carrier-based” offerings. Within these two groups there are further important distinctions, but the crucial difference between the two is the ownership of the transport: is the SD-WAN service provider invested in the transport, or not?

Carrier-based providers: the traditional approach

These traditional telco companies have held the high ground with MPLS networks for a long time with most large corporates locked into multi-year contracts. As MPLS loses favour and SD-WAN becomes the de-facto cloud solution for enterprise networking, carriers, albeit rather late to the party, are now offering SD-WAN and Hybrid WAN managed services too. And not surprisingly, given the high levels of interest an adoption of SD-WAN, are keen to hang on to their customers. Most have bought or designed their own SD-WAN products, so will typically offer one, or at best two, alternative technologies.

Managed Overlay providers: the new challengers

These companies, like Xalient, are the new kids on the block that have disrupted the marketplace and emerged to challenge traditional carriers – with the distinct advantage of being independent,  ‘born in the cloud’ so no legacy to worry about, nor need to cannibalise existing contracts, and often with experience in successful SD-WAN deployments ahead of many of the traditional players

Which type of provider is best?

A recent Gartner US-based survey showed that SD-WAN early adopters (of which the US has a much higher number than Europe to date) found that getting SD-WAN services from their traditional carrier didn’t actually deliver the highest returns – only 30 percent of respondents said they preferred SD-WAN delivery through a carrier or network service provider. So why is this?

The answer lies in the very essence of SD-WAN technology. It’s designed to meet the ever-increasing demands for bandwidth, the reducing reliance on private networks and associated increase in the use of the public internet, and to provide that connectivity at the best rate, wherever in the world it’s needed. It provides the ability to aggregate links from diverse carriers into a single WAN. This gives more choice than ever in how you can provision connectivity into a branch as well as paving the way to connectivity that is both redundant/resilient and affordable, in more locations, faster than ever before.

That means for a global enterprise it’s possible to have over 20 or so carriers at any one time, dynamically selected to match your organisation’s footprint and business demands. An MSP can select the best carrier based on cost, performance and outages and dynamically select which route to choose to get you from one point to another – without your knowledge or involvement. They manage this for you, taking out any complexity, manage migration from old to new contracts, and can take on management of existing MPLS contracts as many companies won’t want to move lock, stock and barrel to SD-WAN in one go. Transport savings can be made – something carriers are less incentivised to want perhaps?  Transport, now disaggregated, becomes a commodity. A single carrier-based service can offer its own transport of course, and in a single seamless service, but you may find your carrier relies on resellers, for example, to supplement its network as it’s unlikely to have suitable high-grade connectivity in every location worldwide.

Do you need multiple carriers in your SD-WAN solution?

Well, it depends. If you’re a single country operation, with sites that match readily with local carriers, and have no plans to move outside of that territory, then transport may not be a consideration. It may be that you still want the other advantages SD-WAN delivers. If this is the case, can a ‘managed overlay’ partner, like Xalient, add value through its independence?

The answer is yes it can. They can help you navigate the whole transformation journey, utilising deep knowledge of the solutions on offer, and of the carriers’ marketplace,  guide you through the entire design, product and carrier selection, POC’s, contracts, implementation, and finally, management of your new solution. Their independence sets these providers apart and enables them to build a customised global network solution and deployment path that’s right for each customer.

For global enterprises, the situation is fundamentally different. In our view, buying a global network service from a carrier, even a “modern” hybrid network with SD-WAN, if it’s attached to a commitment to buy private bandwidth or utilise a single carrier, will have its pitfalls. Primarily, enterprises need less private bandwidth than ever, yet demand more overall bandwidth than ever – being tied to a single traditional global carrier severely limits options. Where private bandwidth is needed, there are better ways to buy it.

The bandwidth market is increasingly dynamic.  Using in-country broadband products allows the enterprise to tap into the constant price reductions and bandwidth increases that are available with these offerings. As new technology offerings become available (5G mobile for example) these can simply be swapped out of the underlay without impacting the network design.

Global or Regional: A compelling case for Independent Managed Overlay SD-WAN

So, if you’re a dispersed, global enterprise then the “managed overlay” provider route is compelling; allowing you to fully realise the benefits of SD-WAN whilst letting you still use private connectivity where it’s needed by leveraging carrier independent services. If you’re an in-country local organisation, all the benefits, other than those relating to multi-carrier transport, remain and are equally compelling.

Ultimately, having the ability to choose the best SD-WAN vendor to meet requirements, without being restricted by the carrier’s offering will offer all companies the best commercial and technological advantage.




Author: Gary Dudbridge
Copyright Gary Dudbridge 2019