Disruption in the Telecom Sector

By Doug Farndale, Vice President, APAC Silver Peak

Designing IT solutions for the telecom industry is not the same as it used to be before. Telecom companies have already shed their traditional tech practices in favor of modern machines that are more efficient and cost-effective. What business have planned for their customers and partners are very different from the days of legacy applications? Today, making fast changes in business environment is a necessary step to venture into the new world of technology driven by the digital revolution. In the digital era, think how companies can re-imagine their traditional boundaries and value proposition of their industry? When trying to effect a digital transformation on a large scale, companies are bound to face a number of challenges unique to their organization setup. How efficiently can they adapt to the new business continuum will not only decide their future course, but also their ability to stay ahead of the competition.

Disrupt or be disrupted. That was a recent message from an outgoing CEO of an international tech giant. The message is short but clear: the business climate is changing and you can either change with it, or become irrelevant.

That has certainly been the case in networking and telecommunications, where the explosion of cloud services and mounting frustration surrounding the high cost and inflexibility of multiprotocol label switching (MPLS) networks is forcing enterprises to rethink their enterprise wide area network (WAN) strategy.

Companies are now looking to the Internet to augment or replace their current WAN connections, which has opened the door for faster WAN provisioning and the ability to use multiple WAN paths at the same time. This WAN transformation is being referred to as the software-defined WAN, or SD-WAN.

Why is SD-WAN so disruptive? As an overlay technology, it enables customers to rapidly and non-disruptively augment or replace their MPLS networks with any form of Internet connectivity. It provides visibility into all applications, and the capability to centrally-control all WAN traffic. It ensures end-users are satisfied with consistent and enhanced application performance. Finally, it can dramatically lower connectivity, equipment and network administration costs by up to 90%.

But is SD-WAN a friend, or a foe, of the telco?

At a first glance, it could easily be viewed as a competitive threat. After all, the objective of most implementations of SD-WAN by enterprises is to offset the cost, rigidity and lack of control typically associated with MPLS. And, for most service providers, MPLS is a huge source of revenue.

However, if you look a bit closer, one could argue that SD-WAN could very well become the telco’s best friend. First, you start with reality. The rise of SD-WAN is already happening among global enterprises that want to leverage broadband Internet to augment or replace their existing MPLS connectivity.

Companies like memory products leader Kingston Technology and global manufacturer Interroll have already started to “broadband their WAN” with SD-WAN technology, and are now benefitting from a lower cost and more agile network for their operations in Asia and across the globe.

With most telcos continually looking to differentiate their business and provide value to their customer base, SD-WAN can be their new, differentiated solution, delivering SD-WAN as a managed solution or as part of a network functions virtualization (NFV) offering.

SD-WAN technology gives the telco a flexible software platform for delivering enterprise customers with a variety of virtualized network functions. By leveraging SD-WAN technology, telcos can offer these differentiated services to customers, maximize operational efficiencies, and introduce new revenue-generating services faster and easier than ever before. It can also set them apart from service providers who resist the SD-WAN trend or are trying to derail it.

If companies are already moving to an SD-WAN or possibly a hybrid WAN where they augment MPLS with broadband, which provider do you think has the advantage? The one who can deliver a solution that fits a need, or the one clinging to the old way of doing things and resisting the evolution of the market?

By adding SD-WAN to the mix, it can translate into building a customized WAN service portfolio that includes managed WAN optimization, virtual private networking (VPN), compression/de-duplication, and path conditioning services.

When leveraging the right, complete solution, an SD-WAN solution can provide automated licensing to help get new and innovative services to market quickly, which in turn means a faster time to revenue. Other benefits include per-instance tracking and metering of end-user customer usage to allow for easy and accurate billing.

The bottom line is that the rapid adoption of cloud technologies and software-as-a-service (SaaS) applications are leading enterprise customers to use network resources in new ways. For telcos looking to augment their existing business with new and innovative managed services, or NFV offerings, SD-WAN is a logical choice, not something to fear and/or resist.

Quote - The rise of SD-WAN is already happening among global enterprises that want to leverage broadband Internet to augment or replace their existing MPLS connectivity