There have been several big changes that service providers will have already made (if they’ve been around long enough). Starting in the late 90s, ISPs that made money by charging subscription fees, led by Demon Internet’s £10 a month service, had to quickly adapt to Freeserve’s subscription free model. The first big technology shift came in 2003 when some plucky ISPs took on BT and invested in Local Loop Unbundling, building their own Broadband networks and offering residential and business Internet services at higher speeds and lower costs than the incumbent telco. Happy days until the mid to late 2000s, when Sky, BT, Tiscali (now Talk Talk) and AOL created a residential Internet price war that pushed nearly all other smaller providers out of the residential market, making them focus on businesses who so far had been working with networks based on leased lines.
Around this time, businesses were going online in a big way, with digital transformation affecting both their internal operations, and the way they dealt with customers - and creating the background requirement for SD-WAN, although it didn’t seem so at the time. The need for a business’s locations to be online and communicate securely grew significantly, and to meet this need service providers created product sets and enhanced their networks to offer quick and easy VPNs (virtual private networks) using technology called MPLS. MPLS quickly became a business staple, but came with a subtle downside for the customer: service provider lock in. If you wanted to add a new site to your business, you really had to use the same provider that serviced the rest of your network. If you got a good, fast and efficient service from your existing provider, no problems. But if the relationship broke down then the reality was that you were caught between a relationship that wasn’t delivering, and the painful prospect of shifting your whole network to a new provider.
A group of networking equipment entrepreneurs saw the opportunity to attack a large incumbent market, and release customers from their service provider shackles. SD-WAN technology was born. At its core, SD-WAN technology isn’t anything new, indeed prior to the shift to MPLS in the late 2000’s if you wanted to build a VPN you used firewalls and created VPN tunnels in exactly the same way SD-WAN technology does today. The big difference is the controller. SD-WAN controllers orchestrate and automate the creation and ongoing management of the VPN, allowing some very advanced configuration to be rolled out quickly and painlessly. Ironically, this was exactly the level of service offered by many service providers – but those sticky relationships meant the prospect of regaining control over your network was hugely appealing to businesses (global enterprises in particular) because it allowed them to buy their Internet connections from whoever they liked, small local providers or big national or international telcos, and overlay their VPN quickly and efficiently. It’s easy to see why SD-WAN technology has so much hype and interest in the industry.
Here’s where the real problems start. Up to this point, service providers differentiated largely on service, building bespoke, flexible VPN solutions for their customers and enabling the customer to focus on the thing they do best, running their own business. Businesses were happy to pay a small premium because running a reliable network requires knowledge and experience that most businesses don’t have. Enter the marketing departments of the new SD-WAN vendors, promising new, easy to use software that didn’t need expensive, experienced engineers to run, and all the while giving you freedom to switch service providers whenever you like. Time for service providers to respond or risk losing their customer base. How to do that?
Clearly SD-WAN is a new technology and they need to invest in it and offer it. The first managed SD-WAN services started to appear around 2017, led by global telcos such as Verizon, Orange Business Services and GTT. The promise of SD-WAN being easy to use was fine if you wanted a very simple network, but large businesses needed lots of complex features to faithfully recreate the MPLS networks they were leaving behind, and service providers were quickly in demand again to manage these networks for their business customers.
At Highlight, we’ve worked hard for 20 years helping service providers run their businesses more efficiently by providing business-wide visibility of technologies like SD-WAN. What’s become very clear to us is that there are some issues emerging here.
First, SD-WAN technology and portals were designed for businesses, not for service providers. Service providers have a unique set of requirements when managing technology at scale, including offering guarantees and service level agreements to customers that this technology will work when they need it most. Most SD-WAN vendors have very simplistic multi-tenancy and even more simplistic role-based access controls (RBAC) which makes it very difficult to provide this managed service to multiple customers. Plus, while SD-WAN technology is very interested in the sexy, application-centric overlay VPN technology, it’s largely uninterested in the still-essential underlay connectivity which the provider is expected to manage. This is a problem when, as a service provider, you need to offer a top to bottom managed service, handling both the overlay VPN and the underlay connections it runs over, to maximise the value you offer your customers.
Second, most service providers based their SD-WAN offering on a single carefully-chosen vendor. And they’re now finding this choice overridden by customers who, having been targeted and wooed by multiple SD-WAN vendors, have made up their own minds about which one to use. The unfortunate provider finds themselves having to manage several different SD-WAN platforms or risk losing out on that lucrative next big contract. Each platform comes with its own management portal, technology set, expertise requirements, and support relationships. Knitting all of these into a single view for Operations, Service Management or Support is next to impossible and at best, very time-consuming. Just to rub salt into the wound, the SD-WAN market does not look like settling down any time soon. Cisco’s acquisition of Viptela a few years ago if anything validated rather than prioritised the market, and numerous contenders continue to attract both investment and customers.
SD-WAN is definitely refusing to fit neatly into a Service Provider’s traditional way of doing business. The great thing about network standards, as someone once said, is that there are so many to choose from.