Telstra Americas President Noah Drake

Australia’s Telstra is one of many international telecom operators that see an opportunity to better penetrate the North America Enterprise market on the back of SD-WAN platforms as those organizations increase their focus on security options like secure access service edge (SASE) and security services edge (SSE).

This so-called SD-WAN “second iteration” has opened the market to new cloud-based security vendors and service providers that have been operating worldwide backbone networks to serve legacy services. And it’s a lucrative business.

Noah Drake, president of the Americas for Telstra, explained that the carrier has had good success penetrating the SD-WAN market in its home country and other parts of Southeast Asia, “but maybe in some of our regions like [Europe, the Middle East, and Africa] and America we've been a bit more second or third to the party. So that's been a headwind that we've had to work through.”

Drake said that security needs have become central to most of Telstra’s conversations with Enterprise customers, adding that “you can’t really talk about SD-WAN without talking about security.”

“SASE and SD-WAN are really the same conversation, and in my opinion, the same product set. It's just the second iteration,” Drake said. “What we're looking to do is say how in this next wave do we not be second or third to the party. We want to be someone that's thinking ahead, to be a thought leader … that's innovative and not just another kind of follow-along, coattail type of product or value prop.”

Telstra’s SD-WAN platform includes partnerships with Cisco and VMware’s VeloCloud service and has a global reach of around 2,000 points of presence across most countries in the world.

Vertical Systems Group placed Telstra in the “Challenge Tier” of its mid-year 2021 ranking of global providers of carrier-managed SD-WAN services. Those carriers claimed between 1% and 5% market share in their defined SD-WAN segments.

France-based Orange and Spain’s Telefónica have expressed similar SASE and SSE intent in differentiating themselves in the increasingly lucrative market.

Dell’Oro Group recently released a report that found the SSE market surged 40% year-over-year to more than $800 million in the first quarter. Mauricio Sanchez, research director of network security, SASE, and SD-WAN at Dell’Oro, said the strong growth is a testament to more enterprises preferring cloud-delivered security over traditional on-premises solutions.

The analyst firm also reported that total SASE networking and security revenue approached $1.5 billion for the quarter and experienced 30% year-over-year growth. Despite continued supply chain concerns, SD-WAN revenue also grew more than 20%.

“Not only are we pushing security to the edge, but we're now looking at compute at the edge, and we're now looking at decentralized processing. And when people start thinking about that from a large Enterprise standpoint, we want them to say, ‘you know what, when we're talking about networking and Telstra came in and they knew what they were talking about on this, they felt like they were ahead of the curve on this,’” Drake said. “We want to start associating ourselves with that part of the conversation, and that's probably the next kind of adaptive workspace that we're looking at.”

Drake also explained that Telstra can tap into its extensive worldwide connectivity, including its long-range subsea links into Southeast Asia and North America.

Telstra is also one of only a handful of carriers that has a direct line of connectivity into China. This provides it with the ability to support Enterprise SD-WAN and security needs at branch locations in that country while also remaining compliant with North America-specific security requirements.

“There's only a couple of providers, and we're one of those that can do that,” he said. “So we take some of those unique things and then we stack that into a more compelling, holistic solution.”

However, Drake also noted that Telstra’s extensive operations just outside of China provide more options.

“We have the expertise in region to facilitate transitions away from China. That's why we have cable systems running through places like Guam that are neutral or U.S. friendly,” Drake said. “I think that we can actually help regardless of which side of the coin the customer may land on.”

Drake added that those options combined with the ongoing evolution of SD-WAN, SASE, and SSE provide Telstra with an opportunity to provide a focused product that can help it further penetrate the North America market.

“As the second and third iterations of SD-WAN come around, we want to be part of that conversation in a meaningful way and also know what lane we swim in and not try to be someone that we're not,” he said.