Like any successful technology, the software-defined wide area networking (SD-WAN) market is going through its growing pains with respect to market awareness, with many vendors hi-jacking the term as a means to extend their own legacy solutions or to simply jump on the latest hot trend. What's more interesting is where this industry is headed. As the wide area network quickly solidifies its role as the performance bottleneck for cloud services of all kinds, the SD-WAN market will continue to grow and evolve. This evolution will happen in lock step with the move to software-defined everything in the enterprise data center, with a focus on virtual network functions (VNFs), and how they could be used to create custom WANs on demand.

SD-WAN’s enormous growth this year, as well as its predicted continued growth in the years to come is inherently tied to the paradigm shift data centers are currently undergoing. That is, from a manually configured set of servers and storage appliances, to a software-defined architecture, where the servers and storage appliances (virtual or physical) can be managed and operated via a software-defined architecture. This means less manual errors, lower cost, and more efficient ways to operate the data center.

As an industry, as we implement some of the data-center approaches to the WAN, one must note that there is a big difference between the data-center networks and the enterprise WAN networks. Namely, data-center local area networks (LANs) have ample capacity and bandwidth, and unless they are misconfigured, are never the bottleneck for performance. However, with enterprise WANs, where the branch offices are connected to the Internet through WAN connections (MPLS, DSL, Cable, Fiber, T1, 3G/4G/LTE, etc.), the choking point of the performance is almost always the WAN. This is why SD-WANs became so popular so quickly, in that this provides immediate relief for this issue.

However, as WANs continue to grow in complexity, with enterprises operating multiple clouds and cloud models simultaneously, there is a growing need to add automation and programmability into the software-defined WAN in order to ensure performance and reliability. Therefore the VNFs that can address this WAN performance bottleneck have the opportunity to transform how enterprises connect to their private, public, and hybrid clouds. VNFs that extend beyond a single location, but can cover WAN networks, will have the ability to add programmability to the WAN. In a way, the “software defined” nature of the data center will be stretched out all the way to the branch office, including the WAN connectivity between them.

So what does a VNF that is programmable and addresses the WAN bottlenecks look like? These VNFs are overlay tunnels that can perform certain flow logic and therefore can work around network problems on a flow-by-flow and packet-by-packet basis. These VNFs are so smart, they have the problem diagnosis, problem alerting, and most importantly, resolution of the problem all baked into the solution. In other words, it's unlike the days without SD-WAN where an IT manager would have an urgent support ticket whenever a network problem occurs. With VNF-based SD-WANs, the networks are becoming smart enough to solve the problem proactively, in most cases, before even it effects the applications, services, and the user experience.

This increase in specific VNFs for the SD-WAN will start with the most immediate need, which is often latency and jitter sensitive applications such as voice, video, and unified communications (UC) type applications. Even now, VNFs are being used to solve these issues. For example, a CIO can have a VNF that dynamically and automatically steers Voice-over-IP (VoIP)/ session initiation protocol (SIP) traffic around network problems caused by high latency, jitter, and packet loss, and in parallel have another VNF to support cross-traffic and latency optimization for “chatty” applications.

In another example, a VNF can be built in minutes designed to steer non-real-time traffic away from a costly WAN link and apply header compression for real-time traffic only in situations where packet loss or latency crosses a specific threshold during certain times of the day — all the while updating syslog with telemetry data. With this level of flexibility and advanced capabilities, VNFs are poised to become the go-to solutions for issues related to the WAN.

A VNF load balancer is another such overlay that has the ability to load balance the traffic over the WAN links. Since the VNF load balancer is in essence a software code that can be deployed onto an SD-WAN appliance, it has the power of taking advantage of various types of intelligence and adaptability to optimize the WAN performance. VNF load balancers should also work with standard routing so that you can inject it in your network, say between the WAN modems and your firewall/router seamlessly.

Clearly, VNFs are part and parcel of SD-WAN's next wave of evolution, bringing intelligence and agility to the enterprise WAN. As 2017 ramps up, we’ll see more and more innovation on this front, fully extending software-defined architecture from the data center throughout the network.