SD-WAN and vCPE have emerged as the leading use cases in the SDN and network functions virtualization (NFV) markets. This has been confirmed by our ongoing research, including the findings from our NFV survey this past spring (see diagram below). In addition, our research over the past year indicates that SD-WAN appears to have growing interest from both the service provider and end-user community.
In our NFV survey from this past spring, 78% of service provider and end users surveyed (total of 79 respondents) said that SD-WAN and vCPE were a leading use case for development of their NFV platforms.
These survey results have been backed up by real-world examples of service-provider deployments in the past 12 months. Network operators including AT&T, CenturyLink, Masergy, and Verizon have announced commercial SD-WAN offerings utilizing vCPE and NFV technology. It’s becoming clear that virtualized services offerings will become key competitive differentiators in the service provider world.
Before we take a deeper look at the benefits of these technologies and why both end users and service providers want a virtualized edge, it’s helpful to gain a better picture of the some of the networks we look at and what particular enterprises, SMBs, and service providers are looking to do.
Return on Investment (ROI) for vCPE, SD-WAN
Our research indicates that both service providers and enterprises have a rising interest in SD-WAN and vCPE technology. The reasons cited at the top of the list are the promise of better flexibility and manageability of networking technology – which can result in lower operating costs and capital costs, providing a return on investment (ROI).
How does this happen? The SDN movement promises a more flexible networking architecture to solve these problems. In the past, individual WAN applications or challenges – for example virtual private networks (VPNs) and WAN optimization – were solved with specialized hardware appliances and software installations. The SD-WAN movement allows individual WAN applications to be installed as software only. In addition, by using vCPE, the need for hardware can be greatly reduced, as software can be installed on any commercial off-the-shelf (COTS) hardware. This is especially useful in the WAN, where sometimes reaching the customer or installing equipment in remote locations can come with considerable expense.
Below is a summary of the varieties of virtual edge technology and their potential ROI and business benefits.