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Excuse me, Whats the SDWAN business case in 2017?
March 13, 2017 | By Reza Toghraee @ ArpaWare
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We are pleased to share with you all an interesting article contributed by Reza Toghraee. 

 
 

Reza Toghraee

Technical Manager (CCIE, Cloud, SDN, Netwrok, Security Expert) at ArpaWare

 

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SDWAN has gained lots of attention during last 3 years with new terms, hypes, marketing buzz and finally some Intelligence to legacy WAN.

 

What is SDWAN ? 

 

Keep all marketing stuff and hype away, in simple terms SDWAN is a solution to allow enterprises and their branch locations to use multiple WAN or Internet links (combination of high quality and cheap commodity) to build their virtual private network, via an Over The Top (OTT) approach. The WAN links can be a private MPLS, dedicated internet or a commodity broadband internet delivered via fiber or xDSL or Wireless or even 3G/4G.

 

 

But what is the business case for SDWAN ?

 

The business case for SDWAN is very similar to WAN optimizers. They are here to reduce the enterprise MPLS costs and provide better user experience using high bandwidth commodity Internet links. MPLS cost is normally one of the biggest budget chunks of enterprises, especially for enterprises with many site offices around the globe. 

 

I did a research on cost of MPLS from multiple Tier1 service providers. I found that the cost of 1 Mbps of dedicated MPLS with standard SLAs is between $100 to $200 (average cost).

 

On the other hand, I search on cost of standard Internet connection in 70 countries (US, Europe, Africa, Asia, Latam, Australia). What I have found is that in most of developed and semi developed countries the cost of 100Mbps business internet connection is somewhere between $50 to $100 per month. In under development countries the cost of upto 10Mbps business Internet is around $100 or more per month.

 

 

The above chart is demonstrating a potential cost saving for SDWAN business case.

 

Also we need to remember that "commodity Internet" is a product, and in most cases you are not buying it per Mbps. Instead it is offered as a product for example a 100Mbps or 10Mbps connection at a monthly cost.

 

 

Lets make an example for an Enterprise with 200 sites

 

In this example we study an organization with 200 sites. Total cost of MPLS for this organization is $3.6m per year, with around 2Gbps aggregated WAN MPLS bandwidth for all its 200 office locations.

 

 

If this organization would implement SDWAN, it needs to acquire local internet breakout at its 200 branch sites. The cost of local internet breakouts depends on locations and countries.

 

For this example, the organization with 200 sites (100 sites in developed countries and 100 sites in developing countries) , they can get around 11Gbps of aggregated local internet connections at sites. (100Mbps for 100 offices in developed countries and 10Mbps for 100 offices in under development countries)

 

 

Above chart shows commodity internet provides 5 times more bandwidth (11Gbps vs 2Gbps) .

 

Now lets compare the costs between legacy MPLS WAN and a SDWAN solution with 11Gbps of local internet breakouts.

 

Keep in mind that the saving from SDWAN only comes

IF enterprise reduces their MPLS bandwidth,

otherwise SDWAN will be an extra cost.

 

SDWAN solution cost consists of following components :

  1. SDWAN equipment and licenses : The CAPEX and OPEX for SDWAN. most of current SDWAN vendors provide licenses on a subscription bases, reducing the CAPEX investment.
  2. Local Internet breakouts : You need to consider procuring commodity local internet breakouts for all office locations.
  3. Legacy MPLS WAN: You cannot disconnect your MPLS WAN, but with SDWAN you can start reducing its bandwidth to only cover for your critical applications.

 

Deploying SDWAN requires an initial upfront investment in first year, however from Year 2 on wards, by reducing the MPLS bandwidth, solution starts providing savings Year On Year.

 

Have a look at below 5 years cost analysis between legacy MPLS and SDWAN

 

 

In this example, the enterprise needs to invest around $1m for SDWAN in first year (SDWAN Capex+Opex) , and from Year 2 onward start reducing their MPLS bandwidth. The MPLS links should be sized only to support specific applications. MPLS bandwidth reduction may end in Year 5 or even earlier, leaving enterprise with a linear graph of cost for their SDWAN.

 

following data is used to generate the cost graph:

 

 

 

 

The hidden part of SDWAN

 

Well, if you are planning to deploy SDWAN, consider the following :

  1. Procuring, managing, paying the local internet links. decide who has to do it, is it centralized or by local site resources.
  2. If there is any issue with a local ISP, consider a longer maintenance window for fixing. in most cases local ISP speak the local language. consider who is dealing with local ISPs.
  3. Your MPLS service provider may start increasing prices as they realize you are reducing bandwidth. always try to to stick to your minimum committed business while the contract is not expired.
  4. Troubleshooting users and application experience might become more complex, requires you perform another triage to understand where the traffic is being routed after your SDWAN edge router.
  5. SDWAN traffic over internet is based on an encrypted tunnel towards the headend unit in your datacenter. Public Internet might not support such traffic in some countries (such as Russia) and you may need to consider different options.
  6. Public Internet doesn't provide MPLS level SLA. Delay, packet lost, jitter might happen. you need to ensure the SDWAN solution you are buying is smart enough to detect such issues and have a policy to switch over your critical traffic.
  7. Study the network behaviour of enterprise applications. understand how much and in what pattern the traffic is generated.
  8. If your organization is using cloud services such as Office365, AWS, Azure, etc , by increasing the local internet breakout bandwidth, users will have much better experience comparing to a centralized internet access via legacy MPLS.
  9. You can consider running the SDWAN edge as a virtual machine in a highly available virtual environment in branch offices.

 

Which SDWAN vendor?

 

There are many SDWAN vendors. I did some analysis on most of them and divided in 2 categories :

  • SDWAN solution with built-in WAN Optimizer: These products perform both WAN optimization and SDWAN, and might be more ideal for people considering a singe box.
  • SDWAN solution without built-in WAN Optimizer : These products are mostly from new vendors, they are pure SDWAN products.

There are many players in SDWAN market, products are getting matured. SilverPeak Unity, Cisco iWAN, Riverbed SteelConnect, Citrix NetScaler, Versa, VeloCloud, CloudGinix, Talari , Viptela, Infovista, Fatpipe, Nuage, Sonus are all playing in this market.

 

 
     

 

 

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