Is SD-WAN really more cost effective?

We’ve been tracking SD-WAN for a couple of years now and the recurring theme in any advertising blurb you might stumble across is the potential to save money. Replace your existing WAN with an SD-WAN solution and you could save double digit percentage on your existing WAN bill.  But is that actually true? The promise laid out by some SD-WAN vendors is that the cost savings are born out of using cheaper, commoditised hardware at the remote branch site, and using cheaper connectivity options.

The hardware argument

In an SD-WAN environment, the ‘brain’ of the network (the control plane) is within a centralised SD-WAN controller and the software running on it. Therefore, the functionality typically provided by a traditional branch router is no longer needed and you can run your branch on more cost-effective hardware or virtual machines.

So, we don’t need to pay megabucks for feature rich routers at the branch?  Perfect.

The Connectivity argument

Traditional dedicated fibre based connectivity comes at a premium. You pay the premium because you want the guarantees around performance and availability such as guaranteed bandwidth, better SLA’s and, in a global environment, jitter and latency. You need the performance because your applications demand it. Understood. But along comes your friendly neighbourhood SD-WAN vendor to tell you that you can save costs by using FTTC or copper based connectivity and still achieve the same performance due to SD-WAN’s ability to “steer” traffic across the network using the best performing route based on defined policies.

So, we’re saving cost on the hardware AND the circuits – what’s not to love?

Here’s my first point around cost saving. Yes, we might be saving on the branch router hardware, but that network “brain” we talked about earlier doesn’t come free in a box of Cheerios. There’s a cost – and it comes in the form of licensing.

Every branch router you deploy will need to have a license associated with it to participate in, and connect to, the network. This licensing is usually tiered based on features such as analytics and WAN acceleration. The more branch routers that are deployed, the more licenses are required. The licensing tends be subscription based which changes the cost model from a CAPEX outlay, to an OPEX one. Obviously, not all SD-WAN vendors are equal in terms of functionality, and license costs can reflect this, but in general license costs are a major factor. Finally, there may also be additional costs in virtual machines or physical appliances that may be required to manage the network.

The second point is around the type of circuits used. Firstly, be wary of so called cheaper alternatives to MPLS. Higher speed internet access is often price comparative to equivalent speed MPLS services due to the additional transit charges levied by service providers on those services. This is less apparent outside of the UK where the cost saving argument is more realistic due to the cost of private circuits being noticeably higher.

Moving away from the cost argument, if you go for alternatives to MPLS you will be “trading down” on SLAs. The network might have the intelligence to route around a circuit failure or brownout – but sooner or later you’re going to need your connectivity provider to fix that problem. If you’ve bought xDSL/FTTC/EFM  you no longer have the 6-hour break/fix SLA to lean on – you’re probably looking at days. Can your branch office tolerate that? Also, some of these cheaper services may well be contended so you could be compromising on performance from day 1.

So in summary although there are *some* cost savings to be had with an SD-WAN solution, it’s a much more subtle benefit than some make out, especially within UK based network, and after losing the SLA’s the cost, performance and availability trade off may not be palatable for your business.

As mentioned however, there are far more interesting benefits and use cases for this technology. For example, site and application agility and application responsiveness.

So, SD-WAN – is it for you?

There is a place for SD-WAN in many network designs as it can deliver a range of benefits. By discussing this with an experienced service provider that understands the critical nature of designing both the underlay and the overlay to achieve the best solution from a cost, performance and management perspective, you can understand the specific benefits it can provide your organisation.

At ANS our WAN solutions range from traditional resilient connectivity and hybrid WAN solutions through to SD-WAN overlays.

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