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Software-defined networking in the WAN picks up the pace as its business benefits beckon to CSPs

Caroline Chappell Research Director

"NFV has been the dominant technology for network programmability and automation, but software-defined networking is gaining in momentum as operators rush to reinvent enterprise connectivity services for the cloud era."

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Enterprise customers are demanding connectivity services that can be delivered as quickly and flexibly as cloud IT. Operators must respond urgently to these needs by driving programmability into the WAN. Operators cannot yet apply the same software-defined networking (SDN) approaches that automate connectivity in the data centre to the more-complex, brownfield WAN environment, but they are introducing new software-defined WAN solutions that enable the holistic management of the network through programmable interfaces. Some operators are using these solutions to disrupt the current enterprise market with a completely new customer experience; others are implementing solutions defensively to protect lucrative enterprise relationships and revenue. Investment in SDN technologies for the WAN is increasingly important for operators as a result, and will help to create new market opportunities for start-ups and established network equipment vendors with WAN-management expertise.

Competition between operators for enterprise business is driving deployments of SDN in the WAN

Over the past 6 months, several operators have made announcements around SD-WAN and related next-generation network management products (sometimes called 'carrier SDN'1), as they rush new network services to market. Our latest SDN report, Software-defined networking in Asia–Pacific: case studies of operator deployments, describes seven operators' approaches to SDN in the WAN in Asia–Pacific (APAC) alone (Colt [KVH], MyRepublic, ngena, NTT Communications, Singtel, SK Telecom and Telstra) – and this is not an exhaustive list. Tier 1 operators worldwide must now offer SD-WAN and on-demand bandwidth services: many of their smaller competitors have already capitalised on SD-WAN's agility to provide self-service connectivity, which is eating into Tier 1 operators' enterprise revenue.

Network function virtualisation (NFV) has, until recently, been the dominant technology for network programmability and automation, but SDN adoption is now gaining in momentum as operators begin to appreciate the enormous scope of the changes required for NFV.2 NFV's approach to network programmability and automation is based on the application of cloud technologies, whereas SDN can drive programmability and automation into the physical network, without the need to rip out and replace existing functions, including MPLS, the ubiquitous WAN control plane used for premium enterprise connectivity services.

Operators, such as those profiled in our APAC report, can therefore achieve nearer-term business benefits, including a reduction in service delivery times from weeks to minutes, increased levels of customer satisfaction, and the ability to collect revenue more quickly (compared with waiting months for the fulfilment of service orders). AT&T's Chief Strategy Officer and Group President of Technology and Operations John Donovan has stated that the operator's 'Network on Demand' platform (which is based on one of the SDN in the WAN approaches that we will be categorising in a forthcoming SDN vendor landscape report) has improved provisioning cycle times by 95%.

Figure 1: Three different approaches to SDN in the WAN

Figure 1: Three different approaches to SDN in the WAN

SDN in the WAN is progressing ahead of, and alongside, NFV

Emerging approaches to SDN in the WAN represent the stepping stones that operators must follow towards full network automation if they are to become digital service providers (DSPs). The DSP vision is one in which operations such as service creation and delivery can be carried out in the network 'factory' in a highly automated way. Automation supports a more-rapid pace of business than operators can currently achieve, increased efficiencies and new capabilities, including the ability to experiment with new services and service features. These services can be introduced more frequently than services developed using a traditional, manual process, with less risk involved in withdrawing those services that the market rejects, and more opportunity to personalise service features at low cost. Web-scale DSPs have found that rapid feature innovation fosters customer stickiness, and operators want to emulate their success.

NFV will play a central role in supporting the DSP vision in future, but its approach to network automation requires a cloud-based network that is not yet in place. NFV is, as many experts have pointed out, a strategic use case for SDN, where SDN describes the broader automation vision. There is a growing market realisation that combining an SDN approach for the WAN, such as SD-WAN, with an NFV opportunity, such as virtualising customer premises equipment (vCPE), can improve the business case for both. Data centre SDN is a critical enabler of NFV, but driving SDN into the WAN is fundamental to operators' ability to improve the agility and efficiency of their built networks today, ahead of the larger, disruptive transformation associated with NFV.

The rapid rise of SDN in the WAN threatens traditional OSS

Many operators have built their own WAN management automation, commissioned their OSS vendors or systems integrators (SIs) to build it, or made use of specific management tools provided by their device vendors. Typically, these automation efforts are ad hoc, siloed and proprietary. New SDN in the WAN approaches aim to support multiple vendors, multiple layers of the network and standard data modelling languages, protocols and APIs (including YANG/NETCONF, PCEP, and OIF). These approaches leverage open-source code (for example, OpenDaylight), and favour a productised approach over custom code development. In addition, these solutions are being developed by new players, including start-ups that had yet to enter the market 3 years ago, as well as network device vendors that are reinventing themselves as the new guardians of the future mode of automated network operations. Traditional OSS vendors and systems integrators risk displacement as operator budgets are diverted towards these new solutions.

In the fast-moving market that is emerging around the programmable WAN, operators need to think strategically about how best to balance getting to market quickly with a competitive enterprise customer experience against longer-term network automation goals. New market entrants will need to understand how they fit into the broader SDN-/NFV-based network automation ecosystem that operators will eventually want to create, while network equipment vendors will need to convince the market of their multi-vendor, multi-layer support credentials. Existing OSS vendors and SIs will need to rethink their professional services businesses in the light of SDN market trends and adapt their OSS to encompass SDN in the WAN approaches.


1 Analysys Mason forecasts include carrier SDN under the broad 'CSP SDN' and narrower 'SDN controller' categories

2 This will be the subject of a forthcoming article.