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Looking ahead to 2019, the most important thing to understand regarding software-defined WAN is that 91% of organizations with a WAN are either evaluating SD-WAN, planning to deploy it before the end of 2019 or are already in the process of deploying it.
Here are some things the 91% should expect from the future of SD-WAN in 2019.
In Nemertes Research's 2018-2019 WAN Economics Research Study, 23% of study participants said they use SD-WAN. Of that 23%, almost 30% indicated they use a managed or in-net SD-WAN service -- in-net SD-WAN means the service provider's network plays a role in delivering some or all SD-WAN functions. That percentage will continue to climb as provider offerings mature and gain successful deployments to serve as references for prospective customers.
Organizations that already outsource WAN management will shift to the new generation of technology as their contracts renew and their routers hit end of life, causing that number to grow. Many companies also get more interested in managed or in-net SD-WAN when they realize they'll have a hybrid network with legacy equipment and SD-WAN for two or more years. They don't find the prospect of managing the migration and hybrid WAN appealing or strategic.
SD-WAN and the last mile
The problem of managing last-mile connectivity to WAN sites -- especially internet connectivity -- also drives increased use of managed SD-WAN of one sort or another. In all, a majority -- 58% -- of SD-WAN users want to slough off the last-mile management problem. That includes the 24% who want to roll it into a managed SD-WAN contract and the 34% who want to outsource last-mile issues to a connectivity aggregator -- whether for do-it-yourself SD-WAN or for managed SD-WAN.
The watershed year for MPLS
For the first time, in 2019, we expect to find a solid majority of organizations using MPLS will be reducing or eliminating use of MPLS as they deploy SD-WAN. Currently, a combined 41.2% have already eliminated MPLS, were planning to eliminate it or were planning to reduce its footprint -- up from 23% in 2017.
More notably, in Nemertes' 2017 research, no SD-WAN users had dropped MPLS or planned to do so in the short term. Now, 19% said they plan to drop it as part of their SD-WAN rollout or have dropped it entirely already.
A year of rapid consolidation
Oracle's purchase of Talari was just the most recent bit of market consolidation in an overcrowded space. Even as we expect the number of service providers offering SD-WAN to continue to grow, it's clear a lot of current platform providers will fall by the wayside this year -- whether they fail outright at the end of their startup funding, fade into the identity of a larger acquirer or merge to consolidate multiple shards of the market into a larger and more viable one.
The SD-WAN market certainly has room for a broad set of product options, but we'll likely see the field narrow by 50% by the time we finish 2019, with the ultimate number of platform providers probably settling around 10 by 2021.
The future of SD-WAN is a feature set
Cisco is moving aggressively to weave SD-WAN into the core of what it provides in a branch router. Other WAN vendors are making similar moves, as well. Because a solid majority of those deploying SD-WAN want to use the technology to replace their branch routers, WAN optimizers and firewalls, it seems certain SD-WAN will soon stop being a stand-alone thing.
WAN edge devices will be expected to provide SD-WAN features as table stakes, with other full feature sets, as well. These features might be provided directly by the main platform or in the style of network functions virtualization -- using a partner's virtual network function that is deployed and managed via that main edge service. They might be deployed at the provider end of an in-net SD-WAN service.
However vendors implement these features, the future of SD-WAN will shift decisively from individual SD-WAN, per se, to WAN edge devices -- and everything that combined feature set can accomplish. Some providers are already beginning to position themselves in this space, and the rest are likely to follow in 2019.