This week SD-WAN vendor Cato Networks announced the results of its Telcos and the Future of the WAN in 2019 survey. The study was a mix of companies of all sizes, with 42% being enterprise-class (over 2,500 employees). More than 70% had a network with more than 10 locations, and almost a quarter (24%) had over 100 sites. All of the respondents have a cloud presence, and almost 80% have at least two data centers. The survey had good geographic diversity, with 57% of respondents coming from the U.S. and 24% from Europe.
Highlights of the survey include the following key findings:
SD-WANs are hot but not a panacea to all networking challenges
The survey found that 44% of respondents have already deployed or will deploy an SD-WAN within the next 12 months. This number is up sharply from 25% when Cato ran the survey a year ago. Another 33% are considering SD-WAN but have no immediate plans to deploy. The primary drivers for the evolution of the WAN are improved internet access (46%), increased bandwidth (39%), improved last-mile availability (38%) and reduced WAN costs (37%). It’s good to see cost savings drop to fourth in motivation, since there is so much more to SD-WAN.
It’s interesting that the majority of respondents believe SD-WAN alone can’t address all challenges facing the WAN. A whopping 85% stated they would be confronting issues not addressed by SD-WAN alone. This includes secure, local internet breakout, improved visibility, and control over mobile access to cloud apps. This indicates that customers are looking for SD-WAN to be the foundation of the WAN but understand that other technologies need to be deployed as well.
Telco dissatisfaction is high
The traditional telco has been a point of frustration for network professionals for years, and the survey spelled that out loud and clear. Prior to being an analyst, I held a number of corporate IT positions and found telcos to be the single most frustrating group of companies to deal with. The problem was, there was no choice. If you need MPLS services, you need a telco. The same can’t be said for SD-WANs, though; businesses have more choices.
Respondents to the survey ranked telco service as “average.” It’s been well documented that we are now in the customer-experience era and “good enough” service is no longer good enough. Regarding pricing, 54% gave telcos a failing grade. Although price isn’t everything, this will certainly open the door to competitive SD-WAN vendors. Respondents gave the highest marks for overall experience to SaaS providers, followed by cloud computing suppliers. Global telcos scored the lowest of all vendor types.
A look deeper explains the frustration level. The network is now mission-critical for companies, but 48% stated they are able to reach the support personnel with the right expertise to solve a problem only on a second attempt. No retailer, airline, hotel or other type of company could survive this, but telco customers had no other options for years.
Another interesting set of data points is the speed at which telcos address customer needs. Digital businesses compete on speed, but telco process is the antithesis of fast. Moves, adds and changes take at least one business day for half of the respondents. Also, 70% indicated that opening a new location takes 15 days, and 38% stated it requires 45 days or more.
Security is now part of SD-WAN
The use of broadband, cloud access and other trends raise the bar on security for SD-WAN, and the survey confirmed that respondents are skeptical that SD-WANs could address these issues. Seventy percent believe SD-WANs can’t address malware/ransomware, and 49% don’t think SD-WAN helps with enforcing company policies on mobile users. Because of this, network professionals are forced to buy additional security tools from other vendors, but that can drive up complexity. SD-WAN vendors that have intrinsic security capabilities can use that as a point of differentiation.
Managed services are critical to the growth of SD-WANs
The survey found that 75% of respondents are using some kind of managed service provider, versus only 25% using an appliance vendor. This latter number was 32% last year. I’m not surprised by this shift and expect it to continue. Legacy WANs were inefficient but straightforward to deploy. D-WANs are highly agile and more cost-effective, but complexity has gone through the roof. Network engineers need to factor in cloud connectivity, distributed security, application performance, broadband connectivity and other issues. Managed services can help businesses enjoy the benefits of SD-WAN while masking the complexity.
Despite the desire to use an MSP, respondents don’t want to give up total control. Eighty percent stated they preferred self-service or co-managed models. This further explains the shift away from telcos, since they typically work with fully managed models.