The SD-WAN Wave: Cost Savings Hype and MPLS Misconceptions

The SD-WAN Wave: Cost Savings Hype and MPLS Misconceptions

SD-WAN: “With the promise of savings as high as 90%, are you ready to make the leap from MPLS?”

Statements like these lead to unrealistic expectations about the benefits of SD-WAN. Conferences and sales chatter are escalating the promise of cost savings and may be misleading professionals when it comes to the validity of SD-WAN as a replacement for MPLS networks. As a result, buyers need help distinguishing between reality and the hype. Here’s a recap of my recent article published in Network World, which explains what you need to know about SD-WAN, MPLS, and cost savings in the real world.

MPLS and SD-WAN: It’s Not an Either/Or Situation

People assume that SD-WAN should replace MPLS, but it’s not an either/or situation. SD-WAN and your tried-and-true MPLS networks should work together. MPLS is not dead. In fact, a hybrid networking environment that combines Internet connectivity with MPLS is best. SD-WAN should work alongside your existing MPLS network, expanding its capabilities.

You should migrate to a hybrid network with an SD-WAN overlay.

This brings us to the concept of network risk tolerance. MPLS remains the most secure and stable data transmission type for the network. On the opposite side of the scale is public Internet--the least reliable connectivity method. Masergy works with enterprises every day, helping them custom design their network architecture based on their location types, risk tolerance, application, and user profiles. The customer should first consider their risk tolerance as it relates to business continuity. Which locations, applications, and user groups are most critical and least critical? We ask them to identify their risk tolerance (see diagram) so we can design each WAN connection accordingly.

Through this process, we never require the customer to abandon their MPLS connections. After all, a single MPLS connection is typically required for data center, headquarters, or other business-critical applications. Instead, we ask customers to identify their risk tolerance and identify any optional locations, guest wifi networks, and less-critical applications that may be able to transition from MPLS to dedicated Internet access (DIA) or to public Internet.

Network Risk Tolerance Line

As the Risk Tolerance Line diagram shows, SD-WAN is not included as a point alongside MPLS, DIA and public Internet, because it is not a connectivity type or a data transfer method. SD-WAN is a routing capability that infuses flexibility and enables visibility for each WAN environment.

By creating a hybrid network, enterprises add Internet connectivity, and with SD-WAN, their IT teams gain tools to easily deploy and manage all the WAN connections. As a result, MPLS, Internet connectivity, and SD-WAN all work together. Learn more about hybrid networking with SD-WAN.

The Cost Savings of SD-WAN: Reality vs. Hype

Financial savings is often the result when enterprises trade MPLS for Internet connections, but cost reductions as high as 90 percent and as strong as 10X are misleading. While these case studies exist, they are more often anomalies where a customer has switched all MPLS connections to public Internet and removed WAN optimization. However, this scenario is unrealistic for most enterprises.

While, yes, you technically can transition all your MPLS sites to public Internet, it’s probably not a smart move. Truth be told, I seldomly recommend it. Public Internet connectivity should be reserved for failover plans and used only for applications and locations that are truly optional (e.g. Facebook and YouTube). In the real world, most enterprise customers transition only a few access points from MPLS to public Internet, meaning they switch only one or two instances. Here at Masergy, we see our customers gain an estimated SD-WAN savings of 0-40% at best.

Case in point, Masergy just released a new SD-WAN case study that includes a 40 percent savings attributed to consolidated vendors and Internet connectivity. The team was reluctant to advertise this savings, because it’s not the norm.

The Takeaway: SD-WAN adoption should be driven by more than cost savings. SD-WAN success should be measured by productivity savings and a network performance lift. After all, its benefits include management tools, visibility, analytics, and remote control features which offer indirect savings and are known to deliver a competitive advantage.

Potential customers approach me constantly saying they’ve “heard about SD-WAN and they want to buy it.” But sometimes, I have to talk them out of it, and I am more than willing to do so. SD-WAN isn’t right for everyone. At Masergy, we’re not about selling what’s “hot” if it’s not right for the customer. When the hype gets too thick, our prospects and customers trust us to provide the straight story.

To be as successful as possible, our consultants will help you evaluate your network performance, align your digital transformation goals with the latest advancements, and bring expectations back down to reality. We’re confident that this is the best approach, and it’s our job to live it everyday.

Want to whiteboard your network with Masergy? Learn more about Masergy’s Hybrid Networking solution and contact us for a free network consultation.

About Paul Ruelas

Director, Product Management, Masergy
Paul Ruelas is Director of Network Products at Masergy. He brings over 26 years of expertise in telecommunications, IP Networks, complex solution design, and product development. Paul has developed many Ethernet and optical products that enabled numerous global enterprises to transform their data communication infrastructures to improve business outcomes. Paul is an industry thought leader in communication transformation and on topics such as hybrid networking, SDN, NFV, and cloud connectivity.