SD-WAN Is Gaining Momentum in Australia, but Do Enterprises Have a Long-Term Network Strategy?

S. Soh

Summary Bullets:

  • SD-WAN is gaining traction in Australia with nearly 60% of enterprises already implementing the technology.
  • Enterprise customers need to consider their long-term network strategy to cope with the changing IT workloads beyond a standalone SD-WAN solution.

The SD-WAN technology has gained attention among Australian IT buyers and it has changed the WAN market significantly. Based on GlobalData’s research, nearly 60% of enterprises (businesses with more than 200 employees) have already deployed SD-WAN, and nearly one in three of those businesses are considering implementing it in the next 12 months. SD-WAN has taken off quicker in Australia than some other markets partly due to the migration of last-mile access to the NBN, which has resulted in several service providers (e.g., Macquarie Telecom and Aussie Broadband) offering SD-WAN with NBN as an alternative to MPLS-based IP VPN. 5G will accelerate this trend.

While cost saving has been part of the motivation to adopt SD-WAN, businesses often realized very quickly the benefits go way beyond bringing cost down. The technology enables better application performance and it is more efficient for interconnecting to the cloud and supporting these unique workloads. Better security and network management is also a key benefit, as the network needs to accommodate ever-changing requirements, such as the distributed workforce. SD-WAN as a technology will play a bigger role going forward as businesses look at simplifying branch networking, increasing the usage of cloud-based services and adopting remote working. This will also evolve into SD-Branch, which will give IT professionals a single pane of glass and one logical control plane for WAN, WLAN and LAN. This gives IT greater visibility and control over policies, configurations and performance. Together with wireless connectivity, SD-WAN can also help businesses to better support workforce mobility. Businesses will likely need to support remote working as a long-term strategy for agility, employee wellbeing and business continuity considerations. SD-WAN over Internet (especially through 5G) can deliver a better work-from-home experience by enhancing application performance and improving security.

However, the SD-WAN market is highly competitive and fragmented, with many technology vendors offering their products in Australia. GlobalData’s research shows Cisco and VMware neck and neck, ahead of the pack, but Aryaka, Silver Peak and Fortinet are also popular options – each having over 10% of market share in Australia. In a competitive environment, market consolidation is inevitable either for gaining market share or filling a gap. For example: HPE’s acquisition of Silver Peak, announced in July 2020, will see the integration of Silver Peak with the Aruba portfolio to give the company a key route to market for SD-WAN/SD-Branch.

SD-WAN has also changed the competitive landscape of the WAN market in Australia and opened up the playing field. Many system integrators see ‘corporate networking’ as a natural adjacency to their cloud, IT, security or professional services business. With many SD-WAN vendors trying to gain market share, they are also working with different channel partners including system integrators, value-added resellers and local providers. Expanded choice is changing buying behavior. GlobalData research finds:

  • Nearly 10% of enterprises interested in SD-WAN indicate buying directly from the vendor as their preferred option.
  • Nearly 20% of the respondents in the study indicated the telecom operator as their preferred option.
  • This means that many enterprises, potentially 80%, are considering SD-WAN as an over-the-top solution, but not necessarily looking at how SD-WAN should fit into the overall network strategy. This comes at a time when the network has taken a new importance in the current work-from-home environment.

As businesses accelerate the migration of IT to the cloud, the underlying network will play an increasingly more important role in connecting applications and data to the end users. With a more distributed environment (e.g., the cloud, edge and home office), the network needs to be more intelligent and automated to adapt quickly to changing traffic patterns. Companies also need to have a long-term network strategy instead of treating SD-WAN as a standalone solution which delivers quick fixes.

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