When you’re dazzled by the new and the exciting, it’s easy to forget the old and the dull.
For many Managed Service Providers, SD-WAN has recently wowed with its ability to dramatically transform the operations of multi-site organisations by simplifying their network architecture.
The market is booming; it’s an irresistible sales driver.
When a bandwagon is rolling, surely you jump on, right..?
Well, yes, but from a revenue perspective at least, SD-WAN may flatter to deceive.
It’s merely the tip of the connectivity iceberg.
What lies beneath – the essential network underlay – is the REAL money-spinner; and the smarter MSPs must ensure they have their eyes on BOTH.
That means assuring the performance of the underlay as well as the SD-WAN overlay: a move which not only helps protect revenue by ensuring service levels remain consistently high, but which also adds tangible value to existing customer relationships.
What lies beneath the surface of the SD-WAN icebeg
“Most SD-WAN provision is sold when an enterprise changes Managed Service Provider. This is often accompanied with a change of connectivity provider,” says Martin Saunders, Product Director at UK Service Assurance experts Highlight, whose clever solution enables a ‘single pane of glass’ view of every aspect of enterprise connectivity.
“This fact alone should encourage MSPs to understand that, distracted by the opportunities in the
SD-WAN explosion, they risk taking their eye off the network component upon which everything else depends.
“Also, although there is undoubtedly legs in SD-WAN for a while yet, most end user organisations who have bought direct from a third party provider use just a fraction of the quite complex functionality and then end up looking to their MSP to take all the pain associated with its management.
“If an MSP takes the right holistic approach, it can have the SD-WAN and underlying connectivity revenue streams and, most importantly, retain both for longer.”
It’s certainly the case that the opportunities loom large.
The hidden underlay opportunity
The SD-WAN market is maturing all of the time and, according to research by Dell’Oro Group, grew by 50% in the fourth quarter of 2020.
It is transitioning from the status of ‘early adopter’ technology to become a mainstream network option for enterprises large and small; with standardised offerings from well-established vendors such as Cisco, VMWare and myriad others.
Analysts Analysys Mason predict that, if trends continue, SD-WAN retail revenue will double by 2025 and account for 25% of all connectivity revenue.
However, the same research suggests that it’s the underlay portion of an SD-WAN rollout which accounts for the vast majority of overall revenue.
“SD-WAN is pretty standard now and more and more enterprises are adopting it,” says Highlight’s Marketing Executive, Peter Savereux.
“It is the focus of heavy marketing by those who sell it and eventually it will become commoditised.
