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.
“However, right now, there are significant but time-limited opportunities for MSPs to capitalise on the market’s potential.
“That potential relates as much to the SD-WAN overlay as it does to the network underlay. Get it right in both regards and you are in a good position.”
What do customers actually want?
Interestingly, Highlight believes that the high demand for SD-WAN from MSPs’ existing end customers may be a warning sign that they are unhappy with their connectivity and visibility of their services and are therefore a flight risk.
It also believes that an MSP that only sells one side of the equation (either just underlay or just overlay) faces stiff challenge from competitors who offer both.
“Organisations are often interested in new SD-WAN because they are experiencing poor service from their existing provider,” says Highlight’s Founder and CEO Richard Thomas.
“From those organisations’ MSPs’ perspectives, it is crucial to have good visibility of performance levels across those entire networks so that the right kind of support can be provided.
“When that is happening, there is far less chance that a customer will feel the need to look elsewhere.”
Full-service visibility increases retention
Highlight’s innovative yet affordable solution provides all of that rich visibility; making it easy to see performance, flag issues, and deploy a proactive fix before they escalate.
Because it is cloud-based, it can be scaled up or down dependent on an organisation’s network size.
And, once it has harvested and interpreted the data, it is able to configure and display the results for both MSP and enterprise in customised, organised and accessible dashboard views.
“It enables MSPs to take a much more holistic ‘service wrap’ approach to SD-WAN and the underlying network on which it sits,” says Savereux.
“Naturally, as well as being best practice from the end user customer’s perspective, it’s also an approach which presents significant upsell opportunities for the MSP.
“By providing assurance across the whole solution, ie: both the underlay and overlay together, in a single view, the customer is much more likely to perceive what’s being delivered as a single service – which is what they actually wanted – and see the MSP delivering it.”
Not least, with everything in one view, it surpasses the SD provider portals which only focus on their own products.
MSPs are then in a position to deliver a complete managed service.
It seems a small part of a big whole really does have the potential to disproportionately affect your bottom line.
So mind that iceberg..!
