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Catching the SD-WAN wave: the cost savings hype and MPLS misconceptions need more explanation

Apr 18, 20185 mins

Cost shouldn’t be your only driver for SD-WAN adoption.

I recently had the pleasure of speaking as a panelist at an event break-out session discussing the benefits of SD-WAN. The session, “Catch the Next Wave of Cost Savings,” mirrored much of the current SD-WAN hype, and the abstract further stimulated excitement:

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

While the benefits of hybrid networks with SD-WAN are already proven and groundbreaking for many companies, the claims of totally replacing MPLS with SD-WAN are becoming bold and perpetuating unrealistic expectations. And it’s not just at events; I have seen white papers lately advertising 10X savings with pure SD-WAN. The issue: enterprises need help clarifying the line between hype and reality.

I believe buyers need more perspective, more context, and a voice of reason amidst all the sales talk. As our panel revealed, I think 90 percent SD-WAN cost savings are grossly overblown and the MPLS rip-and-replace assumption is a fallacy. Here’s what’s not being advertised about SD-WAN.

SD-WAN and MPLS: it’s not an either-or, it’s both

Many think SD-WAN is a replacement for your tried-and-true MPLS. It’s not. MPLS is not going away—and most enterprise CIOs know it. A recent IDG Market Pulse survey showed that when it comes to SD-WAN, 80 percent of enterprises opt to augment (rather than replace) their existing network infrastructure. Indeed, that’s what most of our customers do too. SD-WAN should complement your existing MPLS network. You shouldn’t be “making the leap” from MPLS to SD-WAN because, as the idiom suggests, it’s risky to jump off an established platform. Instead, you should be looking to expand the capabilities of your MPLS network with Internet connectivity and add SD-WAN.

In short, you should transition to a hybrid network with an SD-WAN overlay.

I mentioned the risks of “making the leap” from MPLS to SD-WAN, so let’s drill down into the idea of network risk tolerance. As a connectivity type, MPLS still remains the most stable and secure data carrying technique for the network. On the other end of the spectrum is public Internet, which is the least reliable method for connectivity. When planning enterprise needs, we ask the customer to consider their business continuity risk tolerance for each location, application, and user group.

Then, we chart their preference with their acceptance for risk and design each WAN connection accordingly. We don’t ask you to abandon your MPLS connections all together—at least one connection is needed for the data center, headquarters, and business-critical applications. We allow you to transition select branch locations or guest WiFi networks from MPLS to dedicated Internet access (DIA) or public Internet—when and where it makes the most sense for your business.

Notice in our diagram that SD-WAN is not a point along the line; it’s not a connectivity type or a data transfer method. The reality is that SD-WAN is a routing tool that enables flexibility and visibility into each WAN environment. Enterprises add new Internet connectivity to create a hybrid network and SD-WAN builds off that foundation, providing features to deploy and manage all the WAN connections. In the end, you need MPLS, Internet connectivity, and SD-WAN all working together. As such, hybrid networking with SD-WAN is without question the recommended choice.

SD-WAN cost savings: what can you realistically expect?   

Indeed, cost savings can be gained from transitioning MPLS connections to Internet connections, but savings as high as 90 percent can be considered false advertising. Numbers that high are likely to be a one-off anomaly where a customer transitioned all connections from MPLS to public Internet and dropped their WAN optimization tools. For the majority, however, that’s not a realistic scenario.

Just because you can switch ALL your MPLS sites to public Internet doesn’t mean that you should. In fact, I don’t recommend public Internet unless the site or application is truly an optional activity (e.g. Facebook and YouTube) or it’s a failover plan. Here’s what the real world looks like: For most enterprises, the number of access points that transition from MPLS to public Internet is very few—only one or two instances. In our experience, we see that transition generate an estimated savings of 0-40% at best for our customers. 

We just published a new case study in which our SD-WAN customer saved 40 percent—that savings was attributed to both consolidating vendors and transitioning MPLS to Internet. We were reluctant to promote that savings figure, because we want buyers to understand that such savings are not the norm.

The takeaway: cost shouldn’t be your only driver for SD-WAN adoption. That should rest upon the overall digital transformation agenda. SD-WAN delivers very powerful productivity savings as well as network performance boosters, flexibility, management tools, visibility, analytics and remote-control features. Those features often help you gain indirect cost savings and most importantly a competitive advantage.


Paul Ruelas is director of product management at Masergy, which owns and operates the largest independent software-defined platform in the world, delivering hybrid networking, managed security and cloud communication solutions to global enterprises.

Paul brings over 26 years of expertise in global networking, 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, speaking and writing on topics such as hybrid networking, SD-WAN, NFV and cloud connectivity.

Prior to joining Masergy, Paul worked at Verizon and Frontier Communications.

The opinions expressed in this blog are those of Paul Ruelas and do not necessarily represent those of IDG Communications, Inc., its parent, subsidiary or affiliated companies.

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