SD-WAN ROI claims are not real.

August 3, 2022

Matt Krieg

Team working in the office.

When SD-WAN came to market in 2014 and got actual market adoption in 2015 there was much talk about the return on investment or lower total cost of ownership that SD-WAN could provide. We saw many studies around how much using SD-WAN and using commodity broadband with SD-WAN could save enterprise customers. The claims were exaggerated claims of 85-90% lower total cost of ownership.

In reality, we saw that the total cost of ownership of SD-WAN was, in fact, higher.

The soft cost was astronomical. The operational overhead and administrative burden of building and managing the SD-WAN overlay. Policy creation and traffic engineering are required to ensure traffic takes the correct path. These were operational burdens that the enterprise wasn’t equipped to take on.

We also saw that the enterprise was unwilling to give up the SLA that came with MPLS for their mission-critical traffic. Patient data in healthcare. Transactional data in financial services. Machine control in manufacturing. Network architects were unwilling to take the risk of utilizing internet circuits as their underlay for these types of traffic.

From an actual bandwidth cost perspective, enterprises could utilize SD-WAN to enable the use of cheaper bandwidth for non-mission-critical traffic. So, they could stem the growth of MPLS but not remove it. What we saw was cost avoidance, not cost savings.

This cost avoidance was great, but it came at an expense (nothing in this world is free). The operational burden forced many enterprises to turn to their telco for help managing their SD-WAN deployment. What did this do? It killed any cost avoidance that came with the move to SD-WAN and locked the enterprise back into multi-year inflexible contracts with their telco.

We also need to add the challenges and costs of a multi-cloud on-ramp to this equation. How are enterprises supposed to provide access to their cloud workloads with this rigid telco-managed infrastructure? Push the traffic to the internet and use the cloud ingress point. Build network infrastructure at colocation facilities and backhaul traffic to them for cloud access. These options are expensive and sub-optimal.

So, what options do enterprises have?

As of today, enterprises can leverage the Graphiant Network Edge service. This service utilizes the Graphiant Stateless Core and delivers the private any-to-any connectivity of MPLS with the flexibility of the internet.

Early customer studies have shown a 60% reduction in bandwidth cost versus traditional networks. Because the Graphiant service is a private network, enterprises don’t have the operational burden they saw with SD-WAN.

I’m happy to talk you through the math.

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