Unlocking the ROI and Long-Term Benefits of SD-WAN

IT & DATA MANAGEMENT RESEARCH,
INDUSTRY ANALYSIS & CONSULTING
Unlocking the ROI and
Long-Term Benefits of SD-WAN
Shamus McGillicuddy
Research Director
Enterprise Management Associates
@ShamusEMA
Shamus@emausa.com
Moritz Mann
Head of Product Management
Open Systems

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INDUSTRY ANALYSIS & CONSULTING3 © 2019 Enterprise Management Associates, Inc.
Featured Speakers
Shamus McGillicuddy, Research Director, EMA
Shamus has more than 12 years of experience in the IT industry, as an industry analyst
and journalist. At Enterprise Management Associates (EMA), he is the research director
for the network management practice.
Moritz Mann, Head of Product Management, Open Systems
After finishing his studies, Moritz joined Open Systems AG directly. Between 2012 and
2017, he held the responsibility for Mission Control Operations in Zurich and Sydney,
after having worked in different roles in development, professional services and sales. In
mid-2017, he became the chief product officer, responsible for product development in
the market.

Unlocking the ROI and
Long-Term Benefits of SD-WAN
Shamus McGillicuddy
Research Director
Enterprise Management Associates
@ShamusEMA
Shamus@emausa.com

Why is Everyone
Buying SD-WAN?

Understand the SD-WAN Opportunity
6 © 2019 Enterprise Management Associates, Inc.
• Enterprises are transforming networks for many reasons
• SD-WAN is transformational technology
• The value is business enablement, not saving money

Why are enterprises transforming their networks?
• Technical initiatives
1. Security
2. Hybrid cloud
3. IoT
4. Multi-cloud
• Business initiatives
1. Business growth
2. Digital transformation
3. Cost reduction
4. M&A
Drivers for SD-WAN Transformation

Prospects for SD-WAN ROI are Good
Most enterprises expect to earn ROI within 3
years or less
Reduced OpEx is not the main driver of ROI
Uptime and security can be a source of ROI
payback

• ROI calculations
rely on cost
savings
• SD-WAN
adoption is NOT
about cost
savings
Slide 9 © 2019 Enterprise Management Associates, Inc.
Primary Business Drivers of SD-WAN Adoption edit
Master title style
35%
35%
35%
31%
31%
29%
28%
27%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Solve skills gaps within IT
organization
Cloud enablement
Improved network security
Rapid and flexible delivery of
network connectivity and services
Improved network/application
performance
Improved network/application
visibility
Reduce complexity
Reduce costs
Sample Size = 297, Valid Cases = 297, Total Mentions = 747

ROI Expectations for SD-WAN Investments
28%
37%
22%
4%
4%
5%
0% 5% 10% 15% 20% 25% 30% 35% 40%
ROI after 1 year
ROI after 2 years
ROI after 3 years
No positive ROI after 3 years
We have not invested in this product
We do not track ROI with this product
Sample Size = 305

Building Your Case
for SD-WAN ROI

Hard and Soft Benefits Applied to ROI Calculations for
WAN-Related Investments Master title style
51%
47%
44%
36%
34%
0% 10% 20% 30% 40% 50% 60%
Reduced downtime
Reduced security risk
Reduced OpEx - recurring external costs (e.g., MPLS
prices, software subscriptions)
CapEx avoidance (e.g., savings on hardware investments)
Reduced OpEx - personnel

Reduced Downtime
• How much does downtime cost your
business?
• Typical enterprise experiences 4.4 hours
downtime per year
• EMA research: 33% of network service
trouble caused by config errors/changes
• Configure SD-WAN via central GUI
console
 Remove CLI-based config errors

Reduced Security Risk
• Average cost of security breach: $3.86
million*
• 58% of distributed enterprises experienced
breach caused by a remote site or branch
office in 2018
• WAN transformation increases risks
• Internet connectivity
• Direct cloud connectivity
• Secure SD-WAN solutions can reduce risk
of a breach*https://www.ibm.com/security/data-breach

Reduced OpEx – MPLS Versus Internet
• SD-WAN enables internet as a
supplement or replacement for MPLS
• MPLS: $100 to $300 per Mbps per month
• Broadband: $5.39 to $40 per Mbps per
month*
• Increase overall bandwidth at fraction of
cost
*https://businessinternet.com/pricing-data

CapEx Avoidance
• Skip refresh of enterprise routers
• Typical enterprise router with
customer support starts at $1500 to
$2000
• Install SD-WAN endpoints
• Commodity hardware with software
subscription converts most CapEx to
OpEx

Reduced OpEx - Staff
• Eliminate manual processes
• Unlock productivity of high-level engineers
SD-WAN adoption does
not lead to layoffs
•Typical network engineer spends
•75% of his day fixing problems
•25% working on strategic projects
Typical enterprise
devotes 8 to 15 FTEs to
WAN management
• How many hours can be unlocked by SD-WAN’s
streamlined management?
Average CCIE costs
$158,000 to employ

The Long-Term Value
of SD-WAN

Direct and Secure Cloud Connectivity
• Indirect cloud connectivity adds latency
• Direct cloud connectivity adds risk
• SD-WAN simplifies secure, direct connectivity
• 81% of enterprises use SD-WAN to directly connect
branch offices to public clouds

Network Agility
• Constant change
Digital enterprises require agility
• Every box needs love and care
Legacy networking: Manual moves, adds, and changes
• No more truck rolls
SD-WAN: Programmatic, centralized management

Click to edit Master title style
• SD-WAN can be
a force multiplier
• Enterprises
usually co-
manage SD-WAN
with an MSP
37%
43%
10%
9%
1%
0% 10% 20% 30% 40% 50%
Hybrid - Service provider manages
complex tasks, our staff manages
minor issues via a portal
Hybrid - Our staff manages complex
tasks, service provider manages
minor issues
Outsourced - Service provider
handles most of operations
Internally managed - Our staff
manages most of operations
We are still exploring our preferred
strategy
Sample Size = 297
Enhance Your Team With Hybrid Operations

Network Resiliency
• SD-WAN offers performance
monitoring and reporting
• Dynamic hybrid connectivity
reduces service interruptions
• Integrated security reduces
incidents

SD-WAN Pitfalls to Avoid

Enterprises Identify their Top SD-WAN Challenges
33%
28%
28%
27%
26%
24%
23%
22%
19%
2%
0%
0% 5% 10% 15% 20% 25% 30% 35%
Integration with existing security architecture
Network team skills gap
Product maturity (e.g., buggy code, missing features)
Interoperability with legacy network technology
Interoperability with other SD-WAN solutions
Operations - tools and processes don't sufficiently support SD-WAN
Vendor maturity (e.g., poor sales engineering or customer support)
Cultural - network team resists transition to SD-WAN
Business value is unclear
Do not know
Other

Integration With Existing Security
Architecture
• Legacy security will
remain in place for now
• Focus on SD-WAN
vendors with strong
security story
• Define who owns what:
NetOps versus SecOps

Network Team Skills Gaps
• Old-school mindset: box-by-box
management
• SD-WAN mindset: The network
is a platform for services
• GUI consoles
• Integrated service assurance
• API programming
• Cloud integration

SD-WAN Product Maturity

Interoperability With Legacy Networking
• No one does a 100% cutover on the first day
• SD-WAN sites and traditionally routed sites must
communicate
• Does your SD-WAN solution have a mature
routing stack?

Final Thoughts
• SD-WAN is about network
transformation
• SD-WAN ROI is about more than
cutting costs
• SD-WAN is both a technological
and cultural transition for your IT
team

The state of SD-WAN
How enterprises can implement and operate their SD-WAN
31
Do-it-yourself (DIY)
Requires significant IT resources and
know-how
Fast changing environment poses big
challenge and risk
Hidden costs
Conventional managed service
Usual approach is just like DIY, except
done by someone else.
Often doesn’t bring expected relief due
to service chaining and finger pointing.
Unpredictable costs with many hours of
professional services
Open Systems
Builds and operates its own secure SD-
WAN platform
Operations is always in mind resulting
in unrivaled customer experience
Predictable costs with a clear OPEX
model

Everything You Want in One
32
SD-WAN
Purpose-built SD-WAN,
integrated with best-of-
breed features and
technologies simplifies
operations
Built-in Security
50+ functions in
security layer bolster
security defenses
Our Experts Are
Your Experts
L3 engineers partner
with enterprise IT
teams to design and
operate the network
Managed secure SD-WAN by Open Systems

Thank you
For a free assessment visit our website:
www.open-systems.com/assessment

Unlocking the ROI and Long-Term Benefits of SD-WAN

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