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



SD-WAN solutions are seeing an increase in popularity as traditional WAN architectures increasingly fail to meet the expectations of a modern-day enterprise network. The increase in cloud adoption, the rise of Saas (Software as a Service) apps, and the use of high bandwidth services such as video conferencing have contributed to a massive increase in traffic, for which traditional WANs are not ready. An SD-WAN solution can help an enterprise overcome these problems, improve application performance, simplify management while reducing costs and our previous post touched on the top 6 cues that your organization needs to adopt SD-WAN.

In addition to considering the initial investment, it is important to look at the ROI of SD-WAN to properly assess the value of adopting an SD-WAN solution. Once the wide range of ROI benefits is identified, the business case for SD-WAN becomes clear.

CAPEX/OPEX Benefits

One of the most straightforward and obvious benefits of SD-WAN is the reduction in operational expenditure made possible by the reduction in MPLS costs. MPLS connections are known to provide reliable connectivity and guaranteed performance for applications, but it has several downsides such as being considerably expensive and requiring a complex setup.

Replacing costly MPLS circuits with inexpensive and flexible broadband links is the main principle of an SD-WAN solution. Broadband links have a considerably lower cost per Mbps per month when compared to MPLS and replacements should bring immediate cost reduction. The following shows how an ROI calculation can be done;

Total branch connectivity cost per year = MPLS cost per year + Broadband cost per year

MPLS cost per year = MPLS cost per month × No. of links per branch × No. of branches × 12

Broadband cost per year = Broadband cost per month × No. of links per branch × No. of branches × 12

Suppose an organization having 10 branches is evaluating the options to increase bandwidth due to the unsatisfactory performance of internet applications. The organization is having ten 2 Mbps MPLS links to connect to each office and each location is having a 50 Mbps broadband link. Suppose each MPLS link costs $500 per month and each broadband link $100 per month.

The following options are considered for achieving increased bandwidth.

  •   1. Increasing the no. of MPLS links per site
  •   2. Moving to an SD-WAN solution and utilizing broadband links
Option 1:

Adding 2 more 2Mbps MPLS links per branch is considered

10 x 2Mbps MPLS links (existing) $500 x 1 x 10 x 12 = $60000
10 x 50Mbps broadband links (existing) $100 x 1 x 10 x 12 = $12000
20 x 2Mbps MPLS links (new) $500 x 2 x 10 x 12 = $120000
Total Annual cost $192000
Option 2:

Deploying an SD-WAN solution and adding 1 additional 50Mbps broadband link per branch.

10 x 2Mbps MPLS links (existing) $500 x 1 x 10 x 12 = $60000
10 x 50Mbps broadband links (existing) $100 x 1 x 10 x 12 = $12000
10 x 50Mbps broadband links (new) $100 x 1 x 10 x 12 = $12000
Total Annual cost $84000

In this example, the cost saving is clearly visible. The organization can achieve 56% yearly savings by deploying an SD-WAN solution. Additionally, broadband links have the added advantage of providing direct access to cloud apps, improving application performance, and providing a multifold increase in bandwidth at a much lower cost.

In a similar way, SD-WAN paves the way for CapEx reductions. Due to its virtualized nature, it can make use of COTS (Commercial off-the-shelf) hardware instead of specialized hardware devices reducing costly support contracts and further driving down costs.

Productivity and Application Performance Improvement

Although the reduction in CapEx/OpEx is noticeable at first glance, improvements in productivity and application performance deliver a similar or at times even higher amount of returns.

It has become increasingly common for enterprises to rely on apps hosted on cloud or SaaS apps. Traditional WAN architectures where all traffic is backhauled to the data center do not provide the expected experience anymore. It adds delay and degrades application performance. An SD-WAN primarily addresses this issue by providing direct access to the cloud through internet connectivity. It can provide application-aware routing where traffic is routed dynamically based on application priority and required performance, leading to improved application performance and user experience which ultimately leads to greater business productivity.

Because of its virtualized architecture, SD-WAN offers great ease of deployment. It allows new branches and network devices to be brought online far more quickly. Traditionally this would involve specialized IT personnel to visit the branch site and configure the device locally. SD-WAN eliminates the need for this by providing a centralized management console where new devices can be configured remotely. It allows for global automation and orchestration contributing to higher productivity and agility.

Increased Network Uptime

Due to increased connectivity between systems and cloud usage, costs associated with network outages in the modern day can be quite substantial. It is quite common for configuration errors to be the cause of such network outages. This can happen due to human errors introduced when making configuration changes manually. SD-WAN decouples WAN transport services from the control function, allowing the centralization of the control function to a location such as the headquarters of an organization.

This provides a single-pane-of-glass view of the enterprise WAN to the network operators and gives them the ability to define policies and security mechanisms from a central point and push them to the WAN edge. As expected centralization allows for a greater degree of automation which makes configurations less error-prone. As SD-WAN can unify multiple transport types such as MPLS, broadband, and LTE, it gives global visibility into the network which would not be possible in a regular WAN. Thus, SD-WAN eases ongoing management of the WAN and contributes to greater network uptime.

Conclusion

It is clear that traditional WAN architectures are not ready to handle expanding cloud app traffic and are not suited to make use of automation, both of which are necessary if an enterprise is looking to improve its productivity. The reduction of MPLS circuits alone drives costs down greatly and makes a strong case for SD-WAN, but the returns are not limited to OpEx benefits.

The broad range of ROI benefits of SD-WAN including cost reduction improved user experience, and simplified management highlights why an enterprise would need an SD-WAN in the next five years. Adoption of SD-WAN accompanied by hSenid Mobile’s consolidated SD-WAN Manager can assure the realization of maximum ROI for your organization.




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