Work-from-home Response due to COVID-19 Shows SD-WAN is as much about the Remote User as the Remote Branch

The 451 Take

Context

However, in the singular pursuit of a specific outcome – in this case, making multi-WAN branch networking cost-effective, which is necessary for startup companies and new product initiatives from established vendors to succeed – other related opportunities are missed. In the case of SD-WAN, the remote user wasn't part of the product roadmap, which is understandable since most remote and home users don't have multiple broadband connections, which is SD-WAN's target scenario. However, enterprises want to simplify their remote network management whether it's a remote office or a remote user. The time and energy spent developing and implementing network and security policies in the SD-WAN product could be used for remote users as well and is a natural fit.

This has played out before in other product verticals, but the most fitting example is the IPsec VPN gateways in the mid-1990s. The crop of startups was focused on the LAN-to-LAN model – which is common today, 20+ years later – but the killer application was remote users. Then, a startup came along targeting the remote user use case and walked away with the market while the competitors that focused initially on network VPN scrambled to pivot. There was no black swan event in the late '90s that brought about rapid change, so the market for LAN-to-LAN VPNs slowly evolved.

Strategy

The lesson learned from the SD-WAN and the IPSec VPN examples isn't for a startup to try to be all things to all customers; that's a path to failure. The lesson is for vendors to look for closely aligned use cases that will broaden the opportunity to find new customers. There is time for SD-WAN vendors to adapt to the new normal – it's not as if the window of opportunity is shutting – but vendors that start adapting their product roadmaps to the growing distributed workforce will be in much better shape in the coming years than those that don't.

Evaluate trends in your target customer base. The distribution of workers into smaller offices has been steadily growing over the years, and the COVID-19 pandemic causing governments to close offices has accelerated work-from-home scenarios. For example, WAN optimization vendors like Riverbed and Silver Peak made small appliances or even client software for remote offices because of a demand in a subset of the customers that had an increasing number of extremely small one-to-two-person offices and home-based teleworkers. A lasting outcome of the pandemic, noted in our research, is that a significant number of employers will expand their work-from-home policies once the pandemic passes. That will lead to a reduction in demand for branch offices, including SD-WAN, while increasing the demand for remote connectivity. SD-WAN vendors would do well to broaden their product offerings to include remote users or risk losing those customers to competitors with remote client support like Cato Networks, Nuage Networks in partnership with Asavie, Pulse Secure, Riverbed, Palo Alto, or any of the several VPN services.

Provide or enable cloud services. Pandemics like the coronavirus are black swan events, but service providers offering managed VPN connectivity were able to quickly ramp up capacity to meet demand. Cato Networks, for example, claims its mobile and remote user usage has more than doubled since January, and that it was able to meet demand by bringing on new capacity quickly. Other providers are claiming similar growth. Granted, the demand will likely fall back to pre-pandemic levels as people head back to offices, and the remaining users can be absorbed into existing remote connectivity strategies, but the ability to meet demand and capture new business is the definition of agile. A vendor providing a cloud service itself, or enabling and assisting its channel to build out managed and cloud services, will be in an equally good position for future growth and can capitalize on black swan events.

Partner with middle-mile providers. While the internet is fast and reliable, it may not be as fast or reliable as enterprise business requirements demand. Providing a faster, manageable alternative to best-effort internet gives customers an alternative for remote users. Middle-mile providers use their own networks or overlay existing interconnections to form backbones that are easy for enterprises to turn up and manage on their own. Integration with SD-WAN appliances takes the form of identifying the nearest or best-performing point of presence, and directing traffic to it before going to its destination. Being able to bring up SD-WAN peers in the provider network allows a fully managed on-ramp to cloud-hosted services.

Creating licensing for demand. Cloud adoption has many lessons, including the power of consumption-based licensing. While some products work well on fixed or perpetual licensing, a far greater number of IT products are better suited for consumption-based licensing, which allows customers to consume resources when and where they need them. ADC vendors like A10 Networks, Citrix, F5 and Kemp Technologies have used consumption-based licensing to remove the common hurdles for customers to effectively managed their capacity and respond as demand changes on-premises or in the cloud. SD-WAN is no different in this regard as demand can change quickly, but if customers can't respond to demand changes, it hurts their business. Cleary defined, simple consumption models along with cost monitoring and cost controls can encourage more usage rather than less and result in happier customers.