As Level 3 Communications enters the SD-WAN market with a new offering, the company's CTO, Andrew Dugan, is making it clear that SD-WAN is but one tool in Level 3's networking toolkit, and that it takes the entire toolkit, including MPLS (Multiprotocol Label Switching) and traditional private networking technologies, to put a good network setup together.
Previously, in part one of this Telco Transformation Q&A, Dugan offered Level 3's viewpoint that MPLS, SD-WAN, and related technologies all serve to complement each other more than directly compete with each other. Now, in part two, he explains in greater detail exactly how Level 3 Communications sees that vision being achieved via network augmentation.
Telco Transformation: Last time you mentioned customers not finding all of their network needs met by more traditional networks. What has been missing? What are the specific capabilities that have been missing from customer MPLS-based networks or networks in the market -- even in particularized verticals -- that SD-WAN can help offer?
Andrew Dugan: Maybe it helps to describe what Level 3's vision is for a networking solution that fits the new world of hybrid networking. We do think that SD-WAN is a key part in building our customers' hybrid networks, but our longer-term vision is to couple that SD-WAN capability, which lets you leverage multiple access types with centralized policy management, with other networking solutions. And we do believe that MPLS private networking will continue to be a key part of our customers' network needs for a while.
In addition, we also think that our customers have security needs that aren't met by traditional SD-WAN technologies. SD-WAN does offer things like secure tunneling, but it doesn't offer the full suite of security solutions that our customers want. They want things like intrusion detection, all the capabilities that come along with next-generation firewall and capabilities like anti-malware. Those aren't inherently part of an SD-WAN offer, but they are a critical part of enterprise customer networking needs. So the ability over the longer term to offer both an SD-WAN capability over public networking plus these capabilities that come along with more traditional MPLS and private networking offers is going to be an important part of meeting the market need. And we think Level 3 is positioned -- being an MPLS service provider today -- to meet those needs.
TT: How else do you see these developments in SD-WAN and this increased demand for SD-WAN-type capabilities impacting the MPLS industry and the traditional connectivity industry as a whole?
AD: We do see that customers want to augment their wide-area networking using SD-WAN technologies. In some cases, prior to SD-WAN or hybrid networking being available, customers would traditionally meet those with MPLS services. We are seeing a shift of some customers meeting some of their capacity needs using other access technologies and other networking techniques over a public infrastructure. That transition is happening. From a Level 3 perspective, we still see market opportunity available in the private networking space given that we don't have a large market share there. So we still see growth available in that space, and we also see growth available in this SD-WAN hybrid networking market.
TT: So let's break it down a little bit. In terms of specific industries, specific verticals, use cases, etc., where do you see the biggest growth potential for SD-WAN versus hybrid? Retail? Healthcare? Manufacturing? Somewhere else?
AD: The growth opportunity is available across all of those verticals. You can imagine it's going to apply first, though, to those market verticals that have a high distribution of their WAN locations, so verticals with a lot of branch offices or retail that needs to get to a lot of locations. They're going to want to leverage low-cost access technologies to be able to bring those locations onto a secure WAN. But we see the use cases for those types of applications. I'll give a few use cases.
The first use case is those types of customers that want to use SD-WAN to build that private network over the Internet; so those branch offices bringing them onto the private network or retail locations or smaller offices. These are customers who have a highly distributed WAN that want to do a better job with centralized policy management. With traditional networking technologies, that policy management is done on a site-by-site basis. One of the promises and one of the capabilities of SD-WAN is that you can manage that centrally and have consistent policy pushed across that highly distributed set of edges.
Another use case is customers that want to use performance-based routing and application steering to leverage lower-cost technology, where they'll direct low-priority traffic over that less costly -- and potentially less reliable -- access method and make sure that, using their performance-based routing, their applications are running over the best-performing or optimal path.
There are other use cases that we see showing up in our customer RFIs, and one of the capabilities that customers are looking for is to future-proof their network with network functions virtualization (NFV). They want the capability or promise down the road to be able to add digital services onto their CPE [customer-premises equipment] by leveraging NFV.
— Joe Stanganelli, Contributing Writer, Telco Transformation