How SD-WAN Reduces OPEX and CAPEX

3 Mins read

The hype around SD-WAN is palpable. Pull back the hype, and you will find that SD-WAN is a way to bring together several different transport mechanisms, be they MPLS, LTE, broadband internet, or a private network. 

Key  SD-WAN benefits – OpEx and CapEx Savings

In evaluating the SD-WAN benefits, one can look at it from a technical or a business perspective. Here, we will look at SD-WAN’s business benefits and evaluate the OpEx and CapEx savings that it can help achieve. 

CapEx savings stem from many areas; three of the most impactful ones are:

Cost of Equipment: As the number of branch locations and remote offices expands, so does the equipment cost. Each branch office needs a set of hardware elements to connect to the HQ or datacenter. These numbers can add up to a significant sum. 

SD-WAN has the benefit of a decentralized architecture, where the control plane is delinked from the switching plane. This decentralized architecture allows for cheaper CPE.

Box Stacking: Plain old connectivity is not the only requirement at branch locations. Additional functions like WAN optimization, application acceleration, security, and cloud connectivity are essential. The legacy solution addresses this requirement by adding multiple boxes, one for each feature, resulting in box-stacking. Box-stacking pushes up the cost of equipment (CapEx) as well as power, staffing, and maintenance costs. (OpEx). 

In contrast, an SD-WAN solution typically integrates various functions like WAN optimization and security within a single solution, resulting in substantial savings. Something that FlexiWan knows very well.

Let’s look at some areas of OpEx savings.

Eliminating or Reducing MPLS usage: MPLS subscription costs can quickly add up as the number of branch locations increase. The benefits of SD-WAN come from its ability to bring together multiple transport mechanisms like the Internet, LTE, and private Layer 2 networks. Multiple transport options allow the user to steer noncritical traffic away from the expensive MPLS links, thus providing substantial cost savings.

Cost of Maintenance: The rapid pace of technological innovation means that network engineers and other maintenance staff need to be retrained at regular intervals. Also, newer technologies may require new recruitments. All these add up to the operations and maintenance costs. 

SD-WAN solutions from vendors like Aryaka are provided as a fully managed service. This enables a pay-as-you-grow approach and eliminates/reduces the investment in hardware. 

The following are some of the popular Sd-wan use cases that result in OpEx and CapEx savings:

Banking and Retail Sd-wan use case:

The banking and retail sectors tend to have several remote branch locations. Traditional architectures rely on MPLS to connect these branch locations to the headquarters or datacenter locations. One of the SD-WAN benefits is that it can help optimize this cost by connecting remote branch offices via the internet to the closest SD-WAN point of presence. 

IT and Business Services Sd-wan use case:

IT and business process services sectors are heavy users of remote desktop services and unified communication services. They can benefit from SD-WAN’s built-in optimization algorithms that can detect real-time traffic and prioritize it over other traffic, thereby providing better service quality.

Manufacturing Sd-wan use case:

The manufacturing sector is investing in Industry 4.0 and smart factories. Industrial IoT devices and other sensors from these smart factories generate vast amounts of data transported to cloud storage locations for big data analysis. Another SD-WAN benefit is that it provides an efficient means to transport this traffic. 

A related trend is the migration of Manufacturing Execution Systems (MES) to the cloud. As these mission-critical systems migrate to the cloud, a robust transport mechanism to ensure that this mission-critical traffic is always prioritized over others is critical.  SD-WAN can detect application traffic and route it through the most appropriate links. 

Universities and International Education Sd-wan use case:

In these times of COVID, many universities have shifted to online classes. But ensuring that all the international students are connected securely to these platforms is a complex challenge requiring huge investments in IT. SD-WAN solutions come with a built-in remote access solution that is ready to use right out of the box.

Managed SD-WAN for the Cloud-First World

From the previous sections, it is clear that the benefits of SD-WAN benefits extend beyond just technical superiority. The business and commercial benefits are probably the ones that tip the scales in its favor. What is perhaps left unsaid is the relationship between these benefits and the SD-WAN deployment model. A DIY or a carrier deployed SD-WAN may address some of the technical advantages, but to get the maximum out of the SD-WAN adoption, one needs to look at the deployment model. Many benefits like reduced Opex, Capex elimination, and savings in maintenance are only possible with a fully managed Cloud-First SD-WAN solution.

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