It's clear to vendors that partners are demanding the technology, and the vendors are responding.

James Anderson, Senior News Editor

April 19, 2019

9 Min Read

SD-WAN is hot, hot, hot.

That five-letter acronym was plastered all over booths and signs at last week’s Channel Partners Conference & Expo. It’s clear to vendors that partners are demanding the technology, and the vendors are responding. Some 60 companies are competing in SD-WAN, according to a Comcast executive, and each is in a race to differentiate its product from the competition.

We talked to several vendors at last week’s show to learn about what makes them unique and where they think the market, and the channel, are trending.

Comcast Eyes New Partners

Comcast Business channel leaders suggest that a new demographic of partners may be adopting their solution soon as agents and managed service providers converge. Craig Schlagbaum, vice president indirect channels, said IT partners like those of Cisco and VMware might choose Comcast for SD-WAN.

The key difference, according to Schlagbaum, is that Comcast owns its own network. A recent Heavy Reading survey of the channel found that 52 percent of partners sell a carrier-based SD-WAN. Cisco and VMware’s respective Viptela and VeloCloud offerings fall into the over-the-top category, which Schlagbaum said won’t cut it for some partners.


Comcast’s Craig Schlagbaum

“Sooner or later they’re going to have to decide if this offering would be equally attractive to their clients, because sooner or later they’re going to be involved with the network somehow, some way,” he said. “Their customer has to have network for them to manage it.”

Comcast offers SD-WAN outside of its network as well. Jody Hagemann, senior director of SD-WAN product management, said many customers use a combination of Comcast SD-WAN with 4G LTE backup from Verizon.

“If a customer has locations in Denver, Phoenix, L.A., New York and San Francisco, I can handle all of those, even though several of those are Spectrum’s footprint, not Comcast’s,” Schlagbaum said. “We may even sell an ILEC network if it makes sense. Because obviously the customer needs to manage it all over the place, no matter where the network is and who the network is.”

Speaking of Spectrum Enterprise — the fellow cableco launched its own SD-WAN offering last month. The companies’ products are demonstrably different due to Versa Networks supporting Comcast and Nuage Networks supporting Spectrum, but time will tell which offering the channel and its customers prefer.

“A lot of our partners not surprisingly are partners with them too, so they’ll have to be the judge of that at some point in time. If they use us, invariably we’re going to be using Spectrum’s network for the locations that are out of footprint,” Schlagbaum said.

Comcast offers SD-WAN as the first virtual network function (VNF) on its ActiveCore software-defined networking (SDN) platform. Hagemann spoke to us earlier this year, telling us about the company’s plan to roll out …

… several new VNFs in 2019, including security, routing, voice and Wi-Fi.

The company has also revamped its go-to-market angle.

Comcast has hired new personnel – including marketing, sales and operations – dedicated exclusively to SD-WAN. Hagemann said the ability to send solution architects on site to explore a customer’s WAN architecture is huge. She said an opportunity exists for the provider that gives customers information they’ve sorely lacked about their network.


Comcast Business’ Jody Hagemann

“Customers have not touched their WAN infrastructure in 10-15 years,” she said. “So now SD-WAN comes in, and the big pain point is not so much selling it and selling the value of it; it is now implementation.”

Comcast Business executives have embarked on a marketing and education road show in multiple key cities, where they’ll speak to local partners about the solution. Most importantly, Comcast has increased compensations for the partners that sell SD-WAN.

“We’ve gone beyond our normal standard compensation to a higher residual component, as well as upfront elements that allow the partner to earn more,” Schlagbaum said.

Schlagbaum and Hagemann served up a particular juicy observation about their SD-WAN customers. In contrast to studies by Avant and protestations by experts, businesses aren’t taking a hybrid approach with MPLS and SD-WAN. That was a surprise to Schlagbaum, who said he expected a mix of the two.

“Instead we’re seeing more of a rip-and-replace situation where people are just taking out MPLS. Unlike the carriers, we have no legacy MPLS network because we never used an MPLS solution,” he said. “We’re sort of unconflicted that way, where we can go after those kinds of customers and not worry about eroding our revenue base. If you’re one of the ILECs, you don’t want to necessarily get rid of one revenue stream unless you’re increasing the other one to the same equivalent amount.”

There’s a caveat to that. Comcast Business primarily serves the midmarket, although it has been landing some larger customers. Hagemann noted that attendees of the recent WAN Summit – which is geared toward the enterprise – tended to say that they are keeping their MPLS for now.

“We’re seeing patterns emerge, and I think enterprise will get there,” Hagemann said. “They’re obviously a little more cautious than a midmarket customer might be.”

Steve Garson of NetworkWorld compiled a lengthy recap of those enterprise at last year’s WAN Summit.

Open Systems

We wrote last month about Open Systems’ foray into the U.S. market. The vendor teamed up with Avant Communications in order to …

… get access to American MSPs. The company has shifted to a channel-first strategy. Head of North American Channels David Nuti told Channel Partners that Open Systems is going for quality over quantity when it comes to master agent partnerships.

The beauty of Open Systems growing its presence in the Americas, Nuti told Channel Partners, is that the company is already mature, having started as an engineer-led security firm in 1990.

To call it an SD-WAN vendor would be short-selling it. The Zurich-based company also provides security as a service, security operations center (SOC), app acceleration and other services. Nuti said that it offers the “most complete enterprise technology overlay for the WAN in the world.” SD-WAN is a small component of the platform, according to Nuti.

“There’s a natural inclination to want to ride the wave of interest that SD-WAN has, even though it’s very difficult to find a consistent definition of what SD-WAN actually is,” he said. “I find humor in that. It’s one of the more abused terms in the industry today. Who isn’t SD-WAN might be a better question to ask these days.”

In fact, leading with only SD-WAN might be a great way to lose potential customers. Partners shouldn’t neglect the security story, lest they create a barrier-to-entry for themselves.

“In 2012 when I started to have SD-WAN conversations, that conversation could stand on its own. It would be in its own silo and be very unique, and nobody knew it. You fast-forward from there a couple years, and the security guys are in the room on the very first call, and they want to know what it is you’re talking about,” Nuti said.

We’ve seen a tug-of-war between networking-focused and security-focused vendors in the last year as the latter companies have been marketing their own solutions. Barracuda, for example, argues that the networking folks can’t be trusted with security.

So what do you bring up first to the customer: SD-WAN or security? There’s no right answer to that, Nuti says.

“What if you don’t have to have a predisposition on what the conversation needs to be and you can have it wide open and know that you have a platform that fully integrates that from the get-go and that there is no wrong starting point,” he said. “You can start from either end and have a much broader conversation than any supplier in the space.”

Ecessa’s Journey

We also chatted with CEO Mike Siegler at Ecessa’s booth.


Ecessa’s Mike Siegler

The vendor announced an extensive product road map in December, entailing all the enhancements it would make for its platform in 2019. Those updates include Layer 7 web filtering, and intrusion detection and prevention systems. Siegler told Channel Partners that security is “table stakes” for SD-WAN.

Ecessa will also allow its customers to connect to AWS or Microsoft Azure. Siegler said the message of SD-WAN resiliency is gaining traction with customers.

“[We’re] setting the expectation that outages should be unacceptable for customers at their locations,” he said. “And as we get that message out, people get it, and we make it a profitable proposition for them.”

Siegler acknowledged a common sentiment we heard at the show: that the SD-WAN market is …

… crowded. Promoting SD-WAN has become almost the rule, rather than the exception. But Ecessa stands out from the pack in its embrace of a premises-based platform.

“The control plane and data plane stay together. It benefits different verticals, like banking, health care, finance, where they want to have it more locked down. They want to have it less vulnerable than cloud services, cloud gateways and cloud subscription services that may fail,” Siegler said.

The company announced Leonard DiMiceli as its new vice president of channel sales and Sam Plombon as its new account manager.

Cradlepoint’s State of the WAN

Cradlepoint and IDG revealed some telling numbers about SD-WAN adoption.

The company’s annual State of the WAN report found that only 17 percent of businesses have deployed the technology, while another quarter will deploy it in the next half-year. The midmarket respondents cited intelligent WAN selection as the biggest driver of adoption.

The results came from more than 500 IT decision-makers working for businesses of 500-10,000 employees. Find the white paper here.

Quick Hits

  • GTT Communications’ channel chief identified SD-WAN one of the company’s chief deal-winners. The company has succeeded particularly with customers that have sites in both the U.S. and across the world. Check out our Q&A with Rob Westervelt.

  • Bigleaf Networks announced it’s serving customers in three major European cities. The move, which will be followed by other expansions in Asia and Europe, represents Bigleaf’s move onto the global stage. Read its announcement.

  • Jenne signed on to distribute FatPipe Networks’ product. FatPipe said its WAN path controllers are among the most advanced. Read Edward Gately’s story.

  • CloudGenix announced a $65 million funding round and plans to expand its channel program. Read their CEO’s comments.

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About the Author(s)

James Anderson

Senior News Editor, Channel Futures

James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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