SD-WAN, SASE markets to grow despite challenges

Managed SD-WAN services lack clear standardization

As networks changed in response to the COVID-19 pandemic, SD-WAN adoption eventually surged to support more distributed network designs. This uptick reflected how prevalent work from home had become, as organizations sought new strategies to provide remote employees with secure network access. The market for SD-WAN MSPs grew more than 30% in revenue in 2021, according to MEF, and the surveyed experts said they foresee another 30% increase in 2022.

In Futuriom's "SD-WAN/SASE Managed Services Survey" report from April 2022, Scott Raynovich, founder and chief analyst at Futuriom, said he also expects to see growth in the SD-WAN market. Futuriom projected a compound annual growth rate (CAGR) of 34%, with the market reaching $3.5 billion by 2022 and $4.6 billion by 2023.

Despite these increases, SD-WAN service providers experience challenges due to a lack of defined standards and interoperability, MEF said. When SD-WAN first emerged, organizations had two options from which to choose: DIY and managed services. DIY SD-WAN requires an organization's IT team to configure and manage the architecture itself. For managed services, MSPs are responsible for configuring and managing an organization's SD-WAN.

Organizations flocked to managed SD-WAN services to avoid the headache of configuring the technology themselves. But implementing managed SD-WAN often presents its own challenges. Standards organizations like MEF are working to outline specifications for new technologies, but service providers have yet to come to a consensus on how to standardize SD-WAN. Services from one vendor may be incompatible with another, which creates challenges on how to incorporate services between vendors.

SD-WAN challenges outlined by MEF include the following:

• Multivendor SD-WAN complexity. Service providers use and provide SD-WAN services from different vendors despite interoperability issues, causing management and operation complexities.
• Security integration. Confusion remains about how to enforce security in SD-WAN environments, largely because the industry hasn't defined standard security terminology or requirements. Additionally, the SD-WAN sector faces an absence of cybersecurity experts who can migrate customers from legacy security services to SD-WAN security.
• Difficulty providing service-level agreements. The challenge of managing the overlay and underlay networks of an SD-WAN makes it difficult for service providers to guarantee customers optimal network performance through service-level agreements (SLAs).
• Minimal customer education. Customers are largely uninformed on how SD-WAN service providers operate.

SASE services are also difficult to define

SASE is an emerging cloud-based technology that integrates network and security functions into a single service and distributes them directly to endpoints and users. An innovation of this scale holds the promise to overhaul how traditional network management operates, but it can be a complicated endeavor for providers.

SASE providers projected a revenue increase of more than 50% in 2022, MEF reported. According to a Dell'Oro Group report published in March 2022, the unified SASE market -- as opposed to disaggregated SASE that uses a multiproduct or multivendor approach -- should reach $1.5 billion by 2024, with a five-year CAGR of 56%.

However, SASE is a relatively new technology -- Gartner conceived the term in 2019 -- which creates complexities around standardizing the framework. Many of the SASE challenges are comparable to those of SD-WAN but are more complex because the technology is still in the early stages of development.

SASE challenges that MEF cited include the following:

• Lack of industry standards. SASE offerings lack a standardized definition specifically for those provided by networking MSPs, MEF said. MEF is attempting to tackle this challenge by working on its W117 standard.
• Customer education and migration. SASE's limited number of industry standards has resulted in customers lacking an understanding about how the services work. Additionally, most organizations have siloed networking and security teams. According to MEF, it will take years to consolidate network and security groups into one SASE-based team.
• Incomplete offerings. Available SASE offerings from different vendors are currently incomplete, which means MSPs must integrate potentially incompatible services together to deliver a complete offering to enterprise customers.
• Inconsistent security services. Security teams struggle with providing ideal security in complex SASE environments because sufficient security requirements have yet to be defined.
• Tool shortage. The SASE market is still new, so service providers struggle with determining the types of tools, testing and certification to offer to enterprises.
• Defining SLAs. SASE providers struggle with providing SLAs to customers on a scale greater than that of SD-WAN service providers.

What's next for SD-WAN and SASE?

SD-WAN and SASE both provide ways to connect dispersed users to a more efficient, manageable and simplified network, among other benefits. As networking enters a new era of complex, distributed and hybrid environments, organizations are investing in the latest technologies to make these networks easier to operate. Both the SD-WAN and SASE markets are booming in response to this trend, but challenges stemming from the complexities of both technologies threaten to stall their momentum.