A History of SD-WAN

A History of SD-WAN

The Early Days – PPP and Frame Relay

In the 1980s, in order to connect LANs that were in different locations, you used point-to-point (PPP) leased lines. These were typically DS0 (56 Kbps) connections, and later on the faster, more expensive T1/E1 or T3/E3 connections which could also be purchased as fractional  T1 or T3 lines at a much lower cost point.

Frame Relay service was introduced in the early 1990s. The same connections used with PPP could be used to connect to a “cloud” from a service provider. It was no longer necessary to purchase and manage individual links between each of the locations. Compared to PPP, Frame Relay reduced monthly WAN costs with far fewer physical connections to manage. It allowed the expensive last-mile link bandwidth to be shared across multiple remote connections, and used less expensive router hardware than the PPP. The OpEx and CapEx advantages of Frame Relay created an explosion of growth of the corporate WAN around the globe and within 5 years of its introduction, even the most conservative enterprises had migrated to Frame Relay.

This article is a part of our guide series on SD-WAN.

MPLS Overtakes PPP

In the 2000s, MPLS became the successor to Frame Relay and was designed as an IP-based solution for carriers to converge voice, video and data on the same network. Today MPLS, the most common deployment of enterprise WANs, is a connectionless protocol, whereas Frame Relay is connection-oriented. This difference gave MPLS an advantage with reduced latency in live voice calls and improved QoS.

The Next WAN Innovation is Born

In April 2013, the board at ONUG convened for its bi-annual meeting at UBS headquarters where use cases were shared requiring solutions that suppliers were not yet providing nor addressing. The ONUG Board, invited a handful of guests to provide their input and feedback including Jim Kyriannis, Program Director for Technology Architecture at New York University, who was the one to contribute to the “Branch Office Has Multiple Paths to Headquarters” use case.

It was at the following ONUG Conference, hosted by JPMorgan Chase, where the use case was again presented and its title was transformed into SD-WAN. The ONUG Community was asked to vote on nine use cases at that meeting and it was Jim’s SD-WAN use case that earned the vast majority of the community’s vote. The ONUG SD-WAN Working Group was launched and collaborated with 17 vendors on proof of concepts, including discussions about the cost, risks, benefits, and value.

MPLS Pros and Cons

As MPLS adoption grew, more organizations began to understand that MPLS had economic and technological advantages over Frame Relay causing a rapid migration to MPLS. Today, a similar shift is occurring as enterprises begin looking to replace MPLS with SD-WAN based networks. What has caused this newest networking technology shift? What are the prime differences between MPLS and SD-WAN which are motivating organizations today to look for another solution?

SLAsSlow provisioning

Most businesses rely on MPLS services for its dependability with SLAs that guarantee latency, packet delivery, and availability. In the case of an outage, the MPLS provider resolves the issue within a stated period of time or pays the requisite penalties. However, MPLS is not budget friendly in comparison to Internet services. According to Telegeography, in Q1, 2017, median 10 Mbps direct-Internet access (DIA) prices are potentially 1/3 less expensive than MPLS. The time it takes to order and install MPLS circuits is another factor in today’s fast-paced environment. Depending on location, provisioning can take anywhere from 3-6 months.

Making the Move From MPLS to SD-WAN

With the combination of growing bandwidth requirements and restricted network budgets, SD-WAN resolves the issues of cost and network scalability that MPLS presents without sacrificing the quality of service. SD-WAN offers the following advantages:

  • handles a variety of connections and dynamically route traffic over the best available transport, regardless if that’s MPLS, cable, xDSL, or 4G/LTE.
  • provides redundancy and more capacity using lower cost links with multiple connections at each location.
  • measures the real-time transport quality (latency and packet loss) of each connection and applies Policy-based Routing (PbR) to route application-specific traffic over the most appropriate transport.

Bottom Line: the time of installation to delivery is far faster than MPLS. Some SD-WAN solutions offer zero-touch provisioning which allows the end-point to configure its connection to the WAN using the available mix of services at each location; a site can be brought online quickly without requiring a networking expert to be on-site for the install.

Industry Projections

Technologies are born from the necessity to solve challenges that arise over time. The rise of SD-WAN was born from the changing enterprise environment and the need to adapt WAN infrastructure to meet these needs while staying within budget.

Projections from industry experts agree that the migration from MPLS to SD-WAN has begun and is continuing to grow rapidly. Andrew Lerner, Vice President of Research at Gartner, predicts “By the end of 2019, 30% of enterprises will have deployed SD-WAN technology in their branches, up from less than 1% today.” Another indicator is revenue from SD-WAN vendors is growing at 59% annually, Gartner estimates, and it’s expected to become a $1.3 billion market by 2020.

SD-WAN solution providers such as Cato Networks can help organizations make the transition and meet the challenges of today’s WAN environments. Subscribe to Cato Networks blog to find out the latest developments in SD-WAN technologies. To learn more, read more about the SD-WAN and SASE projections from Cato Networks.


  • What is SD-WAN?

    Software-defined Wide Area Network (SD-WAN) devices sit in company locations and form an encrypted overlay between themselves across any underlying transport service including MPLS, LTE, and broadband Internet services.

  • What are the benefits of SD-WAN?

    Reduced Bandwidth Costs: MPLS bandwidth is expensive. On a “dollar per bit” basis, MPLS is significantly higher than public Internet bandwidth. Exactly how much more expensive will depend on a number of variables, not the least of which is location. However, the costs of MPLS aren’t just a result of significantly higher bandwidth charges. Provisioning an MPLS link often takes weeks or months, while a comparable SD-WAN deployment can often be completed in days. In business, time is money, and removing the WAN as a bottleneck can be a huge competitive advantage.
    Reliable Network Across the Unreliable Internet: The ability to connect locations with multiple data services running in active/active configurations. Sub-second network failover allows sessions to move to new transports in the event of downtime without disrupting the application.
    Secure Communications: Encrypted connectivity secures traffic in transit across any transport.
    Bandwidth on Demand: The capability to immediately scale bandwidth up or down, so you can ensure that critical applications receive the bandwidth they need when they need it.
    Immediate Site Activation: Bring up a new office in minutes, instead of weeks and months that it takes with MPLS. SD-WAN nodes configure themselves and can use 4G/LTE for instant deployment.

  • What are the key trends driving SD-WAN adoption?

    Enterprises built their networks using legacy carrier services, such a managed MPLS service. These services are expensive, require weeks to months to activate sits, and require waiting for the service provider to make even the simplest of changes.
    SD-WAN offers an escape from that bringing agility and cost efficiencies to IT networking. The SD-WAN connects locations with several Internet connections, aggregating them together with an encrypted overlay. Policies, application-aware routing, and dynamic link assessment in the overlay allow for the optimum use of the underlying Internet connections.
    Ultimately, SD-WAN delivers the right performance and uptime characteristics by taking advantage of the inexpensive public Internet with the security and availability needed by the enterprise.

  • What are the limitations of SD-WAN?

    Lack of a global backbone: SD-WAN appliances sit atop the underlying network infrastructure. This means the need for a performant and reliable network backbone is left unaddressed by SD-WAN appliances alone.
    Lack of advanced security features: SD-WAN appliances help address many modern networking use cases, but don’t help with security requirements. As a result, enterprises often need to manage a patchwork of security and networking appliances from different vendors (Like CASBs) to meet their needs. This in turn leads to increased network cost and complexity as each appliance must be sourced, provisioned, and managed by in-house IT or an MSP.
    No support for the mobile workforce: By design, SD-WAN appliances are built for site-to-site connectivity. Securely connecting mobile users is left unaddressed by SD-WAN appliances.