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Top 5 Traps That Can Ruin Any SD-WAN ROI Analysis

Kowshik Bhat
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The dynamic application workloads of today’s organizations are aggressively moving from on-premise data centers to “cloud data centers.” This migration demands highly agile underlying infrastructure and SD-WAN is becoming crucial to support these web-scale hybrid applications. Network organizations fall into key traps when performing SD-WAN ROI analysis that may be detrimental to choosing the right solution. Beware of these five traps that ruin SD-WAN ROI analysis:

1. Desiring to justify with MPLS cost reduction

The global average cost of 1 Mbps of MPLS can range from 20-30X the cost of 1Mbps of Internet broadband. The high cost differential can lead IT organizations to justify SD-WAN projects with the cost savings. To support IaaS and SaaS migration, organizations need higher capacity. Organizations can be disappointed by the offsetting cost of increased Internet broadband capacity against the cost savings of the MPLS circuits. A better approach is to justify the increased capacity to enable the cloud migration while off-setting the cost of circuits.

SD-WAN ROI of WAN Circuits

Cost reduction of MPLS vs cost management with increased Internet capacity

2. Failing to quantify uptime benefits

A key benefit of SD-WAN is the level of automation and managing policy-based access with a network-centric approach as opposed to a device-centric view. When managing hundreds of locations and controlling the optimal application traffic flow, the automation can eliminate significant amount of downtime caused by manual operational workflows. Various industry reports estimate the cost of downtime to a company can range from $300,000 to about $4,000,000 an hour. Do not overlook the benefits of uptime improvements in your SD-WAN ROI analysis.

3. Ignoring benefits of high-impact IT initiatives

The operational efficiency gains of software-defined WANs over traditional router-based networks free up high-value engineers from mundane operational tasks to drive high-impact corporate initiatives. The quantifiable benefits will at least be equal to the run rate of these senior IT staff and can have a multiplying effect on the overall benefits to the company.

SD-WAN ROI must account value of critical projects

Benefits of freeing up staff to work on high-value projects should not be overlooked

4. Expecting 1-to-1 cost replacement

IT organizations can often fall in the trap of taking a simplistic approach of comparing cost of hardware. Replacing a traditional router with an SD-WAN appliance can give a false sense of 1-to-1 hardware cost comparison. SD-WAN brings with it a slew of benefits – automation, operational gains, hybrid infrastructure enablement, application-level intelligence, integrated application acceleration, flexibility of integrated or service-chained security, and branch IT sprawl reduction to name a few. The hardware cost comparison fails to comprehend the value of these benefits in an ROI analysis.

5. Overlooking user productivity gains

One of the core advantages of SD-WAN is the ability to steer application traffic intelligently across multiple underlying technologies. With workload spread across on-premise data centers, private cloud, public cloud and SaaS applications, this policy-based application access is paramount to the digital journey. SD-WAN is a key enabling infrastructure to successfully adopt applications such as Office365, Salesforce, Workday, and others. As a result, the pace of user adoption of cloud and associated productivity gains should not be overlooked in the ROI analysis.

Download the ROI guide by Enterprise Management Associates on Riverbed SteelConnect EX.

Are there other traps that you have come across in an SD-WAN ROI analysis? Share your thoughts in the comments below.

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