5 Ways SD-WAN Delivers Cost Savings To Small Businesses

August 28th, 2020
5 Ways SD-WAN Delivers Cost Savings To Small Businesses

In a previous blog, we explored the many benefits that businesses can enjoy when they implement a software-defined wide area network (SD-WAN). But one of the most compelling reasons to switch to this technology is the potential cost savings. This blog will break down the different ways you can save money by rolling out SD-WAN.

Further reading: Is SD-WAN right for your SMB? [Checklist: Things to consider]

1. You don’t have to invest in hardware for every branch office

Traditional WANs require you to have separate routers, firewalls, and WAN optimization devices at each branch office. In contrast, SD-WAN relies on software rather than hardware, so this greatly decreases your capital expenditure. This also means that you won’t be stuck with hardware that you’ll no longer use in case your bandwidth requirements drop or you shut down a business site.

By relying on software, SD-WAN also centralizes network management. This enables you to easily implement and monitor networking, security, and optimization solutions, protocols, and policies in real-time across multiple sites.

What's great is this also translates to reduced operating expenses. In fact, Gartner reports that the five-year hardware, software, and support costs of SD-WAN are up to 40% less than those of traditional routers.

2. You can conduct remote deployment and network configuration

When it comes to deploying and configuring legacy Multiprotocol Label Switching (MPLS) technology versus SD-WAN, the former is more expensive. This is because of its complexity, requiring you to have IT staff with specialized networking skills on-site at each branch location.

MPLS deployment is also more time-consuming. You need to allocate time for circuit delivery, equipment provisioning, and manual configuration of each piece of hardware at every branch office. This process often takes weeks or months, whereas deploying SD-WAN only takes days.

And should there be a need to add a new application, deploy upgrades, troubleshoot, or apply other network changes, a technician would need to visit every branch office to do so. Just imagine how much money, time, and effort that would require if your business has multiple sites!

On the other hand, since SD-WAN is software-based, it can be delivered via the cloud. This allows you to add or shut down a branch site online in just minutes, without sending an IT specialist on-site. This means you can quickly scale up or down your network requirements and pay for only what you’re using.

SD-WAN also lets you define and manage policies from a centralized platform and simultaneously roll them out to all connected devices in different branch offices. This results in money and time savings on provisioning, configuration, updates, and management.

It also reduces the need for several, highly skilled network technicians, thus driving down expenses related to hiring, training, deploying, and paying them. Finally, you don’t have to worry about costly errors that may result from manual device configuration.

3. You don’t need more expensive connections to support bandwidth-intensive and latency-sensitive applications

If your small business uses bandwidth-intensive apps (e.g., online backup and media streaming), then you’d end up spending more money using legacy MPLS connections as opposed to SD-WAN. This is because every MPLS link offers a fixed level of bandwidth, forcing you to lease links for your foreseen maximum traffic load for each branch office. This means that there may be a lot of time that expensive bandwidth goes unused.

In contrast, SD-WAN efficiently uses all of your existing bandwidth on multiple links across the entire WAN, rather than just the link between path A and path B. What’s more, with SD-WAN, you have visibility into the traffic running across the whole network, which enables you to assign policies to control and secure all WAN traffic.

You can then separate traffic coming from bandwidth-intensive apps from other types of traffic so that the former doesn’t congest the entire network and ruin the quality of the connection for all apps.

When it comes to latency-sensitive applications (e.g., voice and video chat), you would need a dedicated MPLS circuit that only carries traffic from those apps to ensure constant connection. This can be very expensive and prone to underutilization.

On the other hand, SD-WAN can seamlessly use any WAN transport service (e.g., broadband, 4G LTE, MPLS) and intelligently route traffic to any available one. Should any transport service fail, SD-WAN can easily move traffic over to another one.

And because SD-WAN offers real-time visibility and analytics and can recognize latency-sensitive applications, it can prioritize their traffic. All of these capabilities enable SD-WAN to improve application availability and performance.

4. You can replace MPLS circuits with broadband lines

Since SD-WAN can use multiple types of WAN transport services, you can completely do away with MPLS circuits and use cheaper alternatives such as broadband lines. The price of a private MPLS circuit is around $585 per Mbps, while it’s only $2–10 per Mbps for a standard broadband line.

Aside from the substantial cost savings, you can achieve for each link, you’ll also save money using broadband circuits since these are more widely available and have faster provisioning times than MPLS links.

5. You gain a lot from improved network operations

Companies today rely heavily on applications to operate. When apps run slowly, worker productivity drops, often resulting in lost revenue. Some business functions may even come to a grinding halt when apps are down.

This is especially true when you’re using apps that require real-time internet connection, like cloud-based programs. Even mere seconds of network outage can lead to disastrous outcomes, such as dropped video or voice calls.

In fact, a 2019 IBM study says that unplanned downtime costs 35% more per minute than planned downtime. The respondents also estimate that planned downtime cost their organization an average of $5.6 million in 2018.

To ensure application availability at all times, you need a quick failover process, whereby your standby system kicks in as soon as your primary one goes down. However, in legacy WAN architectures, when your primary connection goes down, you need to call your IT provider, wait for a response, and then get manually switched over to the backup connection.

But with SD-WAN’s real-time traffic monitoring, traffic is automatically diverted to any available connection. With less downtime, worker productivity goes up, which can significantly improve sales and customer satisfaction as well.

Finally, since SD-WAN can ensure consistent performance of both on-premises and cloud-based apps, your business can shift to more cost-effective cloud resources without worrying about latency issues.

Want to benefit from the cost savings that SD-WAN can offer? Let the IT experts at Ubisec help you with our SD-WAN-as-a-Service offering. We service businesses of all sizes in Los Angeles, Orange County, and Washington, DC.


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