May 02, 2022 | 4 min read
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SD-WAN transforms Retail, Business Services and Manufacturing


Brian Washburn, Research Director, Service Provider Enterprise & Wholesale

Across all industries, more than half of large enterprises – and almost two-thirds of large multinationals – now have SD-WAN somewhere in their networks. Pilots and small deployments are still common. 

Over the years, Omdia has watched small deployments become bigger, and larger SD-WAN estates grow network-wide. Industries look at SD-WAN differently. Each is trying to fill its own requirements, prioritizing performance and security, flexibility and cost. Here we see how three industries – retail, business services, and manufacturing – adapt SD-WAN to their needs.  

When it comes to SD-WAN, there are some common trends for all industries. First, they find SD-WAN as a toolkit incredibly versatile. Second, they make SD-WAN part of a bigger network and IT strategy with their network underlay, cloud, and applications. Third, when enterprises plan right, they see big benefits and are highly satisfied with their SD-WAN choice.  

The SD-WAN experience: Retail adopters

Retailers mix physical stores and online e-commerce. Customers experience retail as personalized interactive shopping, complete self-service, and everything in between. But the whole sector has constant pressure to keep sales flowing and keep expenses low.

Tough margins and stiff competition were normal before COVID-19 up-ended the retail world. The past two years drove shopping online. Retailers had to become omnichannel, linking everything: stores to warehouses, purchases to returns. They needed to be consistent – in-person, voice, computer, and mobile device. They created a blended brand experience for customer relationships.

SD-WAN helped retailers move from more expensive private WAN to less expensive broadband and dedicated internet. This was ideal for retailers with tight budgets and many locations. Done right, SD-WAN and Internet have acceptable reliability and performance for retail stores.

Retail was an early sector to use SD-WAN. Today, more than two-thirds of large retailers have SD-WAN, often trading out their older gear for a new SD-WAN vendor. Cost reduction and support for new applications are important to retailers, but the top reasons retailers adopt SD-WAN are better performance, improved flexibility, visibility and management over the network. Centralized control is especially important: Retail stores often have many locations, and no dedicated IT experts on-site for network problems.

Almost all retail SD-WAN adopters are strongly satisfied. The few retailers reporting SD-WAN trouble handled their own SD-WAN network design and installation, manage their own hardware and software, and configure their own policies and SD-WAN security. Managing in-house can mean there is no expert assistance when something unexpected happens.


The SD-WAN experience: Business Services adopters

Business services are a wide class of companies that work with other businesses, without tangible products changing hands. Companies might supply expertise in legal, regulation, and compliance; support IT hardware and software; bring specialized talent to another industry. Companies in business services depend on their talent. They rely on technology for their own, and their clients’ business.

Cloud is critical to business services companies. They often deal in information, grow and shrink for projects, and manage distributed workforces. Solid performance so workers, partners, and clients all work together smoothly is critical. Keeping all that information secure is critical. Business services companies are a big buyer of private WAN connections to cloud. Still, the sector is very sensitive to cloud-related performance problems. Omdia surveys show 63% of business services companies had major network/cloud performance problems in the past 12 months.

Just over 60% of large enterprises in business services have adopted SD-WAN. The technology delivers the security and performance these companies want. When business services companies adopt SD-WAN, they are more likely than other industries to push SD-WAN to most or all their sites. Business services companies are also very happy with their SD-WAN outcomes. SD-WAN adopters in business services rate their experience a 7.9 out of 10 on average. This is the highest customer satisfaction that Omdia has recorded in recent enterprise network surveys for any service and any industry.


The SD-WAN experience: Manufacturing adopters

Manufacturers work in materials that they take in, process, and move out. They work technology on two levels. One is operational technology. Machines on the factory floor have become more intelligent and more connected over time. Some machines are connected by real-time controllers and have tight performance tolerances.

The other major technology area is IT services, which must manage the constant supply chain flow of material orders and product shipments. Manufacturers need continuity in their operations. If their systems all work, they are making money. If any piece in the chain breaks down and the factory stops producing, a small break in one link is a big cost to the business.

Omdia’s enterprise surveys find nearly 60% of large manufacturers have adopted SD-WAN. Manufacturers use SD-WAN a little differently from other industries. These companies are likely to look to their network underlay first. Manufacturers need to be certain their networks – like the rest of their operations – are reliable. To help with reliability, manufacturers more often tap managed services partners to keep on-site network access gear up and running. This holds for SD-WAN, routers, firewalls, and other gear.

Across SD-WAN and other managed network services, the manufacturing sector wants performance, reliability, and security. These benefits compete for priority. Less important are on-the-fly, dynamic networks. Most manufacturers do not see a need to make network changes on the fly. The value of their networks comes from continuous, reliable operations at predictable costs. SD-WAN is useful to keep tabs on applications performance and keep the network up and running; or better yet, to tap a responsible partner that takes care of these network tasks for them.


Brian Washburn, Research Director, Service Provider Enterprise & Wholesale

Omdia is a leading research and advisory group focused on the technology industry. With clients operating in over 120 countries, Omdia provides market-critical data, analysis, advice and custom consulting.

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