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The Cloud shakes up the WAN

Make no doubt about it, this is a big threat to incumbent router vendors such as Cisco Systems and Juniper Networks, who move tons of branch-office networking gear for the WAN.

Bozeman, Montana:   Sun, 2/22/15 - 11:59pm    View comments

The Cloud is having a huge impact on everything:

Cloud Computing

And the next area of serious disruption is coming in the Wide Area Network (WAN), where businesses are tired of expensive, proprietary connections and the management of branch-office networking gear.

According to CDW Berbee technical architect, Craig Weinhold, one WAN usage trend shows Branch-to-Data Center traffic dropping as applications move to the cloud:

WAN Usage Trend

Imagine a world in which the business WAN is completely consumerized and you buy WAN connectivity like a cable service -- from the Web -- without any configuration of branch-office routers and other technical management. This is where we're headed as a new crop of startup and incumbent network vendors focus on delivering WAN services via the cloud with a software-focused model.

Make no doubt about it, this is a big threat to incumbent router vendors such as Cisco Systems and Juniper Networks, who move tons of branch-office networking gear for the WAN.

It's also a threat to incumbent service providers, who have been selling expensive T-1 and MPLS lines for a long time. With sophisticated new technology, it's now possible to combine available Internet broadband and cloud software to deliver a high-performance, secure business broadband connection.

MPLS VPN is approximately 30 — 100 times more expensive per Mbps than Internet bandwidth according to CDW's Craig Weinhold.

Leading startup players in the Cloud WAN space include Aryaka, CloudGenix, Pertino, Silver Peak, Talari, VeloCloud, and Viptela. Incumbents include Cisco and Riverbed. But even the incumbents have acknowledged the trend, and they are quickly moving to drive WAN connectivity through software and virtualized services, rather than hardware.

The market opportunity for Cloud WAN is $7.5 billion according to The Future of Cloud WAN, new premium research from the Rayno Report. Following 3 months of interviews with enterprise end users, venture capitalists, and technology vendors, it's clear that the market is moving network appliance-driven functions such as Applications Delivery Controllers (ADCs), Virtual Private Networks (VPNs) and WAN Optimization into the cloud.

Yes, the world needs fewer boxes.

These technology shifts mean big opportunities for companies deploying simpler WAN options through the cloud, which can include cloud-based WAN optimization, IP-VPN, and security services:
WAN to the Cloud

Some other findings in The Future of Cloud WAN report:

  • $360 million in venture capital has been invested in a variety of Cloud WAN startups.
  • There are at least 17 startup and incumbent technology companies pursuing the Cloud WAN market.
  • Cloud WAN technology is expected to virtualize existing enterprise WAN technology functions such as branch-office routers, Virtual Private Networks (VPNs), WAN Optimization, and Application Delivery Controller (ADC) technology and move this functionality into the cloud.
  • Details about the Return on Investment (ROI) offered by a Cloud WAN model. Includes potential savings in areas such as management, hardware costs, maintenance, and energy.
The report is available immediately from the Rayno Report for a single-user license of $650.

For multi-user enterprise please email:

R. Scott Raynovich
Rayno Media Inc.
(406) 599-7873

Related document:

The Future of Cloud WAN

Related story:

Shake-Up in the WAN

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