Business communication service providers can be classified based on network ownership:
- Operators that own the network and also offer hosted VoIP services
- OTTs, hosted business communications service providers that don’t own the network
Clearly those that own the network have an advantage as they offer their business customers the service and can make sure it is delivered in high quality. Problems start when the customer has worldwide dispersed branch offices causing the operator to go off their network. In such cases, they either go “over the top” or partner with local operators which is a costly option.
In many cases we see that business communications service providers require their customers to use MPLS for consuming their service. This is an expensive option (300-600 USD/1 Mbps depending on country and provider) that solves only part of the enterprise connectivity requirements.
The connectivity requirements of enterprises have drastically changed since the days MPLS was designed around 20 years ago. Putting cost aside, MPLS is great when:
- Enterprises host their servers and applications on premise
- Network agility is not a high priority
These 2 are requirements of the past. Today enterprises consume many of their applications (Office 365, UC, CRM, Storage, Compute…) from the cloud. The requirement is for good connectivity to cloud services and not just between branches. Moreover, it is required to have the flexibility to add/switch cloud application providers and support remote/home users instantly and without being required to provision the network.
MPLS is a great business
MPLS is a cash cow in 2 ways.
The trivial one, it costs a lot of money, operators make a lot of money from this service as it is not as competitive as other services OTTs have disrupted.
The second, it gives operators an unfair advantage which in turn, allows for charging a premium. It keeps the operators’ customers, the enterprises, within the operator’s walled garden and allows the operator to offer services such as hosted UC from the operator’s cloud with an unfair advantage of price/quality over OTT UC providers. This is because the operator controls both connectivity and the hosted UC service while the OTT needs to use the operator’s MPLS or opt for really going over the top (not so common among the large US OTT UC providers).
SD-WAN + WebRTC moves the cheese
There is a reason why we see large operators partnering with SD-WAN vendors to offer SD-WAN services (Verizon with Viptela and AT&T with VeloCloud). This is not done because they are happy to embrace it but rather because they understand that ignoring it will hurt their MPLS business along with other business services such as hosted UC. Since SD-WAN is the future of WAN, operators prefer to be the ones offering it to their enterprise customers else, they will become broadband providers with SD-WAN as overlay on top, provided by SD-WAN OTTs.
SD-WAN together with WebRTC allows even small OTT UC providers to offer their service at high quality. Putting WebRTC and SD-WAN in the blender results in the following advantages for OTTs and enterprises that make this possible:
- Lower cost of high quality WAN and connections to main cloud and SaaS providers
- Error resilient, bandwidth efficient and adaptive codecs that overcome broadband network issues as well as local WiFi/LAN issues
- Allows web developers to add real-time communications services as a feature to their application
- Allows for network and SaaS application provider selection agility
A good example of a hosted UC OTT that adopted SD-WAN is Vonage. Vonage partnered with VeloCloud and is now offering it to its business customers managed SD-WAN as a solution for both businesses’ general WAN needs and as a vehicle for its UC services.
Why this is important
SD-WAN strengthens the position of OTT hosted UC providers vs. the incumbent operators as it makes the operators’ advantage of owning the network less valuable. SD-WAN reduced the operational cost associated with providing hosted UC in high quality as it removes the need for MPLS.
Combined with WebRTC, adding real-time communications as a feature to existing SaaS applications has never been easier.