As more and more providers add SD-WAN, what happens to Cisco (and ADTRAN and Juniper)?
Think about this: SD-WAN providers use an appliance as the CPE or end-point. This appliance can function as a switch, router and more. It can be a firewall, a wireless access point and more.
Most of the big name LECs (ILEC and CLEC) have added SD-WAN technology to their portfolio. Even lesser known former CLECs like TelePacific, NITEL, Transbeam and AireSpring are offering SD-WAN technology. That means less Cisco boxes being deployed.
Not only is this a problem for the hardware vendors like Cisco, ADTRAN, Juniper, Brocade and Extreme Networks (mentioned because of recent news), but this is a problem for VARs and MSPs.
Long ago, I explained that VARs selling carrier services was like CLECs selling AT&T services - you are fighting against your biggest vendor. Now those same vendors are going to take away the Box Business that floats their business. VARs still make money selling boxes (so do Avaya partners!). The margins have shrunk. The sales have declined a little year over year, but not enough to make many change their lines of business or their model.
EarthLink announced 4000 locations on its SD-WAN as it merged with Windstream. If EarthLink can sell multi-location retail and restaurant chains, the SMB market is in play. The bread-and-butter of the VAR.
I am not throwing around FUD. I'm saying that every industry comes under attack by new technology. The new techis SD-WAN; the legacy business is Cisco and VAR - as this segment moves to a bigger managed services provider and hardware-as-a-service.