AT&T CEO Randall Stephenson mentioned on the company’s earnings call yesterday that it’s in the process of developing its own software-defined wide area networking (SD-WAN) capabilities. Although he didn’t mention VeloCloud on the call, the vendor did confirm to SDxCentral that AT&T continues to work with it on SD-WAN.
According to a Seeking Alpha transcript of yesterday’s call, Stephenson said, “On the SD-WAN, yeah, it’s real. It tends to be real down-market…and you should assume that we’re developing the capability ourselves, because it’s a viable offer down-market. We’re seeing some effect from it. It’s not material yet, but we think it’s a legitimate capability. We need to be there; we need to have it. And so up-market, the traditional VPN capability is always, we think, is going to be the enduring capability. But down-market, we’re going to have to be prepared to compete with this kind of offering.”
The “up-market” refers to large enterprises, for which AT&T offers traditional VPN, via MPLS connections. The “down-market” refers to small-to-midsized businesses (SMBs), which is where AT&T is really going to have to expand its SD-WAN capabilities.
To help fill in this gap, AT&T will be leveraging an existing partnership with VeloCloud that it announced in October 2016, according to a VeloCloud spokesperson in an email to SDxCentral. In October, the service provider announced it had picked VeloCloud to deliver SD-WAN over multiple types of network connections. AT&T said it would deliver two types of SD-WAN: a network-based system and an on-premises-based system.
A network-based system could build off a customer’s existing MPLS connections. With the on-premises-based system, customers don’t necessarily need an AT&T MPLS connection. They can use SD-WAN to manage their various wired and wireless Internet connections from third parties.
“For SD-WAN solutions, AT&T is the first provider in the industry to announce both an over-the-top solution as well as a network-based SD-WAN solution, which couples smart SD-WAN CPE with a smart MPLS network,” wrote the VeloCloud spokesperson. “A typical SD-WAN solution is deployed in an over-the-top manner, i.e., SD-WAN CPE is deployed at every customer site, and tunnels are established over the network transport links among sites.”