Banks Branch Out With SD-WAN to Connect Remote Offices

By: Pam Baker| - Leave a comment

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Until recently, connecting new or relocated bank branches to the wide area network (WAN) was a time-consuming and costly exercise. However, CIOs are increasingly moving to software-defined WAN — or SD-WAN — to speed up branch installation, control resources and cut network costs.

“It’s good for smaller offices that don’t need [the full resources] of multiprotocol label switching and don’t have 120 days to get things installed,” John Shaffer, CIO of financial services firm Greenhill & Co., explained to CIO. “The real beauty of SD-WAN is you just need an Internet connection and you’re up and running.”

Advantages of SD-WAN

SD-WAN is likely a relatively familiar concept for CIOs who use the well-known software-defined networking (SDN). The primary difference between the two is that SDN is used in internal data centers and SD-WAN is for managing WAN, as its name implies. SDN is an architecture, while SD-WAN is a technology that can be bought, Gartner analyst Andrew Lerner explained in a Network World post.

SD-WAN can be installed in a matter of hours, as opposed to the months it typically takes to get a traditional WAN in place. Plus, it cuts networking costs by as much as half. Lerner estimates that SD-WAN can be up to two and a half times less expensive than a traditional WAN architecture. These savings stem from the ability to use commodity routers and the decreased need for staff and router maintenance.

To put the savings into context, Lerner said a 250-branch traditional WAN architecture would cost an estimated $1.28 million over three years, while a deployment of SD-WAN would be about $452,500.

Further, SD-WAN can manage multiple types of connections, from multiprotocol label switching to broadband and LTE, all from a single interface.

SD-WAN Market Growth

As bank CIOs become more comfortable with the software-defined concept in networking, they may be more likely to apply the concept elsewhere in the network. However, that’s not the only reason SD-WAN is catching on.

The International Data Corporation explains that cloud applications and the end users using mobile devices to connect to them are also driving interest and adoption of SD-WAN. WAN performance becomes increasingly important to latency-sensitive and mission-critical workloads as cloud use grows, and hybrid clouds need flawless WAN performance to function optimally. For these reasons, the analyst firm predicts the SD-WAN technology and services market will reach $6 billion by 2020.

It’s safe to say that more enterprises, especially banks and other industries with remote locations, will adopt SD-WAN over the next few years. Organizations on the cutting edge of technology are moving to SD-WAN now, while other enterprises are waiting until the custom application-specific integrated circuits that control their WANs and local area networks come to an end, according to Network World. Which adoption wave will your bank be part of?

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About The Author

Pam Baker

Freelance Writer

Pam Baker is an award-winning freelance journalist based in Georgia. Her published credits number in the thousands, including books, e-books, e-briefs, white papers, industry analysis reports and articles in leading publications, including Institutional Investor, CIO, Fierce Markets and InformationWeek, among many others. Her latest book, "Data Divination: Big Data Strategies," has been met with rave reviews, was featured in a prestigious National Press Club event, is recommended by the U.S. Chamber of Commerce for business executives and is currently being used as a textbook in both business and tech schools in universities around the world. Baker is a "big-picturist," meaning she enjoys writing on topics that overlap and interact, such as technology and business. Her fans regualrly follow her work in science, technology, business and finance.

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