How much does SD-WAN cost in 2024?
The cost of SD-WAN in 2024 varies significantly depending on factors like deployment size, required features, and vendor selection. Typically, SD-WAN solutions can cost between $100 and $300 (£80 to £240) per site per month. For larger enterprises, prices can be higher, potentially up to $1,000 (£800) per site per month, especially if advanced security features and high bandwidth are necessary. You can obtain SD-WAN quotes using the Netify cost calculator.
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When trying to decide whether to switch from a traditional Wide Area Network (WAN) to a Software-Defined Wide Area Network (SD-WAN) solution, IT decision makers commonly want to know about the costs involved and if SD-WAN truly is more cost-effective than traditional WAN networks.
SD-WAN aims to improve network connections by optimising the network infrastructure, through a networking overlay. This resides on top of existing underlay communication links and controls data flows to improve performance whilst also intending to reduce expenditure. This article details a financial analysis of SD-WAN in comparison to traditional WAN networks, with specifics for the UK market and emphasises where costs are involved with SD-WAN.
Factors Influencing SD-WAN Costs
There are many factors that can influence the cost of SD-WAN. These can include the capability requirements, features and also if the service is managed or Do-It-Yourself (DIY).
Bandwidth Requirements
The first of these factors is network bandwidth requirements, which can cause the cost of SD-WAN to vary heavily. In the UK, basic broadband can be leveraged for low prices such as £50 per month. However, on the other side of the scale, high-speed dedicated ethernet can be implemented and this often exceeds £1000 on a monthly basis. When considering SD-WAN solutions, it is important to understand your business’ network bandwidth requirements, what the current underlay is, and which SD-WAN vendors can best optimise your communication links to provide a more affordable solution.
Features and Functionality
Being a network overlay, SD-WAN typically comes pre-packaged with features in order to provide optimisations over the network underlay, but not all SD-WAN solutions are equally abundant in these features. The more basic SD-WAN solutions provide functionality for standard traffic optimisation which can be far less expensive than solutions that offer advanced security built-in. With many features to offer, such as WAN optimisations, Application Aware Routing, Zero Touch Provisioning (ZTP), typically the more feature-rich an SD-WAN solution is, the higher the cost associated.
Deployment Model
One way that some SD-WAN vendors provide different features and functionalities is by leveraging the cloud to deploy the SD-WAN solution, enabling SaaS capabilities. Cloud deployed SD-WAN models typically charge a subscription fee, whereas on-premises SD-WAN often charges a higher upfront fee and lower recurring licensing fees. This difference is due to cloud solutions hosting the SD-WAN and all of the appliances to manage additional features at remote locations. Finally, hybrid solutions provide a mix of the two and can often be priced in the middle of each. Depending on the vendor and your business’ preferred deployment model, this can greatly impact the cost associated with utilising SD-WAN.
Scalability and Capacity
It should be noted that the size of the network, number of connected sites and total user count can have a direct consequence for the cost of SD-WAN solutions. There are cost-effective solutions that enables a variation of user count and scaling, but for typically fixed amounts of users/devices, a pay-as-you-go model can often help manage costs as these are usually lower. Unfortunately, these models are known to cost more to scale than variable solutions, so it is imperative to evaluate the necessity for network scaling when choosing the scalability and capacity of your solution.
Security
For added security, SD-WAN often offers features such as Next-Generation-Firewall (NGFW), Intrusion Prevention Systems (IPS) and Secure Web Gateway (SWG). These features all come at an added cost when compared to solutions without these capabilities. Further to this, more costs are involved when integrating Secure Access Service Edge (SASE) or SSE. By evaluating pre-existing security and determining if it is compatible with current SD-WAN vendor offerings, you may be able to reduce your SD-WAN cost by leveraging pre-existing appliances. If not, factoring in the cost to protect your business should be heavily considered.
Service and Support
As with all technology, it can be frustrating when things go wrong, especially when you don’t have a dedicated in-house team of experts to help fix the issue. One way that this issue has been mitigated is that vendors can offer managed services. This assists with installation, maintenance, troubleshooting and provides general support for your SD-WAN needs. However, due to the use of external administration/support, this impacts SD-WAN pricing, with managed services costing far more. Determining your business’ network administration competency level, especially for SD-WAN, is essential for evaluating if a managed service is required.
SD-WAN Pricing Models
Whilst the cost of SD-WAN can vary based on the features and capabilities provided, the basis for pricing models also varies. These pricing models can be based on anything from regular subscriptions, bandwidth usage, service or plain flat-rate fees. When the cost of SD-WAN is a high priority for your business, it may be worth considering the regularity of payments and where certain pricing models may cause a fluctuation of prices month-on-month.
Subscription-Based Pricing
One pricing model is subscription-based. This model typically charges regular fees to licensing the SD-WAN solution and commonly comes pre-packaged with support offerings as part of the subscription. This is recommended for businesses that would like additional support whilst also spreading costs over regular periods.
Bandwidth-Based Pricing
As SD-WAN offers an overlay to the underlying network architecture, another pricing model that is seen within the market is bandwidth-based pricing. With more bandwidth, the network can typically house more users or cater to more intensive network traffic. This model may therefore be preferable for low bandwidth using businesses as this may keep costs low.
Pay-As-You-Go Pricing
Pay-As-You-Go Pricing models offer businesses with a flexible pricing structure which is based on the SD-WAN usage. This model can be preferrable for businesses that don’t typically use their network intensely year-round, such as seasonal organisations. This means that costs can be reduced for the months where business is quieter.
Feature-Based Pricing
Some SD-WAN vendors offer features at an additional charge to the base solution. This means that businesses can pick and choose the features they feel they need based whilst considering the potential cost implications for these. This model is preferable for businesses that only intend to utilise a specific set of SD-WAN features.
Tiered Pricing
Tiered pricing models typically offer different levels of service based on set price points. Each tier offers a specific set of features and/or bandwidth. This would be most appropriate for organizations with branch locations that have varying SD-WAN requirements and connectivity options.
Per-Site Pricing
If your business spans across multiple sites, per-site pricing may be the most applicable model. In per-site pricing, costs are based on the number of connected sites.
Flat-Rate Pricing
Flat-rate pricing offers fixed fees, which can be seen a positive for simplifying budgets. However, these solutions typically cost more than variable pricing models when using lower resources. This model would therefore be best for businesses that wish to avoid any added costs.
Network Underlay and SD-WAN Overlay Costs
As SD-WAN is an overlay over the network infrastructure, there are often costs for both the network underlay and the SD-WAN overlay.
Network Underlay
The network underlay consists of the physical communication links, such as broadband, LTE and MPLS connections. Each of these links contribute to the overall network cost, with broadband being generally the most affordable and MPLS the most expensive. Ensuring adequate links is essential for SD-WAN to properly function and thus the cost of leveraging all required connections should be considered.
SD-WAN Overlay
The SD-WAN software overlay manages and optimises the traffic across the network underlay. The overlay cost predominantly comes from licensing, management tools and the functionality of the orchestration platform. As prices vary for the SD-WAN overlay, it is important to consider which SD-WAN solution best suits your business requirements in order to ensure the best value-for-money.
Cost Comparison: Traditional WAN vs. SD-WAN
SD-WAN typically provides cost savings over traditional WAN networks that utilise MPLS. Through leveraging low-cost broadband connections, SD-WAN can reduce network reliance on expensive MPLS circuits and, in some instances, has been known to lower network costs by up to 50%.
Key features of SD-WAN include a centralised management pane and automation of network processes. These reduce operating expenses for network administration and troubleshooting due to the reduced workload and competencies required for your businesses network administration team.
“With less complexity, comes less expense.”
Networks are simplified using Software WAN solutions.
Average SD-WAN Costs in the UK
For those wondering what the average cost for SD-WAN is within the UK, the typical price range for SD-WAN within small businesses is £50-£300 per month. Meanwhile, medium to large enterprises can often spend £300-£1000+ per month on SD-WAN solutions. These averages vary based on numerous factors, such as geographical locations, service provider, specific business requirements but give key insights into expected outgoings where SD-WAN is adopted.
Hidden Costs and Considerations
To finalise any evaluation of SD-WAN costs, it is important to consider there may be unaccounted for charges. Sometimes vendors can hide the charges for initial setup and installation fees, whilst there may be added charges for ongoing maintenance/upgrades and training/adaptation for network administrators may come at a further cost. It is important to consider all of these elements prior to selecting a SD-WAN vendor if cost is a high priority for your business.
Conclusion
SD-WAN can provide cost savings whilst also improving performance when compared to traditional WAN networks. These costs depend on various factors, such as bandwidth requirements, features, deployment models and scalability, whilst pricing models vary from subscription-based, pay-as-you-go and fixed rate pricing. As costs include both the physical network underlay and SD-WAN overlay, it is important to evaluate compatible components and ensure the availability of adequate communication links for SD-WAN to properly function. Though SD-WAN is often more affordable than MPLS, it is important to consider all potential costs, including ongoing or hidden charges.