Masergy CEO: SD-WAN 'Only In Second Inning’ As Opportunities Peak During COVID-19

‘Many IT leaders find themselves working with legacy networks that have shortcomings, which are making today’s remote work, business continuity and security, the top concern. That’s where stronger, more secure, more flexible SD-WAN shines,’ Masergy CEO James Parker says.

Software-Defining The New Normal

Masergy, a channel-led company that does about 80 percent of its business through partners, has been heads down focused on software-defined networking (SDN) and SD-WAN for years, and the timing couldn’t be better for both, according to Masergy CEO James Parker.

The Plano, Texas-based hybrid networking provider believes that digital transformation is reinforcing the needs for technologies like SD-WAN. And needless to say, as the COVID-19 coronavirus pandemic hit, momentum around SD-WAN – which was already very alive – has accelerated.

Parker said that the industry is only at the starting position with SD-WAN, so the runway for opportunities for partners is quite long. He told CRN about how the channel is rushing to the aid of businesses who have had to move their workforces out of the office and into their homes as a result of the outbreak, how Masergy handled the surge in remote VPN connections, and where partners should place their IT bets moving forward.

Here are excerpts from the conversation.

How important is SD-WAN right now when most companies around the world are grappling with an entirely remote staff?

Many IT leaders find themselves working with legacy networks that have shortcomings, which are making today’s remote work, business continuity and security, the top concern. That’s where stronger, more secure, more flexible SD-WAN shines.

One example of why flexible, secure SD-WAN and software-defined networks is especially important right now is the increase in bandwidth that usually accompanies additional VPN connections. From March 10-18, Masergy’s VPN connections skyrocketed to increase by 676 percent in a little over one week. To support this surge in usage, Masergy can instantly boost bandwidth at all our POP locations as needed, and we’ve already made rapid adjustments for our customers to ensure consistent cloud application performance for our clients. Our cloud delivery models are also making VPNs faster. Fortinet blade servers hosted in each of our global POPs have built-in, highly scalable cloud firewalls, which make it easy to open SSL tunnels and activate new user licenses.

Agility and customization are the most important capabilities of an SD-WAN solution for enterprises with an entirely remote staff, considering the changing needs of each location, user group and application. A network that is able to deliver on both of these capabilities allows enterprises to successfully dial up or down tunnels, links, loops and bandwidth at each POP - and all at a far faster and easier rate than if they were working on legacy technology with patchworked global networks governed by manual processes.

How are partners stepping up to the plate during the pandemic to help customers with SD-WAN?

Partners particularly understand how helpful a software-defined network and cloud platform can be in making companies hyper-flexible when rapid changes are needed on the fly. But increasingly, they’re being asked about more than just SD-WAN devices with elastic bandwidth for VPNs and cloud application delivery. With COVID-19, enterprises are taking extreme caution with endpoint security--after all the WAN is now becoming any connected remote employee on any device. Security threat monitoring and response services, cloud security technologies, user-based identity analytics, and even direct connections to cloud-based unified communications applications are priorities that are rapidly rising to the top amid virtual workforce strategies.

Partners are learning that all of these elements must be inherent in their offerings, and they appreciate that Masergy helps them widen their opportunities across all of these needs with one partnership and one cloud platform. Partners are stepping up to the plate with more than point SD-WAN solutions, but rather an array of services and options in how to create an end-to-end, fully managed solution that takes more burden off the client’s IT team.

How does Masergy’s SD-WAN services stand out in the crowded market?

We think we're leading the network shift, which is about SDN, but also, edge and cloud connectivity, and how we're wrapping that up with security and analytics. With our partners and through our offering and our differentiation that we have -- how we've built out with our software-defined core, and now that software-defined edge, then our analytics around that in security – it’s really making a differentiated offering in the business.

We've gone to market with our Shadow IT Discovery solution -- it’s tied to our SD-WAN offering – and it enables our clients to do discovery at an application-level of what's happening with their network and be able to take action. Tied to our SD-WAN offering is our AIops, and this is how we're looking at the data flows that are coming through from an SD-WAN box off of the network. We use that information and notify our clients and how they can make improvements, and as we go down this path, take autonomous action.

We're known in the market to be a customer service-oriented company, and we're building out a lot of automation from our fulfillment engines that enable us to really amplify scale within our business and faster delivery time. From the point of sale all the way through to delivery, automation capabilities in our workflow management is really driving improved efficiency to serve our partners and customers. This is going to continue to deliver an amazing experience. And what we've noticed is as the complexity of an SD-WAN deployment goes up, the higher levels of automation that we're implementing is giving us a better delivery experience for customers.

As SD-WAN complexity increases, are you seeing partners struggle with the solution, or struggle to enter this market?

I definitely don't think [SD-WAN] is anywhere near above the partners’ pay grade. There's absolutely learning and education readiness that's required, but there's also a natural extension of the conversations that they've been having being a trusted advisor on the network. Really understanding the landscape and the market of the different providers, [as well as] the different offers and the differentiation between those competitors is important. There’s a learning curve, but it's absolutely attainable for channel partners.

We see that in our numbers coming through the door, well over 50 percent of our funnel is SD-WAN. We're seeing over 100 percent growth within our revenue as it relates to SD-WAN and our split of our business is 85 percent is still coming through our channel. We're seeing clearly our partners making the making that shift. And we're making that shift with them and enabling them to be that trusted advisor for their customers.

Since the October brand refresh, tell us about Masergy’s channel focus?

We certainly have a renewed focus on the channel. At one point in our go-to-market structure, we had a direct and indirect sales team, but now, we compressed that down into one go-to-market sales teams across the organization. You could say we have more resources that are working with the channel than we had in any prior year and there's no differentiation from our sales team – whether they work a deal independent or work with partner to close, it’s the same.

A lot of the readiness and training materials we have has amplified engagements with the master [agents] and also with our sub-agents. Those materials are really driving the next level of education that's required to work through an SD-WAN conversation. We’re also getting engaged with systems integrators as they're doing digital transformation projects at that managed network layer and multi-cloud implementation.

We’re standing up an Alliance program, particularly looking at working with [vendors like] Fortinet and Cisco, which is also to help and amplify the impact that we can have with our agents. We ‘re doing deals where there is a VAR and an agent involved, and obviously the customer, and it’s working. We’ve had deals where we’ve gone in and executed both on contact center and with SD-WAN.

Alongside SD-WAN, where are the big areas of opportunities for partners right now?

The big areas are really at a broad category level. Digital transformation is driving towards SD-WAN because bandwidth consumption is just accelerating, and enterprises are really trying to find a better way to approach that. That SD-WAN momentum is very accelerating and it’s going to continue be an opportunity for many years to come. We’re only at the starting block -- we're in the second inning and it’s a nine-inning game, so there’s still a ton of runway as it relates to SD-WAN.

When you look at outside of SD-WAN, there’s accelerated migration to the cloud for unified communications and the contact center. Within the enterprise, we’re seeing that they really want to have that conversation around; ‘What’s the network quality and is that tied to the voice quality?’ We're having a lot of conversations of how does SD-WAN work with a unified communications offering because [enterprises] clearly want to have that quality of service.

That’s similar to the contact center that is also migrating to cloud. We usually see the combination of UC and contact center happening together, and again, the quality of the network, and how that network is going to be able to support enterprise.

All of this is also wrapped around a security conversation. Very rarely, if ever, do you have an IT discussion without security. The opportunity for our partners is really to bring those two conversations together. We're seeing clients looking at their best of breed pieces that they’ve put together and ask ‘Is there a better way we could do this? Can we get this more tightly coupled with our network and have a managed service provider bring those two worlds together?’ This is an area that is really exploding.