Amazon Web Services Announces Cloud WAN to Rival Microsoft and Google’s Managed Wide Area Network Solutions

On 2nd December 2021 at re:Invent, two days after their launch of commercial Private 5G (Amazon Web Services Announces its Venture into Private 5G (IN-6373)), Amazon Web Services (AWS) announced the preview release of ‘AWS Cloud WAN’. AWS Cloud Wide-Access Network (WAN) aims to unify enterprise cloud networking within a central dashboard that can manage/configure policies across an enterprise’s global WAN, improving network policy continuity and optimizing resource usage. Prior to Cloud WAN, the enterprise global WAN was disconnected, creating management issues. But by utilizing AWS Cloud WAN, it should enable enterprises to build a unified global WAN, manage enterprise-wide WAN policies, and monitor the health and performance of the global WAN, whilst streamlining the process of connecting remote end points to the global network backbone and AWS cloud applications.

AWS’s Cloud WAN preview release is evidently a response to Microsoft’s ‘Azure Virtual WAN Hub’ and GCP’s ‘Network Connectivity Center’. Like AWS, both of these managed WAN solutions draw WAN management into a single operational interface/platform, connect networking features (i.e., VPNs and third-party Software Defined (SD)-WAN) to improve enterprise network and cloud integration. But what impact does a managed WAN service have on enterprise networking?

Scalability: Essential to a managed WAN service is the unification of enterprise networking regardless of geography. Each hyperscaler has a fairly complete global cloud backbone that offers regional agnosticism and, through their managed WAN services, automatic endpoint (on-premises, data center, cloud application) configuration. The hyperscaler global backbone enables endpoints to be immediately integrated into an enterprise’s WAN independent of geographic distance, reducing network complexity and lowering operational network costs.

Agility: Managed WAN services provide central, cross-enterprise visibility that enables an easy-on ramp to cloud applications, which leads to an improved user experience. This network backbone further improves agility by allowing enterprise to augment their existing WAN with cloud network backbone for ‘middle mile’ data transmission, which can offset the growth in data caused by remote work. In addition, by allowing the extension of private cloud applications across multiple regions, managed WAN service enables remote network end points to utilize the same resources, allowing employees to ‘work-from-anywhere’ whilst enterprise networks benefit from economies of scale by sharing public cloud infrastructure.

Security: The extension of network segmentation to cloud applications will provide enterprises with Multiprotocol Label Switching (MPLS)-like security and control across the entire network. Managed WAN services allow end-users to define and subdivide core networks into segments and then synchronize each segment to similar Virtual Private Networks (VPNs) providing isolated routing within private clouds. This creates natural isolation boundaries between different cloud streams and allows the extension of security to cloud applications.

Managed WAN services will have a significant impact on enterprise networking, but on the surface each hyper scaler seems to offer a similar service. So, ABI Research must ask the question: how will AWS Cloud WAN, as the ‘newcomer’, fare against incumbent services offered by Microsoft and GCP?

ABI Research views AWS’s existing global cloud infrastructure and network as a key factor that will aid its entry into the managed WAN market. Once Cloud WAN is active in each AWS region, AWS will be able to integrate enterprise networking across its backbone within 245 countries and territories. This global cloud infrastructure gives its service a significant advantage against smaller vendors as it can offer enterprises immediate connectivity independent of geography. Even compared to Microsoft and GCP, AWS offers a more complete global cloud presence, that can offer a more scalable infrastructure that can effectively handle growing demand for cloud services.

AWS’s existing client relations, public cloud maturity places, and nearly universal reach provides this solution with clear selling point and easily attainable market share at the top end of the managed WAN market. As AWS Cloud WAN will integrate easily with AWS products/services and ‘best-in-class’ SD-WAN vendors (Cisco, Aruba, VMware, Fortinet), as the addressable market for this service is already very large with over one million existing clients who utilize AWS Cloud Services.

However, AWS Cloud WAN will face challenges as a ‘newcomer’. Firstly, although each hyperscaler utilizes a consumption-based pricing strategy, AWS’s ‘per hour’ model makes enterprise network cost management more challenging. This will mean that Microsoft (‘per minute’) and Google (‘per minute’) will offer slightly more attractive services for enterprises looking to cut networking costs. Secondly, AWS’s maturity may not be attractive to cloud-based businesses as it limits enterprise cloud control. As an alternative, the versatility and flexibility offered by Microsoft and Google’s cloud services may make their managed WAN service more desirable. Lastly, as AWS is ‘late to the game’, some of its existing clients may have shifted to Azure or GCP to benefit from their managed WAN services. Reclaiming or replacing these clients may be difficult given that AWS Cloud WAN does not offer a substantially differentiated service to either Microsoft or Azure.

Although AWS Cloud WAN is not revolutionary, offering a similar service to Microsoft and Google, it is still likely to hold its own and be competitive. This means that in response to this ‘newcomer’, ABI Research recommends that certain players should reassess their managed WAN strategy:

• GCP and Microsoft’s managed WAN strategy should remain unchanged. AWS Cloud WAN will not disrupt this end of the market, as they are likely to target existing customers that currently use existing AWS cloud services/applications.
• ABI Research recommends that global enterprises that currently utilize AWS services should consider incorporating AWS Cloud WAN. As network end points become more decentralized, unifying global WANs is essential to optimizing business operations.
• Small incumbent Cloud WAN vendors like Zenlayer and Versa networks must reassess their service offering as AWS Cloud WAN is likely to absorb significant market share. AWS’s global cloud infrastructure footprint will give Cloud WAN an edge against smaller incumbents.