What is SD-Wan? 3 Examples You Need to Know

By Tibor Moes / Updated: July 2023

What is SD-Wan? 3 Examples You Need to Know

What is SD-Wan?

For years, traditional wide area networks (WANs) were enough for most businesses. The traditional WAN model involved backhaul traffic from an office to your company’s data center. While this added latency and wasted bandwidth, it was a solid enough model for many years.

Then, cloud services came along. Suddenly, a traditional setup wasn’t enough for the WAN traffic most companies generated. The introduction of the Software as a Service (SaaS) model meant that an evolution was needed.

Enter SD-WANs. This article explains what SD-WAN is and gives some examples of how it’s used in modern business settings to achieve cost savings and improve network management.


  • SD-WAN (Software-Defined Wide Area Network) is a networking technology that allows businesses to leverage any combination of transport services, including broadband internet, MPLS, and LTE, to securely connect users with applications, improving network agility and cost-effectiveness.

  • This technology enables dynamic routing of traffic across the best available path, based on real-time conditions, ensuring high performance and reliability while minimizing latency and packet loss. The centralized control function of SD-WAN also simplifies the management and operation of the network.

  • The implementation of SD-WAN improves business scalability and agility, reduces costs by eliminating expensive traditional WAN circuits, and enhances security with end-to-end encryption across the entire network.

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What Is SD-WAN? – In-depth

SD-WAN stands for software-defined wide area network. As the name implies, SD-WAN solutions offer a software-defined approach to managing a company’s wide area network. This approach lowers costs by creating transporting independence across several connection types, including 4G, 5G, and broadband internet connections. It also improves application performance, enhances agility, and optimizes the user experience when using public cloud and SaaS applications.

What does that all mean?

To understand how a software-defined WAN is critical to modern businesses, we first need to examine the traditional model.

The function of a traditional wide area network was to connect the users at one location to the data center containing the servers that hosted the applications and programs those people used. For example, workers in an office may have business-critical applications loaded on their work computers. To use those applications, they needed to send requests to the servers in the company’s data centers from their computers. A traditional setup enabled that at the cost of high latency.

Traditional models used multiprotocol label switching (MPLS) to route traffic accordingly. When applications were stored on physical servers, MPLS offered appropriate levels of network security and could manage application traffic.

That worked until cloud-based applications came along.

The introduction of SaaS and Infrastructure as a Service (IaaS) models required applications to work across multiple clouds. WAN traffic rose enormously as organizations started adopting cloud technology, making the traditional model unsuitable. It was no longer able to handle the levels of traffic generated, leading to network connectivity and security issues.

SD-WAN technology solves these problems by offering a new approach to network connectivity that improves resource usage across multiple sites. It ensures high levels of performance without sacrificing security.

How Does SD-WAN Work?

The SD-WAN model powers a cloud-first network so it can deliver superior quality of experience for people using cloud-based applications. SD-Wan systems can identify applications without intervention, allowing them to provide application-aware traffic routing across a network. This is ideal for networks operating multiple applications. Each application receives the appropriate policy enforcement and quality of service to ensure operation without sacrificing the performance of other applications.

Unlike SD-WAN, traditional network architecture relies on the use of routers to direct traffic and distribute application functions. This requires the use of transmission control protocol/internet protocol (TCP/IP) addresses and access control lists (ACLs). A more complex and less flexible model is the result, with the network unable to handle cloud-based applications.

The Benefits of SD-WAN Explained

Though we’ve touched on the benefits of a software-defined network already, it’s worth examining the issues that SD-WAN addresses in more detail.

Benefit No. 1 – Improved Security

SD-WAN features a host of security improvements over traditional models. These include integrated threat protection, which protects data as long as it’s enforced in the correct places. It also keeps traffic secure across broadband internet connections, allowing for safe traffic transfer into the cloud. Users also benefit from real-time access controls, allowing them to prevent access to data where needed.

Benefit No. 2 – Simpler Management

Large companies operating an older WAN model often have several traditional data centers, each containing servers. That results in a lot of time spent on network configuration and implementing appropriate security measures.

SD-WAN solves this problem by offering users a single management dashboard through which all aspects of the WAN are managed. It also provides detailed performance and business analytics, plus bandwidth forecasting that shows companies when they may need to upgrade their WANs.

Benefit No. 3 – A Better User Experience

Predictability is one of the key benefits of an SD-WAN solution. All critical applications have high availability due to their cloud-based nature, meaning employees are less likely to run into connectivity issues. SD-WAN traffic is also routed dynamically, which improves application delivery and enhances the user experience.

SD-WAN replaces the older MPLS services that cost companies a lot of money. Using more flexible broadband connections, businesses benefit from a more economical model that also allows them to leverage virtual private networks.

Benefit No. 4 – Seamless Cloud Connectivity

The introduction of cloud technology meant that businesses had to start connecting to external networks to use modern applications. SD-WAN offers seamless connections to public or private clouds, in addition to allowing companies to leverage both in their operations.

This leads to optimized workflows for many modern cloud platforms, such as Amazon Web Services, Microsoft Azure, and similar SaaS services.


MPLS technology powered business network infrastructure for over 20 years before the arrival of SD-WAN technology. With MPLS, network administrators could handle backup links and failure scenarios. However, they couldn’t do this in real-time and often had to travel to data centers to do their work.

SD-WAN is essentially an evolution of the core MPLS technology, offering software-defined networking that is far more efficient. Many define SD-WAN products as a software abstraction of traditional MPLS systems. With SD-WAN, administrators gain access to a cloud-aware form of networking that allows them to create secure and private connections regardless of the link or provider.

SD-WAN also unifies wide area networks by implementing centralized policies that enable real-time traffic management. This was impossible under MPLS frameworks because they attempted to link different types of infrastructure and policies. The result was a disjointed collection of networks that required more time-intensive management.

Explaining the Security Issue

We’ve mentioned security and how SD-WANs enhance it in a cloud-based world. However, it’s worth expanding on how an SD-WAN solution makes an organization’s network more secure.

Cyber security is one of the most pressing issues that modern businesses face. Approximately 64% of companies have faced some type of cyberattack, with these attacks being so pervasive that they resulted in 20 million data breaches in March 2021 alone. Attacks can reach such scales because many businesses have moved their operations to the cloud.


Imagine that a company has 15 offices and uses cloud technology.

With a traditional solution, that means each of those offices needs a separate firewall solution. So, that’s 15 firewalls with 15 contracts from security services. That’s a lot of contracts to manage. Furthermore, if you have offices spread across the United States, you can’t guarantee that all of your firewalls are provided by the same security company.

This adds additional layers of cost and complexity.

And it gets worse.

After implementing your 15 firewalls, things will tick along nicely until you need to upgrade your software or implement a new company policy. Now you have 15 separate upgrades that have to occur across your locations, which may be handled by up to 15 different security services. As you can imagine, this is complex enough for a medium-sized business to handle. But if you have a global enterprise operating hundreds of offices, the time and cost implications of a single upgrade are enormous.

By transferring to a cloud-based SD-WAN, most of these issues disappear.

SD-WAN centralizes everything. You may have 10, 50, or even 100 offices. And you can control traffic and security issues for all of them from a single location. The centralized nature of SD-WAN means network administrators control every device attached to the network and all of its endpoints.

In practice, this makes rolling out security updates much simpler. Instead of having to implement separate updates for every one of your branch offices, you can roll out patches and updates from one location at the touch of a button. Better yet, SD-WAN solutions mean you don’t even have to set up physical firewalls, eliminating another hassle that has plagued the network world for years.

The Main SD-WAN Examples

With the basics of SD-WAN solutions explained, and your new understanding of how these solutions enable WAN optimization, it’s time to look at practical applications. The following examples demonstrate how SD-WAN functions in modern business settings.

Example No. 1 – On-Premises SD-WAN

Many businesses will leverage on-premises solutions if they already have an existing private network that leverages on-premises data centers. This model either replaces the existing network or increases its effectiveness by allowing network administrators to shape traffic in real-time.

An on-premises solution works best for companies that have small networks. It allows for performance optimization and increased bandwidth with minimal outlay. In fact, an on-premises SD-WAN reduces costs over the long term.

This type of SD-WAN isn’t suitable for connecting to a cloud gateway. Instead, it’s focused solely on connecting a company’s multiple sites in a single private network. As such, it’s most effective for businesses that host all of their applications using in-house data centers.

Companies should be wary of using an on-premises SD-WAN if they need to leverage cloud-based applications. Often, this model is used as part of a hybrid WAN. A traditional MPLS network is used for applications that run in real-time, such as anything involving video or an internal virtual WAN architecture. The SD-WAN component comes in for any programs that require internet access.

Example No. 2 – SD-WAN Gateway

As soon as a company starts using cloud services, it needs to migrate away from the traditional WAN setup. A gateway SD-WAN enables this by allowing network administrators to connect an SD-WAN box to a cloud gateway. This creates a virtual WAN architecture that offers the benefits of real-time traffic management while improving network performance and reliability.

Another benefit comes in the ability to keep sessions active if a company’s internet fails. Most SD-WAN gateways are operated on the same networks as those used by major cloud providers.

In addition to improving performance, this allows the gateway connection to stay open even if the current internet connection drops out. Upon restoring the connection, traffic is rerouted to the previous session to prevent work interruptions. Think of this as a form of dynamic path selection designed to keep sessions running.

This is the ideal solution for companies that wish to maintain their existing private networks while migrating to the cloud. It works best for organizations that have multiple locations without the need for site meshing or companies with single-site locations.

Example No. 3 – Cloud SD-WAN

Think of cloud SD-WAN as a combination of on-premises and gateway. Organizations still benefit from higher availability, enhanced network security, and improved application performance. Communication between branch offices also continues to occur at you’re your main site.

The main difference between cloud SD-WAN and gateway lies in where your SD-WAN box connects. With cloud SD-WAN, the box connects to the networking point that’s nearest to a company’s SD-WAN vendors. This means traffic can jump straight onto the private or fiber optic lines provided by networking vendors to reduce latency.

That’s great news for traffic.

Plus, it enables real-time connectivity to major cloud applications while ensuring companies can maintain a focus on the security services required for data.

This type of SD-WAN is also sometimes referred to as cloud-enabled plus backbone. The name comes from how the networking vendor’s private connection acts as a backbone to enhance stability and performance.

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Frequently Asked Questions

Below are the most frequently asked questions.

What problems do SD-WANs solve?

SD-WANs solve several problems for companies that wish to leverage cloud applications. They improve security, ensure consistent performance, and enable companies to use technologies they might not otherwise have access to.

Is SD-WAN just VPN?

No, SD-WANs are not the same thing as virtual private networks (VPNs). The main difference between the two is that SD-WAN solutions provide gateways for networks of SD-WAN appliances. By contrast, VPNs provide point-to-point connections.

What does SD-WAN mean for MPLS?

Though MPLS still has its place in smaller business settings, SD-WAN technology will likely make it increasingly obsolete in the coming years. As more companies switch to the cloud, MPLS becomes increasingly costly and difficult to manage.
Author: Tibor Moes

Author: Tibor Moes

Founder & Chief Editor at SoftwareLab

Tibor has tested 39 antivirus programs and 30 VPN services, and holds a Cybersecurity Graduate Certificate from Stanford University.

He uses Norton to protect his devices, CyberGhost for his privacy, and Dashlane for his passwords.

You can find him on LinkedIn or contact him here.