DHL Weighs Hybrid WAN Options

A shift to hybrid WAN could yield substantial savings, even though it would be a complex undertaking for the global logistics company DHL, explained Head of Network Architecture Michael Becerra in a presentation at WAN Summit Singapore.

DHL has more than 10,000 sites spread across more than 200 countries. MPLS connectivity is provided by a mixture of service providers, including the likes of AT&T, British Telecom, and Orange. The company relies, to a large extent, on managed services for voice, data, and mobile connectivity.

Becerra’s decision to explore hybrid WAN technology based on SD-WAN was driven by a concern we often hear from companies shifting to hybrid WAN: the likelihood that traffic growth would exceed the budget to support it. Greater use of cloud services and immersive video are helping to fuel an expected doubling in capacity over the next two to three years, he said. Also contributing is the need to transfer Windows 10 patches that are upwards of 4 gigabytes.

While different companies have different reasons for shifting to hybrid WAN, the key motivator for DHL was a simple one. “We’re looking to save costs,” Becerra said.

Becerra’s decision to explore hybrid WAN technology based on SD-WAN was driven by a concern we often hear from companies shifting to hybrid WAN: the likelihood that traffic growth would exceed the budget to support it.

Cost Considerations

Becerra and his team considered four ways of addressing these concerns, including:

• WAN optimization, which was already pushed about as far as it could be
• Overbuilding the WAN, which would have been an option in mature markets, but was too costly in emerging markets
• Prioritizing traffic, which would have helped ease congestion concerns for critical traffic, but didn’t really address capacity concerns
• Hybrid WAN, which Becerra defined as “the offloading of internet traffic, software-as-a-service, internet infrastructure-as-a-service, and back office functionality” to lower-cost lower-performance connections, while retaining higher-performance (but higher-cost MPLS connections) for mission-critical communications

However, there were some downsides to hybrid WAN. For example, when DHL negotiated its managed services contracts, the company didn’t specify technologies or vendors. Instead it focused on capabilities like OSPF routing. “Obviously that changes with SD-WAN,” Becerra observed. And trying to standardize on a single technology globally “can be daunting.”

Proof of Concept

Nevertheless, hybrid WAN looked promising. Accordingly, Becerra and his team opted to undertake hybrid WAN proof of concept deployments to explore four key use cases, including:

• User internet access for cloud proxy, guest network, and bring-your-own-device access via local breakout
• Access to cloud services such as Office 365, Salesforce, Service Now, Microsoft Azure, and Amazon Web Services via local breakout
• Secure routing of back office applications via the internet to the data center, including applications such as e-mail, antivirus updates, Sharepoint services, and operations systems and app patching
• Internet use for disaster recovery of core business applications as a backup to the primary path

The hope was that the proof of concept trials will demonstrate that a conversion to hybrid WAN could generate a short-term return on investment, which would enable DHL’s information technology personnel to deploy hybrid WAN as a tactical technology. “We focus on countries and areas where we see the most cost benefit,” Becerra said.

To date, the hybrid WAN trials have shown promise. While full results are not yet available, DHL has seen a decrease of 40 percent to 50 percent in MPLS traffic from individual sites. Additionally, e-mail response times have improved–a result Becerra attributes to reduced queuing resulting from e-mail going over the internet instead of MPLS.

E-mail response times have improved–a result Becerra attributes to reduced queuing resulting from e-mail going over the internet instead of MPLS.

Becerra and his team have a comprehensive plan for completing a cost/benefit analysis comparing the status quo with hybrid WAN. They will look ahead five years and use a higher MPLS growth rate for the status quo option than for the hybrid WAN option. They will consider the cost of additional firewall and on-premise proxy infrastructure that would be required for the hybrid WAN option. Additionally, they will look at the cost to refresh customer premises equipment for the two different options.

Insource or Outsource?

A key decision that Becerra and his team have yet to make is whether to outsource hybrid WAN management or to handle management of the SD-WAN overlay internally while continuing to rely on service providers for management of the underlying connections.

“Traditionally if we look at just operational support, we can do it cheaper, because our supplier has to make revenue and [cover] charges around billing and capacity management,” Becerra observed. He also noted that “For any service we have to manage, we tend to do a better job because we have a better knowledge of our core business.”

On the other hand, buying hybrid WAN as a managed service would enable DHL to get an end-to-end service level agreement–something it wouldn’t be able to achieve with the internally managed option. Service providers also may have “feet on the ground” in countries where DHL doesn’t have its own IT personnel.

Becerra and his team will be weighing factors such as these as they near their decision about hybrid WAN.

Lessons Learned

Although DHL is still in the learning process, here are three takeaways from their process of deciding whether to migrate to hybrid WAN.

1. Don’t architect for perfection. Because hybrid WAN is a still-emerging technology, some network architects may be tempted to wait for anticipated new capabilities. But Becerra’s advice is “you have to look at what you can do today to gain benefits.”
2. Do proof of concept trials focused on key use cases. Identify where hybrid WAN might yield the greatest near-term benefits and focus on those for your PoC trials.
3. Do a cost/benefit analysis of hybrid WAN versus the status quo and make sure it takes all costs into account. Consider looking out several years as the DHL team is doing.