Your IT person keeps saying SD-WAN. Your carrier keeps quoting it. Nobody has told you what it actually is, or why the price on the last quote jumped $600 a month.
Here is the plain version.
What SD-WAN actually does
You have offices. Each office has internet. If you have more than one office, they need to talk to each other. Maybe they share files. Maybe they run phones through one location. Maybe they have a shared app or server.
Old way: you paid the carrier for a private line between every office. That was called MPLS. It worked. It was also expensive. A single MPLS circuit could run $700 to $2,000 a month per site, on top of the internet you already paid for.
SD-WAN does the same job with software. It uses your regular internet at each office and stitches the offices together in a private overlay. Same result, cheaper pipes.
That is it. That is the whole idea.
Why the price changes
SD-WAN itself is not free. You pay for it in one of three ways.
One, the carrier sells it to you as a managed service. They install a box at each site, they run the software, they charge $150 to $400 per site per month on top of the internet.
Two, you buy the boxes yourself and pay a software license. Cheaper over three years, but you need someone to manage it.
Three, your IT provider (an MSP) bundles it into their monthly fee. You do not see a line item. It is baked in.
None of these is wrong. But you should know which one you are buying.
Where the savings show up
Real numbers from a client with 4 offices in Georgia and Alabama.
Before: 4 MPLS circuits at about $1,100 each, plus 4 internet circuits at about $450 each. Around $6,200 a month.
After: 4 internet circuits at $600 each (bigger pipes), plus SD-WAN at $250 per site. Around $3,400 a month.
That is $2,800 a month. About $33,600 a year. The SD-WAN pays for itself in the first month.
Not every case looks like this. Some clients have 2 offices and the math is closer. Some have 20 and the math is bigger. The point is the savings are real, and they are almost always on the transport side, not the software side.
When SD-WAN does not make sense
One office. If you have a single location, you do not need SD-WAN. You need good internet, and maybe a backup connection. That is a different conversation.
You already have fast, reliable circuits and no growth plans. If your MPLS is working and the contract has 2 years left, ripping it out to save money on paper may cost more in early termination fees than you save.
You cannot tolerate a single hour of downtime. SD-WAN uses public internet. It is designed to fail over between two connections at each site, which makes it more reliable than a single MPLS line in practice. But the sales pitch of "carrier-managed private line" still comforts some buyers, and that is fine.
What to ask before you sign
Three questions.
What is the monthly cost per site, broken out into transport (the internet) and SD-WAN (the software or box)? If the quote is one blended number, ask again.
What is the term? Most SD-WAN contracts are 3 years. Some are 5. The 5-year deals lock you into the price of internet in 2026, which is a bad bet.
What happens at renewal? If the carrier controls both the internet and the SD-WAN, they can raise either one. Get both prices on paper.
That is the finance version of SD-WAN. Your IT team can handle the rest.
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