Comcast Businesses is bolstering its software-defined WAN (SD-WAN) bona fides through its planned acquisition of Masergy, a move that will enable the service provider to expand its offerings in the enterprise space and better compete with AT&T and Verizon.
Comcast Business officials on August 25 announced it had signed an agreement to buy Masergy, a company with more than two decades of experience in managed network, cloud, and security services. Though not as high profile as other players in the growing SD-WAN space, Masergy brings with it more than 1,400 customers in 102 countries, with many of those customers being larger enterprises.
The enterprise is an area that Comcast Business has coveted for a while, according to Zeus Kerravala, principal analyst with ZK Research.
“For Comcast, they’ve been trying to move up market for quite some time,” Kerravala told Enterprise Networking Planet. “They haven’t been tremendously successful doing that. If you look at their current [SD-WAN] offering, it’s really targeted more towards small businesses and Comcast doesn’t really have the enterprise chops. They haven’t served that market long enough to really validate themselves as the player. If you look at Masergy, their business is up market. Most of their customers tend to be on the larger side [and] they’re global customers, so it expands Comcast’s international footprint as well.”
Comcast Business President Bill Stemper echoed those thoughts, saying in a statement that “Masergy provides a perfect complement to our portfolio of enterprise services and solutions and will allow us to instantly and dramatically amplify our growth in the global enterprise market.”
No financial details about the deal were released and no expected closing time was announced.
SD-WAN on the Rise
SD-WAN is an important component in modern networks, giving organizations greater scalability, efficiency, and security at a time when application and data traffic is no longer confined only to corporate networks but is moved more freely between data centers, the cloud, and the edge. The SD-WAN market jumped 18.5 percent year-over-year in 2020, to $3 billion worldwide and will grow 18.9 percent a year through 2025, according to IDC.
Dell’Oro Group analysts saw a slowdown in the space last year due to the COVID-19 pandemic, but are predicting the market will grow an average of 24 percent a year through 2025.
Also read: SD-WAN is Important for an IoT and AI Future
Service Providers Seeking Partners
Service providers over the past several years have partnered with SD-WAN vendors to build out their services. AT&T partnered with VeloCloud in 2016, a year before VMware bought VeloCloud. In addition, in 2017, AT&T bought the software assets of former SD-WAN vendor Vyatta from Brocade and also has partnered with Cisco Systems for more than a year.
Verizon in 2017 partnered with Viptela, which was bought by Cisco that same year. Verizon has since expanded its partnership with Cisco, not only leveraging the company’s Viptela SD-WAN capabilities but also those of Meraki, also owned by Cisco.
Comcast Business has been a partner of Versa Networks, a player in the software-defined networking and SD-WAN spaces, for the past couple of years. Its SD-WAN service is based on Versa’s product.
Masergy’s capabilities will help Comcast Business in a number of ways. ZK’s Kerravala said Masergy has built out a sophisticated set of automation, management and orchestrations tools via its AIOps platform, which is important because “when you deal with large enterprises, the networks tend to be a little more complex, so you need better automation to be able to handle that. Comcast should be able to leverage that across their network.”
Masergy Brings the Enterprise
Masergy has carved out a space for itself in the SD-WAN space, offering white-glove and high-end service to the large enterprise market. Now Comcast Business will be able to add that to its lineup of services.
“This [deal] is targeted, really going after Verizon and AT&T,” Kerravala said. “And let’s face it, neither of those companies are really renowned for their service either. If broadband becomes a big part of network deployments, then Comcast should have a viable opportunity to really disrupt that market. They just didn’t really have the product or the reputation to do that.”
Comcast Business will look to leverage their strength in broadband and disrupt the massive presence AT&T and Verizon have in multiprotocol label switching (MPLS), the technology traditionally used to move data and applications between branch offices and central data centers before the rise of the cloud and the ongoing shift to a more distributed IT environment. With Masergy in the fold, Comcast Business will be able to offer organizations not only broadband for the last mile for network traffic but also run the traffic over Masergy’s backbone in the middle mile.
Masergy’s extremely low-latency network was designed to handle traffic from Cisco’s Telepresence video conferencing offerings and the company has better facilities than many large providers, the analyst said. The combination of that network with Comcast Business’ broadband is “a pretty interesting dynamic,” he said.
An Eye on UCaaS
Another facet of the deal revolves around unified communications-as-a-service (UCaaS). Masergy has a partnership with Cisco’s Webex business, a top UCaaS product. Comcast currently offers consumers a bundled package that includes internet, TV and voice.
“A lot of SD-WAN deployments are driven by migration from voice to UCaaS,” Kerravala said. “That’s one of the reasons why Masergy sells Webex, because it’s one of the best out there. Comcast’s UCaaS offering is homegrown. It’s a very basic kind of voice bundle. In some ways, Comcast could leverage that as well.”
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