What is SD-WAN?

When a business expands from a single location to multiple locations, its network connectivity needs to evolve. Software-Defined Wide Area Networks (SD-WAN) can be a solution to help meet these needs. So, what is SD-WAN?

A Software-Defined Wide Area Network is a software-, cloud-based version of a wide area network (WAN). A secure SD-WAN uses centralized, software-based control to manage traffic across distributed sites, often through cloud-hosted orchestration and policy management, which offers enhanced agility, control, and visibility to adopting organizations.

Here’s a great example: a small business has three plants within a region. It needs a Wide Area Network (WAN)—a computer network that spans a wide geographic area—for reliable connectivity between headquarters and manufacturing plants.

For agility, the manufacturer switches to a Software-Defined Wide Area Network (SD-WAN). This approach elevates network traffic management away from on-premises hardware to software in the cloud. Now the manufacturer benefits from better performance, cost savings, and enhanced network security.

To understand how SD-WAN works, let’s start with the traditional WAN. In a traditional WAN, each device has its own control plane (the “brains” that teach the router how to forward data to other routers) and its own data plane (the “muscle” that actually forwards the data). Administrators must configure each device and its control plane separately.

SD-WAN operates by using software-defined networking (SDN) principles to manage and optimize WAN connectivity. SD-WAN centralizes policy and control functions, allowing traffic decisions to be managed more consistently across the WAN.

With centralized control, administrators can easily configure multiple devices and implement network policies faster. They can write rules and policies to deploy across an entire network.

Traditional WANs typically use a hub-and-spoke architecture, with a data center at the hub and the spokes extending to branch offices. Cybersecurity tools are applied at the central hub, which means data traffic needs to be backhauled to the central hub for verification before moving to its destination.

Backhauling wastes bandwidth, adds latency, and impairs application performance. SD-WAN can reduce unnecessary backhaul by allowing more traffic to take direct paths when policy allows—for example, branch-to-branch or branch-to-cloud.

SD-WAN can have a variety of different architectures: on-premises SD-WAN, cloud-enabled SD-WAN, and cloud-enabled with backbone SD-WAN. The flexible nature of SD-WAN architecture compared to traditional WANs brings a variety of advantages through its key components and functions.

Key components of SD-WAN infrastructure include multiple interlocking pieces that help create a more intelligent and efficient network management system. Common SD-WAN components may include:

Why are more businesses expanding their use of SD-WAN when it’s time for a network upgrade? Businesses are faced with a surge in video, mobile data, and other data-intensive applications where traditional WAN applications may fall short.

Businesses are also increasingly adopting newer technologies such as the Internet of Things (IoT), artificial intelligence (AI), and big data analytics. SD-WAN solutions can help businesses keep up with today’s highly dynamic demands for bandwidth and connectivity.

SD-WAN technologies come with fewer limitations than traditional WANs. Before SD-WAN, businesses operated their WANs manually and statically. SD-WAN can improve network performance, support cost efficiency, and strengthen policy-based traffic control and segmentation.

Improved network performance and reliability

A top benefit of SD-WAN is improved network performance. SD-WAN boosts network performance in several ways, including optimized bandwidth, intelligent traffic steering, enhanced application performance, and centralized management.

SD-WAN can dynamically select the best path for traffic. For example, it can help ensure high-quality audio and uninterrupted video streaming by prioritizing voice and video over less critical applications. SD-WAN reduces backhauling and uses direct cloud connectivity, which reduces latency and improves application response time.

Finally, SD-WAN centralizes network management. This means that you get a comprehensive view of network performance that you can react to on the fly.

Instead of looking for data for multiple applications at different sites, your network performance data is available in one place. This visibility into your network and applications through remote monitoring gives you more control.

Cost savings and efficiency

In the past, WANs used Multiprotocol Label Switching (MPLS), which is a high-performance networking method that moves data through enterprise or service provider networks by using short labels to guide traffic, instead of relying on lengthy network addresses. This was to provide the best performance and reliability for last-mile connectivity. The downside is that MPLS is less budget-friendly to deploy at scale or for redundancies.

SD-WAN leverages MPLS circuits with low-cost broadband connections. Less-critical traffic can traverse cheaper data transport technologies like broadband internet or 5G wireless.

Improved security and secure cloud access

When it comes to your network and security, SD-WAN offers enhanced security benefits compared to traditional WAN architecture. Secure SD-WAN can deliver security functions through software, virtualized services, or cloud-based controls rather than relying only on dedicated on-premises hardware.

Instead, network security is moved to the cloud, where administrators can apply predefined policies on all traffic for enhanced threat protection. A central web-based console allows administrators to manage and monitor the network traffic patterns holistically and drill down to roll out security services such as web filtering and malware protection to individual locations, users, or traffic types.

This greater visibility and control over network traffic patterns makes it less likely that malicious intent is able to disrupt network operations.

These benefits apply to network-connected devices and applications across your business. With its flexibility, scalability, and network optimization, SD-WAN enables you to have stronger network security.

When you compare SD-WAN to traditional networking, it’s easy to see advantages in terms of cost, flexibility, and improved performance. Plus, a managed SD-WAN provider can be a resource for your IT teams.

SD-WAN vs. MPLS

Both SD-WAN and MPLS are technologies used for wide area networking. MPLS came first, debuting in the late 1990s, while SD-WAN arrived later, around 2014. MPLS routes traffic using labels instead of network addresses.

MPLS networks are considered reliable and secure but aren’t as cost-efficient. Also, MPLS backhauls traffic to a centralized security point such as a data center, which consumes bandwidth, adds latency, and can impact application performance.

SD-WAN has the major advantage of generally being cheaper than MPLS, since it uses broadband internet rather than dedicated circuits. SD-WAN can secure applications at the branch, data center, or in the cloud, so backhauling is not required.

SD-WAN’s intelligent traffic routing reduces latency and improves performance. SD-WAN can scale up or down quickly compared to network infrastructure, unlike traditional WAN that relies on physical hardware.

SD-WAN vs. WAN

As noted above, SD-WAN elevates network traffic management away from on-premises hardware to software in the cloud. SD-WAN reduces costs by using internet connections rather than less budget-friendly dedicated lines.

SD-WAN is easier to manage than traditional WAN networks, which leads to cost savings with maintenance and support. Aside from cost savings, SD-WAN brings operational simplicity, improved performance, scalability, and enhanced security.

A note about SD-WAN security: While SD-WAN has some security features, it typically needs third-party integrations for comprehensive protection at the network edge.

Even with this requirement, SD-WAN advances WAN and is more cost-effective than MPLS. In addition, it’s also a solution for integration with the Internet of Things.

Many organizations deploying Internet of Things (IoT) solutions rely on SD-WAN to handle the massive volumes of data created and consumed by these devices. SD-WAN is ideal for IoT deployment models because it takes a software-based approach to network traffic management to deliver and scale network services and capacity in near-real time. SD-WAN gives businesses a flexible, cost-effective network architecture that connects IoT devices.

When working with IoT for business, SD-WAN can improve IoT security, ease IoT deployment, centralize IoT network visibility and management, and improve scalability of IoT networks.

Improved connectivity and bandwidth use

SD-WAN uses multiple connection types to increase network bandwidth and improve traffic flows, which in turn ensures that IoT devices have efficient data transmission. It also reduces latency for IoT devices by routing traffic through the cloud rather than a central data center.

Security of IoT devices with SD-WAN

IoT devices are targets for today’s malicious actors due to the volume of devices and the lack of robust security controls. It’s less practical to deploy anti-malware, anti-virus, data loss prevention, and other security clients on thousands of devices ranging from thermostats to manufacturing robots compared to network-based solutions.

SD-WAN can support IoT deployments by improving connectivity, segmentation, and centralized policy control across distributed sites.

Predefined security policies based on rules can be applied holistically through a highly secure web gateway across the network, and users can drill down to roll out security services such as web filtering and malware protection to individual locations, devices, users, or traffic types.

SD-WAN adoption is on the rise for good reason. Businesses of all sizes, however, can face challenges while deploying SD-WAN. Fortunately, you can jump these hurdles by choosing a managed SD-WAN solution.

A fully managed SD-WAN vendor can install and manage edge devices, procure and manage access links from multiple network service providers, and manage the solution’s day-to-day network management aspects.

Whether you’ve already implemented SD-WAN or are thinking of doing so, it’s good to evaluate its role in your business. What business outcomes are you expecting with SD-WAN? Improved network performance? Cost savings? Enhanced security? A managed service provider can help you design a solution that will prioritize these needs.

If you haven’t started your journey to SD-WAN, how do you know it’s right for you? Here are some questions to ask:

We offer a variety of edge solutions, including SD-WAN Cisco, Aruba SD-WAN, and Network Functions Virtualization (NFV).

Businesses of all sizes can benefit from network flexibility, cost savings, improved security, network reliability, redundancy, and user productivity. All in all, you can look forward to improved network agility that prepares your business for the future.

Learn more about AT&T Managed SD-WAN solutions, or to connect with an expert who knows business, contact your AT&T Business representative.

See how ultra-fast, reliable fiber and 5G connectivity protected by built-in security give you a new level of confidence in the possibilities of your network. Let our experts work with you to solve your challenges and accelerate outcomes. Your business deserves the AT&T Business difference—a new standard for networking.

Updated on July 29, 2026 by Zoya Cochran