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Issue 1 Blockchain + WAN Edge = Leading the Digital Transformation 2 Practical Blockchain: A
Issue 1 Blockchain + WAN Edge = Leading the Digital Transformation 2 Practical Blockchain: A

Issue 1

Blockchain + WAN Edge = Leading the Digital Transformation

1 Blockchain + WAN Edge = Leading the Digital Transformation 2 Practical Blockchain: A Gartner Trend

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Practical Blockchain:

A Gartner Trend Insight Report

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WAN to Cloud Digital Transformation Journey

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White Paper: Eight Questions You Must Ask When Considering an SD-WAN

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About Talari Networks

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+ WAN Edge = Leading the Digital Transformation t 2   Gartner Research Note G00325933, David
+ WAN Edge = Leading the Digital Transformation t 2   Gartner Research Note G00325933, David
 

Gartner Research Note G00325933, David Furlonger, Ray Valdes, 3 March 2017

 

Practical Blockchain: A Gartner Trend Insight Report

Blockchain is evolving from a digital currency infrastructure into a platform for digital transformation. This report helps CIOs understand its use, and whether the hype is true about how it can help with transaction costs, integration, technology readiness, business-model creation and efficiency.

Opportunities and Challenges

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• Blockchain technologies offer a radical departure from the current transaction and record-keeping mechanisms and can serve as a foundation of disruptive digital businesses, for both established enterprises and startups.

• Blockchain technologies enable a standard trust architecture that allows untrusted entities (both human and nonhuman) to undertake commercial transactions and exchange value with a diverse range of assets.

• Many blockchain technology and foundational concepts are immature, poorly understood and unproven in mission-critical, scaled business operations.

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San Jose, CA Morrisville, NC Gerrards Cross, UK

Blockchain + WAN Edge = Leading the Digital Transformation is published by Talari Networks. Editorial supplied by Talari Networks is independent of Gartner analysis. All Gartner research is © 2017 by Gartner, Inc. All rights reserved. All Gartner materials are used with Gartner’s permission. The use or publication of Gartner research does not indicate Gartner’s endorsement of Talari Networks’ products and/or strategies. Reproduction or distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see “Guiding Principles on Independence and Objectivity” on its website.

• Blockchain technology has operated outside traditional legal, accounting and institutional governance frameworks, threatening long-standing working practices.

What You Need to Know

CIOs involved in building and expanding a digital business must be aware that:

• Blockchain is an alternate computing model that uses distributed and decentralized computing networks to potentially offer greater levels of security and lower costs than traditional methods.

• Blockchain offers a new way to manage trust between untrusted parties by supporting an immutable record of transactions and other types of value exchange.

Blockchain + WAN Edge = Leading the Digital Transformationtt l 3

• Many blockchain technologies are not fully developed, are untested, and will require early adopters to accept significantly increased levels of operational risk over the next five to seven years.

• The vendor ecosystem is neither cohesive, nor fully formed, and consortia are jockeying for attention with professional services firms and startups requiring careful, multilayered evaluation of the market.

Insight From the Analyst

The Blockchain Revolution Promises to Touch Every Industry

David Furlonger, Vice President and Gartner FellowThe Blockchain Revolution Promises to Touch Every Industry Ray Valdes, Vice President and Gartner Fellow “The

Ray Valdes, Vice President and Gartner FellowIndustry David Furlonger, Vice President and Gartner Fellow “The blockchain revolution began with bitcoin, which used

“The blockchain revolution began with bitcoin, which used distributed ledger technology to foster trust in a currency and transaction mechanism not backed by any government or traditional institution.”

Visionary entrepreneurs and CIOs building and expanding digital businesses are keeping the flow of transformation going. Their goal is to reinvent the very nature of commercial activity by removing intermediaries and enabling more-fluid business processes to be conducted in diverse ecosystems. This report explains the practical realities facing CIOs, business leaders, developers and other potential adopters of blockchain technology.

This is not just a new technology to improve existing transaction mechanisms; blockchain provides greater levels of security, it creates new forms of assets, and it offers unquestionable provenance of anything conveyed over the network. Financial services was the first industry sector to recognize the technology’s promise, particularly its potential for cost reduction (for intercompany reconciliation, for example). However, blockchain technology has applicability

to many business areas including government, healthcare, education, manufacturing, energy and supply chain.

The anticipated benefits from these use cases raise

a conundrum, in that embracing the efficiency and

cost benefits of blockchain may also contribute to an enterprise or institution’s demise. For example, and perhaps ironically, while financial services firms (and any other entity performing a centralized intermediary role in an industry) see the benefits of improving a variety of processes — from trade finance to securities settlements, as well as transaction and records management — they also face the ultimate threat of total disintermediation from the implementation of a decentralized, distributed P2P network that potentially makes the traditional centralized business model irrelevant. Similarly, technology vendors are faced with the threat of significant stack rationalization as the distributed network and applications, and shared, secure “golden record” of data, potentially negate the need for convoluted transaction reconciliation, databases, and assorted other technologies.

Many business leaders, however, have read magazines or seen TV reports about blockchain without fully grasping what it is, and what impact it might have on their businesses, industries and even society. CIOs have a role to play in providing guidance in business language that allows the risks and opportunities to be properly understood. Because blockchain is not a tactical response to a standard technology problem, clear strategic foresight must be developed — and often enhanced with multiple business-use-case proofs of concept (POCs). CIOs that invest in studying and experimenting with this emerging technology will be in a better position to address their boards and senior executives with greater clarity and with a stronger fact base.

It is critical at this stage in blockchain’s evolution

that hype is recognized, and the emergent nature of the technology and its capabilities are clearly

l Blockchain + WAN Edge = Leading the Digital Transformationt

Blockchain + WAN Edge = Leading the Digital Transformation t understood. Moreover, much of the discussion

understood. Moreover, much of the discussion about blockchain focuses on the technology itself, and diverts attention away from the radical societal and business shifts it could enable (through the introduction of smart contracts that execute without human intervention, the facilitation of thing- to-thing, thing-to-person and thing-to-business relationships, or changing the nature of commercial identification and transaction authentication, for example).

This report explains the practical realities facing CIOs, business leaders, developers and adopters of blockchain. It is the first of two Trend Insight Reports that will be published in 2017, giving clients a firm basis from which to start business conversations, develop their thinking, and refine their approaches to using blockchain as the foundation for building and enhancing a digital business and creating a new civilian infrastructure.

digital business and creating a new civilian infrastructure. Executive Overview Definition Blockchain promises genuine
digital business and creating a new civilian infrastructure. Executive Overview Definition Blockchain promises genuine

Executive Overview

Definition

Blockchain promises genuine long-term potential for the global transformation of economies and industries that, over time, will lead to the era of the programmable economy (see “Maverick* Research:

The Programmable Economy Is the Ultimate Destination for Digital Business”). A practical approach to blockchain development demands a clear understanding of the business opportunity, the capabilities and limitations of blockchain technology, a trust architecture, and the necessary skills to implement the technology. Blockchain technology addresses use cases across every industry and government.

Blockchain’s key attributes and potential benefits are:

• Improved cash flow

• Lower transaction costs

• Asset provenance

• Native asset creation

• New trust models

In the first-generation model, blockchain is a type of distributed ledger in which value- exchange transactions (in bitcoins or other digital tokens) are sequentially grouped into blocks. Each block is chained to the previous block and immutably recorded across a peer-to-peer network, using cryptographic trust and assurance mechanisms. Depending on the type of ledger and implementation, transactions can include programmable behavior.

Blockchain + WAN Edge = Leading the Digital Transformationtt l 5

Research Highlights

Priming the Pump: Get Your Enterprise Ready

“Blockchain is generating huge interest from multiple industries and continues to rank as one of the highest growth searches on gartner.com.”

The buzz around blockchain has placed it at the Peak of Inflated Expectations in Gartner’s “Hype Cycle for Blockchain Technologies and the Programmable Economy, 2016.” Moreover, based on Gartner’s boards of directors survey (see “Survey Analysis: Boards’ View of Digital Business Will Force CIOs Out of Their Comfort Zone”) blockchain and digital currencies are seen as an opportunity that must be investigated (see Figure 2). This interest —

at the most senior levels — is putting pressure on CIOs to quickly gain a clearer understanding of the nature of the technology, its economic potential, and its relevance to meeting business demands.

Enterprises face multiple dilemmas when contemplating the use of emerging and complicated technological developments. They are keen to exploit the advantages that blockchain purports to offer, yet they are simultaneously — and justifiably — wary of the potential risks, both from a technological and a business standpoint.

In the short term, that wariness will make all but the most pioneering firms fall behind in their development of blockchain’s potential. In the long term, however, blockchain won’t merely make enterprises more cost-efficient; it could change

Figure 1. Blockchain Instills Trust in all Parts of a Transaction Chain Source: Gartner (March
Figure 1. Blockchain Instills Trust in all Parts of a Transaction Chain
Source: Gartner (March 2017)

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Blockchain + WAN Edge = Leading the Digital Transformation t Figure 2. Board-Level Opinions on Blockchain
Figure 2. Board-Level Opinions on Blockchain and Digital Currencies Source: Gartner (March 2017)
Figure 2. Board-Level Opinions on Blockchain and Digital Currencies
Source: Gartner (March 2017)

the very business models they operate under, and transform whole industries and even the larger global economy.

“While faced with uncertainty and a confusing set of messaging from vendors and promoters — as well as concerns about legality and legitimacy — Gartner believes that CIOs and business leaders should be cautious about the anticipated evolution of blockchain, and its ultimate ability to be a game-changer.”

Regardless of vendor claims, Gartner anticipates that, through 2018, 85% of projects with “blockchain” in their titles will deliver business value without actually using a blockchain. Regardless of whether the technology challenges can be overcome (see “The Bitcoin Blockchain: The Magic and the Myths”), multiple business issues persist, including legal and regulatory considerations, institutional frameworks,

and the very nature of how society functions in a distributed, autonomous, P2P context.

Consequently, CIOs and business leaders must take a measured approach to understanding how to balance the current reality of blockchain technology maturity, the potential for divergent (and therefore not easily interoperable) blockchains, and capturing the anticipated business opportunities. A SWOT analysis (see Figure 3) can ground conversations with senior executives and prepare their enterprises for more radical change as part of their digital business transformation initiatives.

In addressing the issues raised in this analysis, CIOs and business leaders need to:

• Have a firm grasp on how to address the flow of questions from the CEO and board of directors.

Blockchain + WAN Edge = Leading the Digital Transformationtt l 7

Figure 3. Blockchain Strengths, Weaknesses, Opportunities and Threats (SWOT) Source: Gartner (March 2017)
Figure 3. Blockchain Strengths, Weaknesses, Opportunities and Threats (SWOT)
Source: Gartner (March 2017)

There is a clear need for gathering education and increasing awareness at this time, especially in the context of risk management, business-model impact, and future designs of industries.

• Manage business expectations as vendors, professional services firms and general market commentary put pressure on planning cycles. Enterprises do not need to sign million-dollar deals to investigate blockchain’s potential. Involvement in various consortia may help improve general grounding in the concepts and technology capabilities, as well as allowing access to broader/deeper skill sets. This is all on the condition that there is a clear recognition as to the

cost of involvement (in terms of time, money and intellectual consideration) with no immediate prospect of a return.

• Undertake measured R&D/innovation efforts with the primary objective of identifying realistic use cases and learning how to support the adoption of this technology.

CIOs should also undertake a digital readiness assessment to ensure the organization is capable of adopting such radical changes to its business model, processes, appetite for risk and existing technologies (see the Gartner Recommended Reading section).

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Related Research

“What CIOs Should Tell the Board of Directors About Blockchain”: Many boards of directors will call upon their CIOs to brief them on blockchain due to the current market hype. CIOs should focus on three points: a description of blockchain, frictionless markets and the cross-industry business impacts of a programmable economy.

“Blockchain: Managing Business Expectations”:

Inflated expectations caused by blockchain hype make it crucial to ensure that everyone in the enterprise understand what benefits the technology can realistically provide.

“How to Determine If You Need a Blockchain Project, and If So, What Kind?”: Many successful blockchain proofs of concept fail to turn into projects meant for real use. By following a structured process, CIOs can determine if they need a blockchain project, and if so, what kind.

“How to Develop a Business Case for Blockchain Projects”: Business cases for blockchain projects should focus on the unique strengths and challenges of this nascent technology. This research note outlines the key benefit, cost and risk elements that CIOs need to address in blockchain business cases.

“Market Guide for Blockchain Consulting and Proof-of-Concept Development Services”: Many organizations are looking to consultants for help in understanding the applicability and impact of blockchain for their business. Qualified resources are scarce. Sourcing and vendor management leaders can use this research to identify potential partners.

“Top 10 Mistakes in Enterprise Blockchain Projects”:

Blockchain technology is at the Peak of Inflated Expectations in Gartner’s Hype Cycle, which means that the Trough of Disillusionment is not far off. CIOs should be aware of the common mistakes that can lead to disappointment and failure in enterprise blockchain projects.

 

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“Toolkit: Blockchain Consortium Initiatives”:

With so many blockchain consortium initiatives, CIOs feel lost. This Toolkit provides an overview of current consortia and their key characteristics. Bank CIOs will gain a better understanding of the landscape to improve decision making concerning selection and potential membership.

“Five Essential Actions to Prepare TSPs for the Enterprise Blockchain Market”: The enterprise IT market shows significant early interest in blockchain and there is a new blockchain ecosystem with little presence of traditional TSPs. Technology business unit leaders must adopt Gartner’s five preparatory actions now to capitalize on forthcoming enterprise adoption of blockchain.

“Market Trends: What CSPs Should Do About Blockchain”: Leading communications service providers (CSPs) have begun exploring blockchain as they seek to innovate and offer new services. CSP technology business unit leaders can use this research to tackle the disruptive nature of blockchain to generate, manage and transform innovation into business opportunities.

“Report Highlight for Market Trends: Look Beyond Technology to Succeed in Blockchain”: Significant interest in blockchain from the banking, securities and insurance industries is confined mostly to proofs of concept, without ensuing production-level projects. To achieve growth, technology product management leaders must help clients build convincing business cases.

Blockchain’s Varied Uses

Once executives are educated about the strengths, weaknesses, opportunities and threats of blockchain, and the enterprise is prepared for radical change, CIOs and business leaders need to gain a clear understanding of the mission-critical priorities that blockchain could address. A solid footing for proof-of-concept initiatives and business use cases will be key.

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“CIOs and business leaders need to be aware that, of the several hundred use cases being discussed in the market, none are in full production — even in the financial services Industry.”

In November 2016, at one of Gartner’s regular Blockchain SteerCo meetings, 1 we asked the attending financial services firms (mainly Tier 1 pioneers, exchanges, large payment utilities and central banks) how many had embarked on a blockchain POC over the previous two years. All 32 organizations raised their hands. We then asked how many of these were still operational — only four hands stayed aloft, and of those, only one had live code running (and that was in a test environment).

The bottom line is that no enterprise has yet been able to take a POC to scale. This is partly a technology issue, but inhibitors also include multiple business challenges (including legal, risk, accounting, culture and strategy). That said, discovery and experimentation is critically important. POCs help improve cross-enterprise collaboration and uncover the “art of the possible.”

Outside of focused problem solving, the opportunity to assess the strategic picture for an entire industry should be considered. Like the internet before it, blockchain has the potential to reshape industry dynamics and disintermediate central actors (such as banks, government agencies and lawyers) in their market context. No industry is immune, and neither are governments. The ability of blockchain to provide information transparency and immutability, the potential for smart contracts, and the opportunity to create new business models should force CIOs and business leaders to review the fundamental aspects of their value chains, and urgently conduct scenario planning and/or implication theory analysis.

Clearly these opportunities paint a landscape of future economic development and potential growth that is worthy of assessment, especially as Gartner predicts that:

• By 2022, at least one innovative business built on blockchain technology will be worth $10 billion.

Blockchain + WAN Edge = Leading the Digital Transformationtt l 9 Figure 4. Forecast: Blockchain
Blockchain + WAN Edge = Leading the Digital Transformationtt l 9
Figure 4. Forecast: Blockchain Business Value, Worldwide 2017-2030
Millions of Dollars
Business Value
Growth
Annual Growth Rate (%)
3,500,000
140
128
3,160,041
3,000,000
120
104
2,500,000
100
2,000,000
80
1,500,000
60
1,000,000
40
500,000
20
27
0
0
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
© 2017 Gartner, Inc.
Source: Gartner (March 2017)

l Blockchain + WAN Edge = Leading the Digital Transformationt

• By 2030, 30% of the global customer base will be made up of things, and those things will use blockchain as a foundational technology with which to conduct commercial activity.

• By 2025, the business value added by blockchain will grow to slightly over $176 billion, then surge to exceed $3.1 trillion by 2030 (see Figure 4).

Having a grasp on the economic potential for blockchain is essential to better analyze investment spend and prioritization, by industry and geography. As with many prior emerging technology- enabled changes, the “s curve” of growth is quite pronounced, and this Trend Insight Report offers Gartner clients a forecasting tool that will help them to better understand the impact on their business.

Related Research

“Blockchain Trials Across Industries Show the Pulse of a Rapidly Moving Professional Services Market”:

Gartner analyzed 129 blockchain consultancy engagements carried out by providers, giving essential insight into the market. Sourcing and vendor management leaders can use this insight to understand the emerging professional services market for blockchain and leverage it for maximum business benefit.

“Toolkit: Government Use Cases for Blockchain”:

Government interest in blockchain technology is intense and diverse. This Toolkit provides CIOs and executives with use cases and guidance to help them evaluate and make more informed choices about blockchain-related innovation for their organizations.

“Toolkit: Overview of Blockchain Use Cases”:

Many industries are looking at blockchain. CIOs and business executives can use this Toolkit to understand the conceptual focus of blockchain developments and organizations conducting R&D. Thus, they can increase strategic dialogue internally and engage customers early in blockchain innovation.

“How CIOs Can Identify Viable Blockchain Use Cases in Insurance”: Blockchain promises to revolutionize the insurance industry, but it is still an emerging technology with a lack of standards and unproven use cases. CIOs should use this research to help their innovation teams focus on blockchain use cases that align with their organization’s strategic objectives.

“Blockchain in Utilities: Promise and Reality”: Utility industry interest in blockchain technology is rising. By understanding the potential uses of blockchain, utility CIOs can make more informed choices about their aspirations for and approaches to blockchain- related innovation.

“Blockchain Will Drive Digital Branding in Consumer Goods Manufacturing”: Blockchain technology is positioned to provide a platform that could enable consumer goods manufacturers’ CIOs to embed digital value in physical products. This could result in more protectable brand differentiation and innovative value propositions.

“Why Retail Payments Systems Don’t Need Blockchain”: Retail payment systems could benefit from an injection of innovative thinking, but blockchain and distributed ledger technologies won’t be ready to transform retail payment value chains for at least five years. Bank CIOs must recognize this barrier to their digital banking strategies.

“Forecast: Blockchain Business Value, Worldwide, 2017-2030”: Gartner’s new business value forecast methodology is a method to quantify the value of technology innovation rather than the dollars spent upon it. The business value-add of blockchain will grow to slightly over $176 billion by 2025, then surges to exceed $3.1 trillion by 2030.

“Seven Things That Supply Chain Leaders Need to Know About Blockchain”: Blockchain has the potential to transform and disrupt supply chains by documenting, validating and securing each step of the chain with an unerasable history. This note

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provides supply chain leaders with an overview of blockchain concepts and issues, including some early pilots.

Using an Immature Technology in the Best Way Possible

“Using an immature technology such as blockchain means CIOs and their business peers are pioneers of a sort. Just like any pioneers, they must realize they are entering a world where new rules, new risks and new opportunities can be found”

Studying the new landscape before plunging ahead, or learning how to recover from mistakes, are essential qualities for any enterprise looking to gain a competitive edge by using a new technology. This is especially the case with blockchain, because it brings together several technological components from which enhanced value can be achieved.

These include:

• Consensus mechanisms

• Records management

• Encryption

• Digital wallets

• Distributed networks

• Asset creation

• Transaction execution

Some of these technologies stem from 20th century software (for example, encryption and the Practical Byzantine Fault Tolerance algorithm). Some are newer (such as “smart contract” programmable value exchange).

Blockchain provides an opportunity to radically rationalize application, transaction processing and

records management technologies by providing a standard architecture to address business problems including removing the need for reconciliation on an intracompany, and intercompany basis.

However, while many innovation labs are focused on the core development aspects of blockchain technology, it is rare that we find enterprises that have (or are adequately addressing) broader, critical technology process and operational issues.

There are a number of questions for CIOs to consider as they review the technology choices in front of them:

• What platforms or technologies are in the market, and which ones are ready for testing, let alone production use?

• How does the potential development or acquisition of blockchain technologies impact existing IT strategic plan (in terms of the use of open source, APIs or integration)?

• How will distributed ledgers impact existing information management strategies and operations?

• Are the right skills in place to consider blockchain development and deployment?

• How will blockchain usage impact the enterprise’s risk policies and procedures (as well as the implications for legal and regulatory guidelines and rules)?

• Which architecture and implementation styles should be considered based on the business context?

Regarding this last point — blockchain has three inherent architectural considerations: platform, solution and ecosystem, as well as differing implementation styles — intraenterprise, private, hybrid and public. CIOs and their business

l Blockchain + WAN Edge = Leading the Digital Transformationt

Blockchain + WAN Edge = Leading the Digital Transformation t counterparts must evaluate the criteria surrounding

counterparts must evaluate the criteria surrounding public (permissionless) and private (permissioned) deployment styles. Failure to accommodate the right architectural approach could lead to significant operational risk issues, loss of intellectual property and/or missed business opportunities.

Therefore, before any blockchain system can be considered ready for production, Gartner believes it is critical to address the challenges that blockchain’s technological immaturity presents. It is also important to understand that, of the approximately 75 blockchain platform providers, not all will survive. The vast majority are startups, and we know that the majority of those will fail. 2

CIOs need to accommodate a volatile supplier landscape in their planning and research and development initiatives over the short term. As we have previously experienced with major technology innovations (for example, with the e-commerce, social and mobile platform supplier market) several years need to lapse before a stable and more- dominant platform supplier market establishes.

Gartner predicts that, by 2025, five blockchain/ distributed ledger platforms will be “mainstream” commerce platform enablers.

Related Research

“How to Make the Most of a ‘Pointless’ Blockchain Project”: Many enterprises undertake blockchain projects that are poorly conceived, misaligned with business requirements, and poorly supported by current blockchain technology. But it’s still possible for CIOs to derive some value from these projects, as this document shows.

“Blockchain Usage Depends on Blockchain Wallet Platforms”: Existing cryptocurrency wallets are too functionally limited to be sustainable as stand-alone solutions. The real potential for bank CIOs and digital business leads is in being able to manage and integrate blockchain activity — not just transactions — into existing digital interfaces and platforms.

“Building Blockchain into Your Data and Analytics Program”: Blockchain’s distributed trust model promises to remake existing business processes. Data and analytics leaders must recast existing data management and analytics capabilities and add new competencies to manage risk and exploit new opportunities.

“Adapt Your Information Governance for the Rise of Blockchains”: The distributed trust model of blockchain technology introduces new business opportunities and promises to unsettle many existing business processes. Data and analytics leaders must adapt their information governance practices to this new reality, if their organizations are to remain competitive.

“The Evolving Landscape of Blockchain Technology Platforms”: The competitive arena of blockchain technology platforms consists of more than 70 contenders — either announced or emerging. CIOs must recognize the evolutionary path of blockchain technology, and the competitive dynamics of this sector, if they are to manage the risks of platform selection.

“Toolkit: The Current Landscape of Blockchain Patents”: The opportunities for blockchain use-case development seem boundless, so validating and protecting IP will become more important. CIOs will be challenged to codify the specific nature of the technology innovation and, therefore, the quality of the filing and its competitive and legal protection.

“Understanding Blockchain Platform Architectures and Implementation Styles”: Market perception is that there are two types of blockchain architectures:

permissioned and permissionless, but the situation is much more complicated. CIOs must understand the relevant components and styles to make appropriate choices when developing blockchain use cases.

Blockchain + WAN Edge = Leading the Digital Transformationtt l 13

“Be Careful What You Wish for When Engaging Smart Contracts to Support Your Digital Business”:

Smart contracts will eventually automate the mass personalization of value exchange. Today the technology is immature, mercurial and once live is irrevocable. CIO’s should invoke at their peril.

Related Priorities

Gartner Analysts Supporting This Trend

David FurlongerRelated Priorities Gartner Analysts Supporting This Trend Ray Valdes Rajesh Kandaswamy Related Resources Webinars

Ray ValdesGartner Analysts Supporting This Trend David Furlonger Rajesh Kandaswamy Related Resources Webinars “The

Rajesh KandaswamyAnalysts Supporting This Trend David Furlonger Ray Valdes Related Resources Webinars “The Blockchain Scenario:

Related Resources

Webinars

Podcasts

Gartner Peer Connect

Articles

Evidence

1 Gartner’s Blockchain SteerCo is a peer exchange steering committee initiative to facilitate exploration of blockchain technology and business/government use cases, exploitation opportunities and their attendant risks. These meetings, co-managed by a selected panel of global and regional institutions, and facilitated by Gartner, are intended to cover internal and interenterprise cooperative use cases built on blockchain infrastructure. Attendance is by invitation only, to senior executives (CDOs, COOs, CTOs, CIOs heads of blockchain programs and chief innovation officers). The meetings operate under Chatham House rules to protect confidentiality, and enable meaningful peer-level interactions. They are hosted at Gartner client locations around the world.

l Blockchain + WAN Edge = Leading the Digital Transformationt

Blockchain + WAN Edge = Leading the Digital Transformation t Source: Talari Networks WAN to Cloud
Blockchain + WAN Edge = Leading the Digital Transformation t Source: Talari Networks WAN to Cloud
Source: Talari Networks

Source: Talari Networks

WAN to Cloud Digital Transformation Journey

Talari pioneered SD-WAN technologies 10 years ago, and has continued to advance SD-WAN deployments throughout the world. Talari SD-WAN helps lower costs, simplify management, improve reliability, secure applications, elevate performance and support business agility.

Deployment made easy

Deploying the Talari SD-WAN requires little human intervention, as it simplifies management and administration. SD-WAN administration and reporting functions are facilitated from Talari’s centrally managed controller with zero-touch provisioning. Talari physical appliances are configured prior to shipping and virtual appliance images are burned prior to posting. This minimizes the need for technical personnel physically in the branch to install SD-WAN appliances.

Seamless and reliable WAN edge to cloud transformation

Talari utilizes diverse links (e.g., DIA Internet, broadband DSL, LTE, and more), Amazon Web Services (AWS) Direct Connect, and Microsoft Azure ExpressRoute links to ensure the highest level of reliable and instantaneous failover for cloud- connected apps. Talari’s WAN to cloud infrastructure enables “liquid” application flows that are unimpeded when heavy loss and jitter conditions occur, or even link failure.

A secure tunnel using 128b or 256b AES encryption is created across all aggregated WAN paths on-demand, with no requirement to preconfigure anything. As bandwidth policy reservation thresholds are met, or

failures are detected, Talari’s real-time, dynamic tunnel allows traffic to bypass some hops to decrease latency.

Predetermining WAN reliability

The flexibility and agility benefits that Talari dynamic conduits provide are unparalleled, allowing network administrators to match applications to appropriate path characteristics without having to anticipate traffic patterns. For example, duplicate VoIP packets can be placed on the two best performing paths; the best path (e.g. lowest latency, loss, jitter) can always be utilized for Interactive packet streams; all available bandwidth can be used for bulk flows by splitting the packet stream across all paths; and quickly move a packet stream if network degradation is detected. As additional nodes are added, they automatically have secure and reliable conduit-enabled cloud connections with the check of a box. Secure Internet breakouts into the Zscaler cloud services gateway and distributed colocation infrastructure-as-a-service sites are also easily accomplished.

Talari iteratively encapsulates all packet-level performance, routing and bandwidth intelligence, to ensure bandwidth is predictable and data are secure. Talari’s failsafe SD-WAN delivers millisecond, unidirectional packet-level measurement of latency, loss and jitter probabilities for each packet. IT has complete real-time and granular visibility into the network, knowing exactly how the network is performing to proactively manage WAN to cloud services via the Talari Aware analytics platform.

Blockchain + WAN Edge = Leading the Digital Transformationtt l 15

With Talari, QoS is no longer bound to a physical interface speed or conduit. End-to-end QoS and bandwidth reservation are now tied to the logical SD- WAN interface, providing unparalleled quality of user experience, regardless of changing WAN conditions or cloud components.

Businesses can now treat the cloud like any other location on their WAN, which means reliable access to SaaS applications, and AWS and Azure apps are delivered via secure and reliable connections. It also means IT can easily manage and control WAN infrastructure to meet business requirements in a more agile fashion – so moving business-critical applications to the cloud is seamlessly automated – and that cloud and network administrators can play cost arbitrage in terms how to broker high vs low bandwidth-priority flows.

Find out how your company can take advantage of SD-WAN

As your organization moves more workloads to the cloud, aligning technical resources with your organization’s strategies, priorities and goals will be critical. As business-enablers, IT must use the right technologies to reinforce business initiatives, or the cloud won’t deliver its full value.

To learn more, visit www.talari.com .

l Blockchain + WAN Edge = Leading the Digital Transformationt

Blockchain + WAN Edge = Leading the Digital Transformation t Source: Talari Networks White Paper: Eight
Blockchain + WAN Edge = Leading the Digital Transformation t Source: Talari Networks White Paper: Eight
Source: Talari Networks

Source: Talari Networks

White Paper: Eight Questions You Must Ask When Considering an SD-WAN

Increase Network Agility and Lower Costs With a Flexible Software Defined WAN

and Lower Costs With a Flexible Software Defined WAN Anywhere, Anytime Access is Constrained by the

Anywhere, Anytime Access is Constrained by the WAN

Workers want access to their critical information anywhere, anytime and from any device.

This expectation is driving significant changes in how and where enterprise applications are consumed, including the embrace of cloud services and enterprise mobile applications.

As the nature and location of enterprise application usage changes rapidly, it is putting tremendous pressure on the enterprise WAN. Instead of primarily dealing with client-server computing to and from one or two data centers, more and more traffic comes in from the cloud and mobile devices. In addition, businesses are rapidly adopting voice and video, both latency-sensitive, real-time applications, which place additional demands on the WAN.

At the same time, IT budgets are not growing as fast as the demand for additional WAN bandwidth. As next-generation, bandwidth-hungry applications put significant strain on the traditional, legacy WAN—comprised of technologies that are two decades old—IT managers are looking for modern alternatives.

NetworkWorld contributor Zeus Kerravala calls overhauling the WAN nothing short of a business imperative. “Cloud and mobile computing create entirely different traffic patterns than legacy computing models,” he writes. “Also, business agility is a top priority for company leaders, and that drives the need for IT agility and, more specifically, network agility.”

Other experts agree. “Leading IT service trends, such as on-demand IT service delivery, server and storage virtualization, an increasing remote and mobile workforce and Software-as-a-Service (SaaS) are stressing the current network operations model,” declares the Open Networking User Group (ONUG) in its landmark position paper. “As a result of vendor lock-in, today’s networks are costly, inflexible, proprietary, and poorly aligned with IT operations. In short, networking has become the weakest link in the service chain of application delivery, limiting IT’s ability to respond directly to business imperatives.”

As ONUG’s white paper describes well, enterprise WANs have become increasingly complex and costly to manage and maintain, while at the same time, businesses require 24 x 7 network uptime. Yet, all too often, enterprises experience high costs, coupled with low control over and visibility into the WAN, as well as delays and additional costs in provisioning remote sites.

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+ WAN Edge = Leading the Digital Transformation tt l 17 So, what’s next for the

So, what’s next for the enterprise WAN?

Defining the Software Defined WAN

A

new type of networking solution has emerged

to

address businesses’ evolving needs: the

Software Defined WAN (SD-WAN). SD-WAN technology can be seen as an extension of software defined networking (SDN). Similar to SDN, SD- WAN decouples the network configuration from individual wide area networks, links and hardware components. Instead, an SD-WAN uses software and virtual network overlays to take advantage of

available WAN connections while centralizing control

of and visibility into the entire WAN fabric. SD-WANs

enable greater network capacity, lower costs and more flexible management.

SD-WAN offerings can vary dramatically from vendor

to vendor, but they have a few things in common:

Abstraction of the WAN overlay from any single service provider’s WAN

Leverage of Internet links, with resulting Internet economics and bandwidth scalability

Active use of all available network links and the elimination of unused standby connections

Centralized policy control for WAN traffic flow classification, prioritization and quality of service (QoS)

Centralized visibility into and monitoring of the WAN

Driven by the cost and complexity of existing enterprise WANs and changes in application and cloud usage, experts predict the SD-WAN market will reach $1.5 billion by 2020.*

Six Business Benefits of an SD-WAN

Organizations can reap substantial business benefits from an SD-WAN. An SD-WAN delivers:

1. Far greater WAN bandwidth

Broadband Internet costs less than MPLS at private corporate data centers, and it is especially cost- effective at branch offices and at carrier-neutral colocation facilities. With an SD-WAN solution, businesses can afford far more WAN bandwidth

solution, businesses can afford far more WAN bandwidth *“SDWAN Forecast and Opportunity: How They Will Disrupt

*“SDWAN Forecast and Opportunity: How They Will Disrupt the Router Market,” https://www.gartner.com/webinar/3478918

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+ WAN Edge = Leading the Digital Transformation t 18 than they could with an all-MPLS

than they could with an all-MPLS approach. SD- WAN solutions that support aggregation of disparate links enable much more bandwidth per enterprise location, especially at locations not connected via fiber links.

2. Lower WAN costs

Broadband Internet costs are a fraction of MPLS costs. Per Mbps pricing of MPLS can run up to 100 times the price of Internet bandwidth, especially in remote or rural locations. With an SD-WAN, businesses can lower their operating costs by relying less on more expensive private links and leveraging more inexpensive public connections. With the proper SD-WAN solution, spending on MPLS can be capped and if desired, eventually eliminated altogether, for maximum cost savings, even as bandwidth is greatly increased to meet the demands of modern application usage. Businesses can use all the bandwidth they’re paying for and delay the need to increase spend from current levels.

3. Greater network agility

With SD-WAN technology, businesses are no longer limited to the speed of old-school telecom service providers. Enterprises can leverage new technologies, such as LTE or FiOS, as they become available—even if they are only available at some enterprise locations. And, where it can take weeks or months to add new locations to an MPLS network, with an SD-WAN solution, businesses can add new locations in a day—sometimes even in minutes. With SD-WAN, IT has the freedom to adapt the network as rapidly as the business demands.

4. High-performance access to SaaS and the cloud

Properly designed and implemented SD-WAN solutions allow enterprises to leverage cloud computing and Software-as-a-Service (SaaS) in an incremental, secure and reliable way. With the appropriate SD-WAN solution, network managers

can prepare and enable their networks for the move to private, hybrid or public cloud—at whatever pace the computing side of IT wants to go—without sacrificing the network reliability and network security.

5. A superior experience for unified communications, videoconferencing and other demanding applications

By providing reliable access to cloud applications and offering far more bandwidth in an affordable manner, SD-WANs enable some applications that were simply not practical over a limited- bandwidth private WAN. SD-WAN solutions that deliver reliability and application performance predictability enable the cost-effective deployment of videoconferencing, unified communications and desktop virtualization that are very sensitive to latency or packet loss and are difficult to deploy and support over a global WAN.

6. Lower troubleshooting and ongoing network management costs

With an SD-WAN, IT managers spend less time troubleshooting the external WAN—where they have historically had the least visibility and control. Instead, IT managers have greater visibility into network issues and can more easily track down the specific cause of problems after they occur. But more importantly, an SD-WAN mitigates problems in real time even before users notice, virtually eliminating calls to the helpdesk about network performance problems and outages. IT managers can spend more of their precious time on proactive projects, rather than fixing problems and dealing with unhappy users.

With the right SD-WAN solution, the WAN is more fault tolerant and impervious to a variety of problems, including errors that might be introduced by the IT team itself, such as software upgrades or the need to take connections down for

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maintenance. By eliminating single points of failure from even temporarily taking out the network and causing applications to fail, SD-WAN can enhance network uptime and application performance predictability.

Eight Considerations for Choosing the Right SD-WAN Solution

Not all SD-WAN solutions are created equal. Here are eight key considerations when evaluating SD- WAN solutions.

1. Deliver at least MPLS-level reliability and application performance predictability

If businesses are going to move successfully from purely MPLS private WANs to SD-WANs, then delivering the reliability and predictability of application performance that expensive, over-engineered single- vendor networks like MPLS offer is essential.

Questions to ask:

Does the SD-WAN solution offer sub- second response to network problems— not just link failures but even network brownouts, or periods of high packet loss and excessive jitter?

Are end-user connections (TCP flows) terminated when traffic has to be moved from one link to another, or are the sessions maintained?

Can 4-nines (99.99 percent) reliability and performance predictability be delivered if only Internet connections are used?

2. Dynamic support of multiple active links

The question is not if two links can be used, but how many links and whether they can all be used whenever they are available, as opposed to having certain traffic types limited to certain links in the absence of a connection failure.

Questions to ask:

Are more than two links per location supported? How many links?

Can a single flow be striped across multiple disparate links, allowing all available bandwidth to be used even for just a single active large transfer? Is each flow limited to a single connection?

Can all links be used whenever they are working, or are certain traffic types designated for certain connections in the absence of a network event for that connection?

3. Efficient use of each WAN link, both inbound and outbound

When leveraging high-bandwidth Internet connections, with traffic coming in from multiple enterprise locations as well as from the Internet and the cloud, the ability to efficiently use available bandwidth while still delivering predictable application performance is key. Historical recommendations have been not to run an inbound link at more than 30 percent to 40 percent sustained utilization if predictable performance is important. But with a well-designed SD-WAN that supports traffic prioritization and QoS, businesses can increase the utilization rate of their WAN and reduce over-provisioning and wasteful spending.

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“We had light-bulb thinking about Talari’s return on investment. For many of our WAN connections where we had redundancy, we were paying for bandwidth we weren’t using. Our backup links were costing money, but we were largely leaving them unused unless there was an outage.”

Questions to ask:

At what percentage utilization can links with traffic inbound from multiple locations be sustained while still delivering predictable application performance?

If the answer is greater than 40 percent, how is this done? Can it be demonstrated?

Can business priorities and policies be enforced to ensure critical application traffic always has an adequate share of network resources?

4. Support for real-time apps in real time

As UC, including UC hosted in the cloud, and videoconferencing become everyday business tools, the ability to handle real-time applications will be a crucial component of an SD-WAN solution.

Questions to ask:

Can the SD-WAN solution deliver 4-nines reliability for real-time applications, even if private MPLS bandwidth alone is insufficient?

Can real-time application quality be maintained with an all-Internet WAN?

How is this done?

with an all-Internet WAN? ✓ How is this done? David Rahbany Director of IT Infrastructure The

David Rahbany Director of IT Infrastructure The Hain Celestial Group

“We projected that if we were going to increase bandwidth at our sites to 20Mbps using MPLS, we would spend an additional $1 million over three years. We have seen a 3:1 return on our investment with Talari.”

Dave Badgley Senior Systems Engineer Dayton Superior

5. Secure and reliable access to cloud services

and SaaS

In this age of the cloud, creating secure, reliable access to applications running outside the business’ premise is critical. Whether accessing storage and compute resources from an Infrastructure- as-a-Service (IaaS) provider or using any SaaS application, no business can run effectively without ensuring that connections to the cloud are as reliable as connections between offices.

Questions to ask:

How is performance and reliability for SaaS and public cloud services traffic assured?

Can we maintain our existing centralized security model, or does the SD-WAN solution require a migration to a decentralized security approach?

6. Non-disruptive augmentation of existing

enterprise WAN

Very few WANs are designed from scratch. Some businesses might be able to drop their existing WAN and switch completely to, say, a cloud-based

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SD-WAN, but for most enterprises, this is simply not a practical option. A seamless, pain-free integration and migration is desired.

Questions to ask:

Does the solution work with our existing MPLS WAN? Does all of the functionality work across the MPLS connections, or is it just a subset of that offered over Internet connections?

Can the solution aggregate MPLS and Internet connections so a single session can simultaneously use both forms of network?

Does the solution work with our existing WAN optimization appliances?

7. Ease of use and ongoing manageability

SD-WAN solutions should be easy to deploy, make day- to-day management and maintenance easier and less crisis-driven. IT should be able to easily add locations and network connections as the business needs.

Questions to ask:

Does the SD-WAN solution offer extensive network-level and application- level visibility and reporting?

Does the approach not only report on, but also mitigate network problems in real time?

How easy is it to add a new location to an existing WAN?

Can changes be made during business hours without disrupting network operations?

8. Ability to scale

It’s one thing for an SD-WAN solution to work in a few locations, but scaling is quite another matter.

Questions to ask:

How large an SD-WAN network can be built? How many locations? How many WAN links?

What are the vendor’s largest actual deployments?

Can we talk to other customers with a deployment the same size?

How a Talari Software Defined WAN is Different

Talari’s patented Software Defined WAN is used by enterprises large and small across many industries and geographic locations. Talari’s patented technology makes the network intelligent so it can think for itself and deliver 4-nines reliability even when using only multiple “imperfect” Internet links. Talari delivers a superior, no-compromises SD-WAN that is easy to integrate into existing WAN designs.

Better-than-MPLS reliability and application performance predictability

Talari’s Software Defined WAN solution was designed from the ground up with reliability and application performance predictability in mind. Talari’s intelligence begins with continuous, unidirectional measurement of the performance— loss, latency, jitter and bandwidth utilization—of every packet on every connection between any two locations. All packets are measured individually, rather than basing measurement on the occasional round-trip ping or “weather maps” that describe what happened nearby at some previous times, allowing Talari to know what’s happening right now on the network.

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Continuous measurement and real-time knowledge enable automatic sub-second reaction to network problems, including congestion-based loss and latency increases, not just connection failures. Talari mitigates the impact of packet loss, making the WAN look to all TCP applications like a zero-loss network with occasional bouts of jitter. This is especially helpful for Microsoft file services, which can perform poorly on the WAN in the face of packet loss. This real-time knowledge, coupled with sub-second reaction, allows Talari to deliver better-than-MPLS reliability.

Efficient use of each WAN link—inbound as well as outbound

Talari allows WAN links to run very “hot” without negatively impacting performance predictability (i.e. causing packet loss or excessive last-mile delay). Almost any solution that supports QoS can do this with outbound traffic, but Talari can do this with inbound traffic as well. When sharing an inbound WAN link with traffic direct from public Internet locations, Talari can run the link at more than 90 percent utilization—sustained indefinitely. If the only locations being communicated with also have Talari, sustained utilization can exceed 97 percent. This allows enterprises to safely use all of the capacity of their network connections, allowing them to delay bandwidth upgrades for longer.

Unmatched support for real-time applications

In addition to the sub-second reaction and loss- mitigation functionality, a Talari SD-WAN can optionally replicate packets across two different paths—suppressing the duplicates at the other end—to deliver “platinum-quality” voice, video (or even latency-sensitive VDI) performance. Talari can be configured by policy per application to always replicate packets or only when sufficient bandwidth is available.

“Our biggest benefit from Talari is a more reliable network and the ability to deliver 100% uptime.”

Andrew Longsworth Lead Network Engineer Driscoll’s

Reliable and secure access to cloud services and SaaS

Talari offers two approaches to supporting SaaS and public cloud services to enable the same reliable, predictable access to those services that enterprise users have come to expect from applications deployed at private data centers. With a virtual cloud gateway located at the edge of the cloud, Talari extends the reach of the corporate WAN into the cloud, making it possible to control, manage and have visibility into the connection to the cloud. Talari also can be used to add locations to an organization’s WAN at carrier-neutral colocation facilities. This allows enterprises to centralize the complexity in the network at locations where diverse bandwidth is cheap and plentiful and that provide excellent connectivity to the core of the Internet, and thus to public cloud services and SaaS applications. Backhauling Internet traffic to colo facilities, where an enterprise’s security technology of choice is also deployed, rather than to private data centers, now makes tremendous sense, because it allows the preservation of the business’ existing security model and technology.

Non-disruptive augmentation of the existing enterprise WAN

Talari’s SD-WAN solution can be deployed seamlessly, augmenting existing MPLS networks and WAN optimization gear. Talari enables incremental, at-your-own-pace evolution of the WAN, rather than requiring periodic forklift upgrades. Older WAN connections like MPLS don’t need to be ripped out and replaced all at once, but instead can be augmented with inexpensive Internet links. Replacing the more expensive links can be done as contracts expire and all stakeholders are comfortable with the performance and reliability of the Talari SD-WAN.

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A Talari WAN allows for easy, cost-effective

bandwidth scalability. Almost as importantly, bandwidth additions now can be incremental and completed in days, rather than the weeks or months it can take to get an additional MPLS circuit deployed, or the months and years it can take to get fiber to some locations.

Superior scalability

Talari’s Software Defined WAN can support up to

eight WAN links per location, not just the two links that most competing solutions allow. This density is particularly important for locations where fiber

is not available and multiple ADSL links must be

aggregated to obtain sufficient bandwidth. Talari allows a single flow to take advantage of all of the bandwidth across even completely disparate links between locations, resulting in much faster transfers of large files. Talari’s solution is field-proven to support very large networks, with more than 200 locations communicating directly with each other, while using three or more links at each location.

other, while using three or more links at each location. “Adding Talari immediately slowed the number

“Adding Talari immediately slowed the number of user complaints we were receiving. We haven’t experienced any downtime since deploying Talari.”

Andrea Martfeld, Vice President and Information Technology Officer Lake Area Bank and Roundbank

Make Yours a Talari WAN

The demand for anywhere, anytime access to business information and applications is driving the need for a modern WAN—one that is more agile, more efficient and lower cost than simply deploying more MPLS everywhere.

A Software Defined WAN solution from Talari is the

answer. Talari provides better-than-MPLS reliability, while offering enterprises maximum agility and the ability to take advantage of Internet economics.

A Talari WAN provides a smooth, scalable path

that enables IT managers to safely and reliably support bandwidth-intensive and latency-sensitive next-generation applications, SaaS, and public and hybrid cloud computing, without increasing WAN budgets. IT managers can deploy a WAN in an incremental, non-disruptive fashion to augment and/

or eventually replace their legacy MPLS WAN. Talari

is complementary to existing WAN optimization

products, ensuring smooth coexistence. With Talari, businesses gain a network that thinks for itself, allowing IT to focus on strategic projects to support the business, rather than the details of managing the WAN and troubleshooting application performance issues.

Learn More

Learn how to meet the demands of today’s demanding applications and lower costs with Talari’s intelligent, flexible SD-WAN at www.talari.com.

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Blockchain + WAN Edge = Leading the Digital Transformation t About Talari Networks • RESILIENCY: Gain
Blockchain + WAN Edge = Leading the Digital Transformation t About Talari Networks • RESILIENCY: Gain

About Talari Networks

RESILIENCY: Gain Global Enterprise-Class Reliability and Superior QoS

AGILITY: Accelerate Predictable Application Performance

OPTIMIZATION: Create Cost Arbitrage of Cloud/Edge Connectivity

Create Cost Arbitrage of Cloud/Edge Connectivity Talari is the original innovator of SD-WAN (Software-Defined

Talari is the original innovator of SD-WAN (Software-Defined WAN) technology, helping multi-site organizations transform their remote and branch-office networks by intelligently allocating more bandwidth at less cost, while delivering superior QoS for greater business continuity, operational agility and application control. Talari provides a ‘failsafe’ SD-WAN solution offering dynamic capacity, improved reliability and greater quality of experience. Our patented hardware and virtual solutions have proven so effective at delivering optimal WAN-path determination that Talari is uniquely trusted to broker real-time, VoIP traffic in large metro 911-emergency contact centers. Talari provides the most resilient and responsive edge network, delivering stable and redundant packet-level performance across hybrid-cloud IT infrastructures, regardless of the underlying transport technology or application architecture. Talari is deployed in over 400 organizations in 40 different countries with more than 9,000 aggregated SD-WAN sites.

To learn more about our customer stories and case studies, Visit us at https://www.talari.com/sd-wan-resources/case- studies/

Request a custom demo to learn how Talari can help you!