Hello David
The example in the video as well as the examples you see from other sources, are simply indicating that you can have an SD-WAN deployment with one option completely outside of the SD-WAN fabric. This is your breakout option. The fabric will include at least one, but typically multiple, connections. You can see similar diagrams in this Cisco white paper on SD-WAN Cloud OnRamp for SaaS. There, you can see the connection via the link outside of the fabric, and an additional two links (ISP2 and MPLS) within the fabric. I believe that this approach simply shows the use of a link outside the SD-WAN fabric as an alternative.
Yes, that is correct. You can deploy a vEdge (or cEdge) router inside your cloud IaaS environment (like AWS, Azure, or GCP).
Compared to SaaS, IaaS offers much more control and flexibility. With SaaS, the provider controls everything — you can only optimize how you reach it. But with IaaS, you control the infrastructure and that opens up a lot more benefits.
SaaS is passive so you only optimize the entry point. IaaS is active, so it’s part of your SD-WAN fabric. You control both ends of the connection. That means that you can enforce policies and you can build a true hybrid or multi-cloud WAN.
I hope this has been helpful!
Laz