Study: SD-WAN Is a Global $3 Bn Market for Multinational Enterprises

TeleGeography

According to a study conducted by market research and consultancy firm TeleGeography, the worldwide SD-WAN market for big, multinational companies is worth $3 billion. This represents just 5 percent of the whole market, stated TeleGeography in its most recent WAN Market Size Report.

Despite accelerating MPLS to SD-WAN migration, MPLS would still dominate global enterprise networking.

Greg Bryan, Senior Manager at TeleGeography
“Currently, MPLS exceeds SD-WAN, although we expect a considerable shift in the next few years as businesses demand better flexibility, reliability, and cloud access,” said Greg Bryan, Senior Manager at TeleGeography.

Local loops connecting customer sites to Direct Internet Access (DIA) are worth $3.8 billion in TeleGeography’s model – or 6 percent of the market.

Meanwhile, MPLS is worth $17 billion and maintains 29 percent of the global WAN market. For big, global company WANs, MPLS and access loops connected to MPLS PoPs would account for 60 percent of the market. Local access charges come in second place overall with $22.1 billion, after MPLS and DIA port charges with $33.6 billion.

“SD-WAN adoption is ramping up globally, but MPLS still remains the dominant networking technology. It’s interesting to note that DIA market share is larger than SD-WAN. The market for internet underlay services is slightly larger than overlay,” said Greg Bryan, Senior Manager at TeleGeography. “Overall, the WAN market has diversified and, across geographies, the pricing differences within product sets vary considerably. For example, compared to other well-developed countries, the U.S. is a more expensive local access and broadband market.”

MPLS vs. SD-WAN

The market disruption and diversity, according to the research agency, are due to changes in how multinational organizations plan and procure their networks due to cloud computing, the relocation of data centers from on-site facilities, local internet breakouts, and the advent of SD-WAN.

“Currently, MPLS exceeds SD-WAN, although we expect a considerable shift in the next few years as businesses demand better flexibility, reliability, and cloud access,” added Greg Bryan. “Moving forward, reliance on MPLS and private access from customer sites to MPLS PoPs will lessen, and we predict that this is likely to have a material impact on the business of selling corporate networks.

In order to give a detailed analysis of the market opportunity for the underlay network or corporate WAN, this new research employs a data-driven methodology. The team used the total number of global corporate WAN sites and market price ranges as key variables, along with static assumptions about the geographic distribution of network sites, mix of connectivity products, bandwidths, distance of local loops, and SD-WAN rollouts. The team used insight from TeleGeography’s WAN Manager Survey and WAN Cost Benchmark customers.