The global SD-WAN market for large MNCs is valued at $3 billion and accounts for just 5% of the total market, as per TeleGeography’s latest WAN Market Size Report. TeleGeography is the world’s largest telecommunications market research and consulting firm.
The local loops that connect customer sites to direct internet access (DIA) are worth $3.8 billion or 6% of the market in TeleGeography’s model.
Meanwhile, MPLS is valued at $17 billion and holds a 29% share of the global WAN market. MPLS and access loops connecting through MPLS PoPs together account for 60% of the total market for large multinational enterprise WANs. Overall, MPLS and DIA port fees are the largest contributors at $33.6 billion, followed by local access fees at $22.1 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 TeleGeography Senior Manager Greg Bryan. “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.”
TeleGeography attributes the diversification and disruption in the market to how MNCs design and source networks to cloud computing, the data center migration from corporate premises, local internet breakouts, and SD-WAN introduction.
“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 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.”
This latest research uses a data-driven model to provide a comprehensive view of the market opportunity for foundation networks or corporate WANs. Using insights from TeleGeography’s WAN Manager Survey and WAN Cost Benchmark customers, the team used total number of global corporate WAN sites and price ranges of the market as key variables, geographic distribution of network sites, bandwidths, mix of connectivity products, distance to the local loop, and SD-WAN rollouts.