The report shows that MPLS and Local Access still dominate WAN spending, accounting for over 80% of the total market share in 2020.
TeleGeography, a global telecommunications market research and consulting firm, has released its WAN Market Size Report based on the wide-area networking spend of the Global 5000 database of the world’s largest companies by revenue.
The report found the global value of the WAN market was $75.9 billion in 2020. It notes that, while new software-defined WAN (SD-WAN) services are gaining traction, enterprise spend is still dominated by MPLS and Local Access services.
MPLS spend in 2020 was approximate $32.6 billion—42.96% of the WAN market—with SD-WAN accounting for only $1.6 billion or 2.15% of the market.
Local Access followed MPLS with $28.9 billion in total spend or 38.19% of the market and Direct Internet Access (DIA) accounted for $12.4 billion or 16.33% of the market. Broadband contribution to WAN spend was only $279 million or 0.37% of the market, which is largely due to its low-cost pricing.
“As the migration from MPLS to SD-WAN continues, we expect the global WAN market to achieve greater balance in the coming years. Despite the hype around SD-WAN, MPLS is still a force in the WAN market and it will continue to be a preferred option for many enterprises. Our expectation is that as MPLS spend declines, broadband, DIA and SD-WAN will increase market share. SD-WAN uptake is still toward the end of the early adopter cycle,” said TeleGeography Analyst Elizabeth Thorne. “The WAN Market Size Report enables enterprises and telecom operators to understand the state of play in the market and identify opportunities to invest in and transform their network services.”
The report outlined that the U.S. and Canada account for 15% of global revenue, even though it is home to only approximately 4.5% of the global population.
The market size model featured in the report is based on data from TeleGeography’s WAN Manager Survey, as well as WAN pricing reports that inform its WAN Cost Benchmark service. The WAN market size model presents individual market sizes for key elements of the corporate network categorized by geography and product segment.
“Our report research relies on real metrics and data, not analyst opinion. Through this data we have been able to identify key WAN trends such as a move toward cloud computing, migration of the data centre away from corporate premises and the predicted growth of SD-WAN,” said TeleGeography Senior Manager Greg Bryan. “Our data sets have been maintained and analyzed by our team for decades. Our mission is to continue to supply new data insights to provide shared knowledge to service providers, enterprises, equipment makers, investors, and governments.”
TeleGeography is recognized as the definitive source for telecom news, numbers, and analysis. It launched its WAN Geography Benchmark tool earlier this year to allow users to optimize cloud network architecture through customized ranking.
The report identifies trends by region and separates local access connected to MPLS or DIA. Learn more about accessing the report here.