Global telecommunications market research and consulting firm TeleGeography estimates the global SD-WAN market for large multinational enterprises is worth US$3 billion. However, this only accounts for just 5% of the total market. Local loops connecting customer sites to direct internet access (DIA) account for 6% of the market and are valued at $3.8 billion.
Meanwhile, MPLS is worth US$17 billion and maintains 29% of the global WAN market.
Together, MPLS and access loops connecting to MPLS PoPs account for 60% of the market for large multinational enterprise WANs. The combined MPLS and DIA port charges remain the largest contributor at US$33.6 billion, followed by local access charges at US$22.1 billion.
“SD-WAN adoption is ramping up globally, but MPLS still remains the dominant networking technology. It’s interesting to note that the DIA market share is larger than SD-WAN. The market for internet underlay services is slightly larger than the overlay,” said TeleGeography senior manager Greg Bryan.
“Overall, the WAN market has diversified and, across geographies, the pricing differences within product sets vary considerably.”Greg Bryan
He cited the example of the US market as having comparatively more expensive local access and broadband charges.
Driving networking market
TeleGeography attributes the market diversification and disruption to how multinational corporations design and source their networks to cloud computing, the migration of the data centre away from corporate premises, local internet breakouts, and the introduction of SD-WAN.
Bryan believes that despite MPLS currently exceeding SD-WAN in market size, the researcher expects “a considerable shift” in the next few years as businesses demand better flexibility, reliability, and cloud access.
“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,” he concluded.