The SD-WAN market currently accounts for 5% of the total market but it will rival MPLS in the coming years.
Local loops connecting customer sites to direct internet access (DIA) are worth US$3.8 billion in TeleGeography’s model and represents 6% of the market.
MPLS, meanwhile, is worth US$17 billion and maintains 29% of the global WAN market. Together, MPLS and access loops connecting to MPLS PoPs accounts for 60% of the market for large multinational enterprise WANs.
MPLS and DIA port charges remain the largest contributor at US33.6 billion, followed by local access charges at US22.1 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 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.”
Currently, MPLS exceeds SD-WAN but a considerable shift is expected in the next few years as businesses demand better flexibility, reliability and cloud access, Bryan adds.
“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 added.
