The managed SD-WAN services market is expected to generate more than $282 million in revenue in the U.S. by the close of 2018, according to researcher Vertical Systems Group. The figure is based on billable U.S. customer sites and WAN access connections installed and under management.
Providers currently selling managed SD-WAN services in the U.S. include: Aryaka, AT&T, CenturyLink, Cogent, Comcast, Fusion Connect, GTT, Hughes, Masergy, MetTel, Sprint, Verizon, Windstream and Zayo by Vertical’s count. Other network operators both domestic and foreign are expected to enter the U.S. market, which will grow the segment's size, Vertical said.
The engagement opportunities are there for network operators. While the managed SD-WAN services market in the U.S. is small, it began to pick up steam in the last half of 2018, said Rick Malone, a Vertical principal and co-founder. “Carrier-grade managed SD-WAN services in the U.S. began to generate notable revenue in the second half of 2018,” he said.
One main reason the market’s revenue is small is because money is new to it. However, SD-WAN has proved to be more complex than customers previously believed. “Prior to this, most providers supported customers with pilot SD-WAN services that were not substantively monetized,” Malone said. “A key driver for managed services is the growing appreciation that migration to SD-WAN is considerably more complex than the promise of ‘easily deployed’ plug-and-play DIY solutions.”
SD-WAN Market Growth: 2019
As a result, in 2019, the segment should see a major kick up in sales as network operators ramp up to sell SD-WAN services, he said.
Meanwhile, Vertical has launched a new research service covering the carrier-based managed SD-WAN services market, focusing on service migration, network connectivity and market sizing. The research content it offers at this time spans managed SD-WAN purchase drivers, customers, WAN access connections, site configuration profiles, pricing and revenue.
At this point, SD-WAN research is a “moving target,” said Erin Dunne, Vertical’s research services director, in a video. “First of all the issue is definition. There’s no true definition out there. We pride ourselves on being able to lay out definitions that are from a market perspective -- what service providers are selling and what enterprise, or business customers, are buying or what they want to buy.”
According to Vertical, managed SD-WAN services are a carrier-grade network offering for enterprise and business customers, managed by a network operator, and delivered over a software defined network service architecture that has separate control and data planes. Not included in this analysis are do-it-yourself SD-WAN solutions purchased directly from an SD-WAN technology supplier or a systems integrator.