AT&T, Hughes and Verizon have secured the top three slots in Vertical Systems Group's 2019 US Carrier Managed SD-WAN Services Leaderboard.
The seven service providers on the leaderboard AT&T, Hughes, Verizon, CenturyLink, Windstream, Aryaka and Comcast each have 2% or more of installed and billable carrier-managed SD-WAN customer sites in the US as of the end of last year.
Overall, 2019 was a banner year for SD-WAN deployments. VSG reports that billable US installations of carrier-managed SD-WAN Services increased 89% last year as large enterprises are increasingly looking to service providers for deployment and management of their SD-WAN services. SD-WAN revenue grew 90% to reach $2 billion in 2019, up from $1.1 billion in 2018, according to Omdia.
The second-place ranking of broadband satellite service provider Hughes may come as a surprise to some. But the operator supports many large enterprises with numerous sites, such as gas stations, grocery stores and restaurants. Hughes' average large enterprise customer has about 900 sites, explains Dan Rasmussen, SVP for Hughes Enterprise, in an email to Light Reading.
"[Hughes] started moving from a wireless to a wireline provider and offering broadband when they convert one contract, you're talking thousands and thousands of sites. They're very good at carrier-managed services," says Erin Dunne, director of research services for Vertical Systems Group.
Aryaka's placement in sixth on the leaderboard may also turn heads as some consider the company to be a vendor, but Aryaka's private network grants them service provider status, says Dunne.
Comcast moved up the ladder since the 2018 SD-WAN Leaderboard and ranks in seventh place this year, up from eighth place in 2018. Dunne says the cable provider historically moved quickly in the Ethernet market as well; plus, Comcast is the only service provider on the US Leaderboard that has attained MEF 3.0 SD-WAN Services certification, thereby meeting compliance with the MEF 70 global standard for SD-WAN managed services.
"If history serves and if they do the same with SD-WAN [as with Ethernet], that MEF certification will be very valuable to [Comcast]," says Dunne.
CenturyLink also bumped up rank to the fourth position on the Leaderboard, pushing Windstream down from fourth to fifth. Fusion dropped off the Leaderboard into the Challenge Tier for 2019; Bigleaf and Sprint fell from the 2018 Challenge Tier to the 2019 Market Player tier.
This is the second SD-WAN leaderboard released by VSG; ranking is based on the number of carrier-managed SD-WAN sites a service provider can claim as installed or billable for 2019. The ranking does not factor in DIY deployments or SD-WAN cloud providers, says Dunne. In addition, VSG ranks by site number because it's the "most concrete and tangible way" to define market share for SD-WAN carrier-managed services, according to Dunne.
Vertical Systems Group defines a carrier-managed SD-WAN Service as a "carrier-grade offering for business customers that is managed by a network operator, utilizes an SDN architecture, enables dynamic customer edge site connectivity, and provides centralized network control and visibility end-to-end."
The SD-WAN runner-ups
VSG also categorizes the runner-up service providers into the Challenge Tier managed service providers with a 1% to 2% share of US carrier-managed SD-WAN sites. The Market Players tier includes providers with site shares below 1%, including global network providers that manage US customer sites.
Fusion, GTT, Masergy, Meriplex and TPx placed in the 2019 Challenge Tier. The following companies (in alphabetical order) ranked in the Market Players category for 2019: AireSpring, Bigleaf, BT, CBTS, Cincinnati Bell, Cogent, Colt, Consolidated Communications, Cox, DQE Communications, FirstLight, Frontier, Intelsat, MetTel, Neutrona, NTT, Orange Business, PCCW Global, PS Lightwave, RCN Business, SES, SDN Communications, Segra, SingTel, Spectrum Enterprise, Sprint, Syringa, T-Systems, Tata, Telefonica, Telia Carrier, Veracity Networks, Virgin Media Business, Vodafone, Zayo and others.
The five most popular SD-WAN technologies utilized by managed service providers in the Leaderboard and Challenge Tier (ranked in order of the number of relationships they have with service providers) include VMware by VeloCloud, Cisco vEdge (Viptela), Cisco Meraki MX, Fortinet and Versa. Several SD-WAN providers also utilize their own internally developed technologies. Versa is the only one of these suppliers with MEF 3.0 SD-WAN Technology certification.
Impact of COVID-19 and security concerns on SD-WAN
The SD-WAN market will surely be impacted by COVID-19, and Dunne says VSG will be closely watching those developments. Hughes' Rasmussen says COVID-19 has already impacted many of its customers as restaurants are shifting to online orders and delivery/takeout platforms, which are placing a strain on restaurants' networks. Grocery stores are also changing their inventory and management systems to support more online orders and curbside pickup.
"These type of business changes are great examples of the benefit of SD-WAN since the networks are better at protecting the mission-critical traffic even as the load has increased and the identification of the mission-critical traffic has changed," explains Rasmussen. "A statically defined network would require a lot more rushed reconfiguration work to maintain the same performance as our SD-WAN enabled networks."
In addition, security is a complex issue in the SD-WAN market and Dunne says this topic continues to be front-of-mind for both service providers and SD-WAN customers this year. Security vendors are also coming into the SD-WAN game security supplier Fortinet has had a successful entry into the SD-WAN space, says Dunne. In addition, Palo Alto recently announced plans to acquire SD-WAN supplier CloudGenix for $420 million this year.
Enterprise customers are also looking for ways to improve security in their SD-WANs. "Several customers are looking to bolster edge security, integrating cloud-based security services and Zero Trust architectures in addition to next-gen firewalls and unified threat management security capabilities at each edge location," says Rasmussen. He adds that conversations with customers have shifted beyond the configuration and implementation of SD-WANs to focusing more on analytics and reporting of network performance so customers can glean more business analytics.
- Enterprises want improved application performance, less complexity in SD-WANs report
- Masergy bolsters SD-WAN security with user-based analytics
- Comcast, Telia among MEF's SD-WAN certified service providers
— Kelsey Kusterer Ziser, Senior Editor, Light Reading