The goals for benchmarking enterprise-wide area network (WAN) costs nearly a decade ago were simple. Customers wanted to ensure that their carrier – often a single global telco – had lowered MPLS prices in step with the market over the life of their multi-year contract.

But wide area networks have changed.

Today, large enterprise WANs include multiple underlay technologies from several vendors. SD-WAN adoption is surging. Cloud apps and services from Infrastructure as a Service (IaaS), Software as a Service (SaaS), and Unified Communications as a Service (UCaaS) are fast becoming the new normal.

More data centers are being migrated off-premises and into the cloud. TeleGeography's 2019 WAN Manager Survey of 64 large multinational enterprises found that – while about one in ten still had all their data centers on-premises – nearly one in five had already moved off-campus.

Its latest WAN Manager Survey even found that MPLS usage across enterprises dropped by 24% between 2018 and 2020. SD-WAN saw a 25% growth in the same period.

When you add it all up, does this mean that the Internet is the new WAN?

It kind of looks that way, doesn't it?

The service provider challenge: Understanding the enterprise's dilemma

To understand the reshaping of the WAN, network service providers must first analyze why enterprises are adopting SD-WAN at all.

The top two reasons cited among TeleGeography's survey participants were the need to boost site capacity and select alternative products for the underlay. And there's similarly no doubt that the difference in price between MPLS and Internet alternatives contributes to enterprises' desire to increase capacity and use alternate products.

Something that's also worth considering? Everything WAN managers must now themselves consider in this more complex post-MPLS landscape.

WAN managers must now appraise the geographic footprints of their cloud service providers (CSPs), not just their own data center sites. Next, they must select data center locations from literally thousands of sites operated by hundreds of different providers. Data centers differ not just in costs for power, cross-connects and rack space, but by CSP on-ramps, network provider presence, and the ability to reach exchanges or fabric providers.

This brings me to the last novel concern. WAN managers must think about what happens to their traffic once it leaves their office over a best-efforts Internet connection. Performance on the "Internet middle mile," once the network service provider's (NSP) problem in the MPLS network, is now a concern for the enterprise.

These new considerations might well offer an opportunity for NSPs.

Enterprises directly sourcing several transport products from dozens of NSPs, to connect to several CSPs would have to act like mini-telcos. If NSPs align their offerings to match the cost and performance concerns pushing enterprises in this direction, they can save enterprise IT infrastructure teams from many headaches, not to mention overhead.

New WAN landscape; new vendor strategies

On top of these access sourcing options, an Internet WAN might need to consider how to improve performance in the middle mile. Whether it's selecting a Tier 1 Internet service provider (ISP), using a Network as a Service (NaaS) provider, an Over-the-Top (OTT) middle mile optimization tool, or joining peering exchanges, it's clear that WAN managers have entirely new vendors or solutions to evaluate to ensure end-to-end performance.

I believe it will be the NSPs who can match the right products, solutions and vendors to an enterprise's unique needs (with transparency and flexibility) that will ultimately win in this post-MPLS landscape. It likely won't make sense for most enterprises to create their own carrier-like sourcing teams if NSPs can stay ahead of these changes.

The key now is how WAN vendors – whether telcos, systems integrators (SIs), managed service providers (MSPs) or novel solutions – are able to work with and understand how to navigate these changes alongside the multinational enterprise.

Good data and expert analysis can help enterprises find the best strategies for application performance, agile procurement and provisions, and multicloud connectivity.

— Greg Bryan, Senior Manager, Enterprise Research, TeleGeography