Tuesday, July 6, 2021

SD-WAN Service Provider Revenue, Though Important, is Smallish

 The SD-WAN infrastructure market has been the larger segment of the SD-WAN market since its inception. Yet, despite its importance for enterprise communications, the market remains small by global standards, representing perhaps $2.5 billion in worldwide sales volume in 2021, according to Markets and Markets.  

source: Verified Market Research 


Others believe the market--managed services and infrastructure sales--was larger: $6 billion in 2020, IDC estimated. 


IDC projects an infrastructure market worth about $4.6 billion in sales by 2022. Globally, that is a relatively small number. That might also imply that the managed services market is less than $2 billion in annual revenues. 

source: IDC 


Some project that service provider sales will be bigger than infrastructure sales in the future, as connectivity provider service revenues have--by some estimates--been bigger than do-it-yourself approaches since 2016. Others would say infrastructure sales are higher than managed service managed service revenues, which might not have reached $1.5 billion in 2020, for example. 


The issue is how much bigger, or how much smaller managed services revenue is, compared to sales of infrastructure.  By some estimates, the managed service portion of the business is nearly the same size as the infrastructure market, which supports both managed and DIY approaches, according to Frost and Sullivan data. 


source: Frost and Sullivan


Basically, SD-WAN is an enterprise networking service that replaces MPLS. So one way of estimating the size of the SD-WAN market is to look at the size of the MPLS market, which might be estimated at no bigger than $32 billion--including infrastructure and managed service approaches--at its peak. 


source: Cisco  


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