CenturyLink says SD-WAN won’t disrupt its MPLS revenue base

CenturyLink headquarters

CenturyLink is not afraid that SD-WAN is going to cannibalize its long-standing MPLS revenue base. Instead, the service provider sees SD-WAN as being a complementary element in its broader business service portfolio.

This means that for the foreseeable future, enterprise customers—particularly those with an installed base of MPLS services—that purchase SD-WAN will operate in a hybrid environment where they will use both service environments.

RELATED: CenturyLink's Hussain: SD-WAN is complementing MPLS, driving hybrid networks

Glen Post, CEO and president of CenturyLink, told investors during the Goldman Sachs Communacopia Conference that SD-WAN is just one of several services its customers require.

Glen F. Post
Glen Post

“SD-WAN is not the only service customers want,” Post said. “They want MPLS/SD-WAN product that gives them the management of the system and enables them to go to places more conveniently and we can provide all of that.”

Despite forecasts from leading analyst firms predicting strident growth in SD-WAN services, Post added that it is still a minor part of its service revenues today.

“Only a very small portion of our customer base worldwide has SD-WAN service,” Post said. “It will grow and we want to be competitive, but we’re not concerned it’s going disrupt our revenue stream.”

Jeff Storey, CEO of Level 3 who will eventually become CEO of the combined company, agreed that SD-WAN is just one element it can use to address enterprise customer needs.

Jeff Storey
Jeff Storey

“It’s a product we can take to our customers to get more locations,” Storey said. “Sometimes you can’t afford to put an MPLS solution into a branch office, but we can afford to put in a SD-WAN solution and combine with an MPLS and wavelength solution to their major locations.”

Storey added that SD-WAN “is another product we can use to expand the wallet share we have with customers and the market share we have throughout the network.”