Cisco Virtual Networking Index report: Enterprise SD-WAN growth will increase five-fold by 2022

Cisco's fifth annual Visual Networking Index says that SD-WAN traffic in the enterprise sector will grow at a CAGR of 37%. (Cisco)

Cisco's Virtual Networking Index report is chalk full of interesting data, but aside of the explosive growth of video over the coming years, the report said that SD-WAN traffic in the enterprise sector will grow at a CAGR of 37% compared to 3% for traditional MPLS-based WAN.

While it was thought that SD-WAN would immediately eat into Telco's MPLS services, that hasn't really happened so far. Hybrid SD-WAN solutions have kept the more expensive MPLS option in play, for the most part. Cisco's VNI report, which was released today, said that SD-WAN will increase five-fold and will account for 29% of WAN traffic by 2022.

RELATED: Cisco executives—Disaggregation of tech is easy, business cases not so much

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceTelecom!

The Telecom industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceTelecom as their must-read source for the latest news, analysis and data on the intersection of telecom and media. Sign up today to get telecom news and updates delivered to your inbox and read on the go.

The report also said that edge networking continues to gain more intelligence and capacity to support evolving network demands while also creating better customer experiences by moving services and applications closer to the edge.

Global service providers, such as Deutsche Telecom and AT&T, are increasing their networking investments and architectural transformations to beef up the capabilities at the network edge.

Cisco's report projected that 33% of global service provider network capacity would be within a metro network by 2022, which is up from 27% last year. By comparison, 24% of global service provider network capacity will be in regional backbones by 2022, which will be slightly down from 25% in 2017. Overall, 43% of global service provider network capacity will be in cross-country backbones over the same timeframe, which is down from 48% in 2017.

Content delivery networks (CDNs) will play a key role in moving services and applications closer to the edge. Currently, most CDN traffic is located on regional core networks, but the metro capacity of the service provider networks is growing faster than core-capacity and will account for a third (33%) of total service provider network capacity by 2022, which is an increase from 27% in 2017.

The big number from Cisco's fifth annual VNI Forecast is that global IP traffic is forecast to reach 4.8 ZB per year by 2022, or 396 exabytes (EB) per month. In 2017, the annual run rate for global IP traffic was 1.5 ZB per year, or 122 EB per month.

The report said that video, gaming and multimedia would make up more than 85% of all traffic by 2022. IP video traffic will quadruple by 2022 and account for 82% of all traffic.

By 2022, global fixed broadband speeds will reach 75.4 Mbps, up from 39 Mbps in 2017. Over the same timeframe, households with high-speed fiber connectivity will generate 23% more traffic than households connected by DSL or cable broadband. The average FTTH household generated 86 GB per month in 2017 and will generate 264 GB per month by 2022.

“The size and complexity of the internet continues to grow in ways that many could not have imagined. Since we first started the VNI Forecast in 2005, traffic has increased 56-fold, amassing a 36 percent CAGR with more people, devices and applications accessing IP networks,” said Jonathan Davidson, senior vice president and general manager, Service Provider Business, Cisco, in a prepared statement. “Global service providers are focused on transforming their networks to better manage and route traffic, while delivering premium experiences. "