Windstream has reached its 500 midsized enterprise market customer mark for SD-WAN, marking a key milestone in the service provider’s ongoing pivot toward being a next-gen managed operator.
The service provider noted that several customers across various verticals, including regional banking, healthcare, retail, and manufacturing, have purchased its SD-WAN service.
While Windstream has not revealed the names of its large SD-WAN customers, some of them include a major U.S.-based airline serving more than 50 countries and a top-100 insurance brokerage.
What has helped Windstream achieve the rapid uptake of SD-WAN are its partnerships with business customers migrating from premises-based equipment like PBXs and routers to managed-based cloud services.
This has helped Windstream create and implement a fully managed SD-WAN solution that provides an evolutionary path to a network designed for an always-on, cloud-driven operating model.
Following its acquisition of EarthLink, which had brought to the table an established SD-WAN product, the service provider is finding that its Concierge service is resonating with business customers. Concierge includes a dedicated technical service manager which helps monitor, analyze and prioritize real-time business communication services and optimizes application performance.
“Our expert Concierge service really struck a chord with larger business customers by simplifying network transformation so they can quickly reap the benefits SD-WAN offers,” said Joseph Harding, executive vice president and chief marketing officer for the Cloud & Connectivity business unit at Windstream.
Besides the Concierge service, Windstream is finding that businesses that are interested in SD-WAN are leveraging a hybrid transition: going from full MPLS to SD-WAN or from full MPLS to hybrid SD-WAN.
While it’s still early, the service provider says SD-WAN and Unified Communications as a Service (UCaaS) services are making up a larger portion of its enterprise revenues. In its third-quarter earnings call, Windstream noted that SD-WAN and UCaaS made up 36% of total enterprise sales during the quarter. Windstream’s third-quarter enterprise revenues were $554 million and the contribution margin was $106 million or about 19%, an increase of 80 basis points sequentially and 170 basis points over the past two quarters.
Still, analysts caution that the transition to SD-WAN won’t be enough to ward off near-term legacy business service declines. Fitch said in a recent research report that Windstream’s “enterprise segment remains weak due to effects of legacy revenue declines.” The rating firm added that “legacy revenues remain pressured, but Windstream's revenues should stabilize gradually as legacy revenues dwindle in the mix.”