Competition in the SD-WAN market continues to heat up, as Vertical Systems Group’s (VSG) latest U.S. Carrier Managed SD-WAN Leaderboard shows. The year-end 2022 roster increased from seven to nine providers, with Zayo now part of the fray.
Zayo jumped from the market tier - where companies have less than a one percent share of SD-WAN sites - to nab eighth place in VSG’s ranking. VSG attributed Zayo’s increased SD-WAN market share to the company’s acquisition of QOS Networks in January 2022.
VSG Principal Rick Malone told Fierce Zayo joining the leaderboard was unsurprising, though he believes it’s the first time an SD-WAN provider has leapt from the market tier to the leaderboard. For Zayo, managed services became a complementary revenue stream in 2022, company president Andres Irlando told Fierce this month, though fiber remains the company’s “bread and butter.”
AT&T maintained the leaderboard’s top spot for the fifth consecutive year, while Comcast continued to hold the second place position it obtained in 2021. Verizon moved up from fourth to third place in 2022, switching places with Hughes Network.
Malone went on to say both Verizon and Hughes gained SD-WAN sites, but Verizon grew faster last year. He noted Hughes was an “early leader” in the SD-WAN provider market, securing several multi-thousand site networks.
Lumen and Windstream maintained their fifth and sixth place rankings, respectively. TPx, which dropped to the challenge tier in 2021, rejoined the leaderboard at number seven, whereas Aryaka fell from seventh to ninth place.
Providers on the leaderboard must have two percent or more of the installed and billable carrier managed SD-WAN sites in the U.S. Companies that make the challenge tier hold between 1% and 2% of U.S. SD-WAN sites.
Three newcomers made it into 2022’s Challenge Tier, with Cox Business, Charter’s Spectrum Enterprise and T-Mobile joining Fusion Connect and MetTel.
In terms of vendors, Malone said the top five suppliers for the providers on the leaderboard were Cisco, Fortinet, HPE Aruba, Versa and VMware. Cisco has particularly been ramping up its SD-WAN portfolio, unveiling in February a new model of its Catalyst edge platform.
According to VSG, some of the challenges SD-WAN service providers have encountered include supply chain delays, managing security integration with evolving SASE and SSE solutions and helping enterprises best fit SD-WAN technology to meet requirements.
In addition to increased competition, Malone said 2022 saw an expansion of the managed SD-WAN market to more small and medium-sized businesses. Within the enterprise segment, companies continued to transition from legacy architectures to hybrid MPLS and SD-WAN solutions, which are now “the norm for the largest enterprises."
Malone added most of the providers on the leaderboard sell three to five different SD-WAN solutions, and most SD-WAN providers in general have implemented direct cloud connect solutions into their offerings.
For 2023, he said VSG is forecasting another “robust year of growth” for SD-WAN, but concerns about the global economy and supply chain delays persist.
“2023 will see higher speeds and lower prices for underlay connections,” said Malone. “Multi-gigabit broadband and Dedicated Internet Access (DIA) will become more common at customers’ largest sites.”
Malone also noted while there has been progress in security integration with SASE and SSE offerings, that remains a “considerable exercise” in 2023.