"The two most predictable trends in the bandwidth market have been persistent demand growth and price erosion."
For PTC '22, Senior Research Manager Brianna Boudreau took a look at the most common pricing questions we've gotten over the past year to think through how they might play out in 2022.
In previous iterations of this workshop, our first question would not be if prices are falling, but by how much?
You've seen the decade challenge. Post a picture of yourself in 2010 and another in 2020. Compare. Contrast. See how far we've come. (Or reflect on a time lost, wondering aloud why youth is wasted on the young.)
At PTC 2020, Brianna Boudreau thought it would be fun to do the same thing with TeleGeography's network pricing research. She came armed with data from our January 2010 workshop, as well as our latest and greatest analysis.
Enterprises can choose few or many providers in the middle mile (or none at all). As with other technology procurement decisions, this depends on an individual enterprise’s capability to orchestrate multiple vendors and preferences for specific vendors in the chain.
It also depends on current network infrastructure and the desire to leverage that toward a reconfigured WAN, as well as the performance and cost goals the enterprise wants to achieve.
To provide insight into how a complete SD-WAN overlay can impact total network spend, it’s useful to look at how various cost components apply to a specific network.
Looking at the total cost of the overlay and its impact on a network’s total cost of ownership (TCO) affords the most apples-to-apples comparison between service providers, particularly with a number of pricing models currently in the market.
To do this level of analysis, we created a hypothetical network based on our median WAN Cost Benchmark customer.
While the key SD-WAN transformation use case was built around network cost and resiliency, its focus is now shifting to security.
Enterprises have moved to more internet connectivity. Traffic patterns have moved away from on-premise data centers to neutral colo facilities or cloud service providers/hyperscalers. And over the past two years, edge access has moved out of the corporate site—to home and remote connections.
These forces changed how enterprises approach network security, and SD-WAN vendors have responded with new partnerships and feature sets.
This review looks at enterprise security trends and how SD-WAN vendors have adapted to accommodate security needs.
Unlike network services, SD-WAN is not a commodity, and pricing strategies are still in flux. But as the service matures, this is beginning to change.
Median price points have started to decline and the range in reported vendor prices has started to converge.
Let's unpack SD-WAN prices—starting with pricing models.
The network faced a host of new demands and challenges in 2020, but many of the key trends that characterized the wholesale market prior to the pandemic held true.
Demand growth remains robust. And while the pace of price erosion moderated in many markets over the past year, prices still continued to decline.
SD-WAN can seem like a moving target.
But what do you need to know about SD-WAN right now, at this moment in time?
We thought a lot about this question as we developed our latest refresh of the SD-WAN Research Service. While we can't divulge all of our new intel in this blog, we did want to shout out some of our top-level findings. Keep scrolling to enjoy a bite-size sampling of our latest data.
With the update of data and analysis within our Global Bandwidth Research Service comes a refreshed look at our network pricing intel.
Yes, operators are racing to keep revenue margins ahead of eroding prices, while bandwidth demand and supply continue to grow across global routes. Abundant supply and increasing competition have led to this robust price erosion throughout the global bandwidth market.
New 100 Gbps-equipped submarine cable systems and upgrades to existing networks have further lowered unit costs. And this has driven down both 10 Gbps and 100 Gbps wavelength prices. Across critical global routes, weighted median 10 Gbps and 100 Gbps prices fell an average of 14% and 23% compounded annually since 2016.
SD-WAN has rapidly gained momentum among enterprise customers and the service has moved into a new phase of adoption.
In previous years, WAN managers were evaluating the promise of the technology itself. But today, many already have—or are in the process of—selecting a vendor and rolling out SD-WAN across their global network.
As such, they face a new set of issues in procuring and operating the network.
Australia is a place unlike any other. This is true for many reasons, but it’s certainly the case when it comes to Australia’s unique broadband environment.
This made for a fascinating backdrop as the TeleGeography team ventured to Sydney earlier this year for the first-ever WAN Summit in Australia. All that to say, the conversation was unlike those we’ve had in New York, London, or even Singapore, offering new, Down Under-specific insight into WAN management.
