Trends in the IP transit market generally follow regional trends of the transport market.
And while some have suggested that price erosion may slow as a result of recent inflation and supply chain constraints (as it has in the wavelength market), we have not seen this trend make its way into the IP transit market.
Halfway through 2024, TeleGeography's pricing team has logged lots of frequent flyer miles on the conference circuit. From PTC in January, to Capacity events in March, and ITW later in the spring, we've been collecting as much pricing intel as possible.
As we sift through our notes—specifically our latest ITW findings—we begin to see a clearer picture of what's happening with wavelength pricing around the world.
We’ve witnessed an unprecedented slowing of bandwidth price erosion globally over the past few years, as network investors, carriers, and customers grappled with delays in new network projects, existing system upgrades, and rising equipment costs.
For the first time, many customers found themselves asking if prices were actually increasing and when price declines would return to typical levels.
While the supply chain constraints and card shortages that spurred this trend have resolved themselves, geopolitical issues have not. As a result, recent price trends vary dramatically by region.
It’s been almost a decade since SD-WAN burst onto the scene, and the service is undeniably a critical component of today’s enterprise WAN.
The core benefits associated with SD-WAN technology are consistent across all provider offerings—reduced cost and network complexity, ease of upgrades and policy changes, increased flexibility and network performance, and increased visibility into application performance.
But a dizzying array of SD-WAN service options still remain in the market.
Providers continue to add new service and security features to distinguish themselves in a crowded marketplace. And this multitude of different service options are reflected in the range of reported prices in the market.
Luckily, there is a light at the end of the tunnel: TeleGeography’s 2024 SD-WAN Vendor Guide.
At this year’s Pacific Telecommunications Council conference, I spent some time talking through TeleGeography’s latest pricing research findings and tackling the most common questions we've received over the past year.
In case you missed it, here's a recap of my Taylor Swift-themed presentation: Global Pricing Trends in a New Era.
Enterprise customers have embraced hybrid networks that employ multiple underlay technologies combined with an SD-WAN overlay. And for good reason.
Many SaaS applications and cloud services have been optimized to work over local internet connections rather than through central internet breakouts. The integration of an SD-WAN overlay addresses many of the concerns about network performance and security that come along with incorporating internet into the WAN.
And as we detailed in our recent blog series, the DIA and broadband services included in these hybrid networks are often cheaper than MPLS–sometimes considerably so. This allows WAN managers to reduce network spend or increase their capacity while staying within the same budget.
But even after enterprise customers have undergone a network transformation, it is still imperative for them to keep tabs on the market and assess what their network should cost. Particularly if their network contract includes a benchmarking clause.
With the latest update of our enterprise port pricing, we looked back at some previous hypothetical network scenarios to see how the cost of network ownership can change over time.
Corporate traffic patterns continue to change. And static, single technology transport networks designed to secure internal corporate communications no longer meet network requirements.
Today they are being replaced by dynamic, hybrid, application-aware networks.
These new WANs are intelligent at the edge. They are able to categorize data and route it over a variety of transport types based on policy or application performance requirements. And they ensure a high-quality, secure experience to users regardless of their physical location, access device, or application location.
One innovation assisting WAN managers in deploying hybrid networks—while also ensuring the security and performance of their network—is SD-WAN.
Historically, the two most predictable trends in the bandwidth market have been consistent demand growth and price erosion. But those trends have been challenged over the past few years.
Recent supply chain issues and geopolitical challenges have dramatically slowed price erosion globally. For the first time, we're asking ourselves, are prices actually increasing?
So far, we’ve looked at several more conservative approaches to constructing a hybrid WAN.
But what if we went all the way down the rabbit hole to an all Internet WAN?
For example, throwing a lot of bandwidth at the network and letting SD-WAN take care of the internet performance.
Use of the internet in corporate WANs is quickly growing. And for good reason.
Not only are internet services such as DIA and broadband cheaper than MPLS, many of the SaaS applications and cloud services that enterprises have adopted have been optimized to work over local internet connections rather than through central internet breakouts.
In addition, SD-WAN has emerged as a tool that allows WAN managers to incorporate these lower cost internet services into their network without sacrificing performance or security. But not every network site (or enterprise customer) is a good fit for an all internet WAN.
In our next two scenarios, we take an approach that we see many enterprises taking—designating network sites into tiers and assigning different network services to each tier. This allows companies to add in local internet breakouts at most offices, but keep some MPLS at higher priority sites that need service level assurances.
