If you’ve got 15 minutes, we’ve got a host of wide area network (WAN) pricing and cloud connectivity trends to share.
TeleGeography’s Cloud and WAN Infrastructure details international WAN network service, cloud connectivity offerings, and network coverage of 153 WAN service providers.
To give you a taste of what the Cloud and WAN Infrastructure is all about, we’ve pulled some of our key findings out of this exclusive report. Here’s what we’re seeing in the industry.
Layer 3 MPLS IP VPN is a mature network product for most providers. It’s by far the most widely available international enterprise network service.
IP VPN services remain a critical component of the global WAN, despite the fact that a growing number of enterprises are diverting some corporate traffic to the public internet (Company profiles indicate that all 153 providers reviewed offer the service via their global points of presence [PoPs]).
While geographic availability is crucial in choosing an IP VPN provider, customers must also navigate the array of service features and product differences across carriers.
In addition to network footprint, individual carrier solutions are further differentiated by port capacity availability and class of service implementation.
The increasing pace of IP VPN price erosion reflects growing competition. Service providers are expanding footprints, reducing underlying transport costs with improved technology, and increasing market pressure from cost effective alternatives like DIA or business broadband.
The increasing pace of IP VPN price erosion reflects growing competition. Service providers are expanding footprints, reducing underlying transport costs with improved technology, and increasing market pressure from cost effective alternatives like DIA or business broadband.
Between Q4 2015 and Q4 2016, median 10 Mbps and 100 Mbps IP VPN port prices in key global cities decreased an average of 20 and 28 percent respectively, compared to 17 and 20 percent compounded annually since Q4 2013.
Despite universal declines, regional disparities persist.
In Q4 2016, median 10 Mbps prices ranged from $392 per month in New York to $1,448 in Mumbai. Compound annual price erosion between 2013 and 2016 ranged from 10 percent in London to 22 percent in São Paulo and Mumbai.
Faced with the daunting combination of growing bandwidth requirements and restricted network budgets, enterprise network managers must be both savvy in renegotiating contracts and in optimizing WAN design.
Enterprises opt for varying levels of hybridization. Offloading traffic from VPNs to public internet isn’t as simple as turning down the VPN and turning up the DIA.
While Layer 3 MPLS IP VPNs are the traditional option for “enterprise class” performance—affording different classes of service to suit application performance requirements—customers are now adopting a growing proportion of DIA and business broadband to accommodate the widespread use of public cloud applications accessed via the internet.
Customer adoption of public internet for WAN applications has not come at the complete expense of VPNs, which remain an important part of global enterprise networks.
Enterprises opt for varying levels of hybridization. Offloading traffic from VPNs to public internet isn’t as simple as turning down the VPN and turning up the DIA. Application performance requirements need to be mapped to connectivity service levels and traffic flows must be orchestrated accordingly.
Security also remains the largest concern when migrating corporate traffic to the public internet. Although enterprise comfort with security assurances over the public internet has grown over the past few years, it still requires a deliberate effort and a layer of service that is inherent to VPNs.
One tool assisting network managers in leveraging hybrid WAN solutions is the software-defined wide area network, or SD-WAN. SD-WAN enables enterprises to dynamically route traffic across a hybrid WAN based on current network status.
Replacing traditional branch routers with appliances that assess and use different transport technologies, it allows enterprises to route large portions of their traffic over cost effective services such as DIA or broadband, while placing voice, video, or other QoS sensitive traffic over private MPLS links.
Enterprises can pre-configure performance criteria for different applications in a centralized controller; path decisions are based on which links meet these application performance standards. As such, SD-WAN solutions address several common problems that enterprise network managers face: managing costs, decreasing network complexity, and increasing flexibility and performance.
Companies have traditionally connected to cloud services—increasingly critical to enterprise data management—via the internet.
For many companies, public internet connections to cloud services remains sufficient. But for companies with high-capacity requirements, business-critical applications in the cloud, or security concerns, cloud services cannot be left susceptible to the performance of the public internet. In response, cloud service providers (CSPs) and their carrier and colocation partners offer enterprises direct links to CSP networks that don’t touch the public internet.
Enterprise network managers have an array of service providers to choose from for direct connect service. The enterprise can set up a link directly with the cloud provider in some cases or more often the cloud providers partner with carriers, colocation providers and connectivity specialists to offer the service.
The data centers of three of the largest IaaS cloud providers—AWS, Microsoft Azure, and Google Cloud—were located in just 17 countries at the end of 2016.
Selection of a direct connect provider often depends on the location of the enterprise WAN in relation to the cloud providers’ zones or data centers.
If a company has routers located within the same colocation facility as the cloud provider, it can often work directly with the cloud service provider to facilitate the direct connect between the networks. However, not all cloud providers offer this option. Google and Azure, for example, advise customers to work through service providers. Amazon Web Services (AWS) and IBM Bluemix will work directly with the enterprise.
The data centers of three of the largest infrastructure as a service cloud providers—AWS, Microsoft Azure, and Google Cloud—were located in just 17 countries at the end of 2016. The Asia & Pacific and the U.S. & Canada regions were home to 80 percent of the cloud data centers, with Europe housing the bulk of the remaining 20 percent. Brazil is the base for the only two data center clusters located in Latin America.