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 colocation data center sector is characterized by remarkable price stability—remarkable in that such external pressures as a global pandemic, geopolitical uncertainty, and regulatory restrictions have failed to dramatically sway prices in one direction or the other.
To be sure, there are sometimes short-term movements, but over the span of several years, collective rates shift only slowly from their baseline.
Let's delve into the key aspects of colocation pricing.
Believe it or not, with 2022 comes our fifth State of the Network Report.
If this is your first State of the Network rodeo, think of this e-book as an annual telecom check-in, informed by another year of data collection and analysis from TeleGeography’s larger research portfolio.
As usual, we extract the major global bandwidth headlines, take a snapshot of the global internet, peruse the latest in data centers, check in on the cloud, and finish with an update from the voice market.
There’s no other way to put it. This State of the Network Report is a weird one.
Anyone who is familiar with our Pricing Suite knows that São Paulo is Latin America’s de facto center for wholesale IP transit and transport and reports the most competitive pricing in the region.
In other areas, we see that prices are falling as supply increases.
Colombia is one example.
"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?
Now that internet backbone operators have adapted their networks to accommodate changes in traffic flows, they've resumed a more measured approach to capacity planning and network upgrades in 2021.
That means that price trends have resumed their downward trajectory and regional characteristics accordingly.
In our latest episode of the WAN Manager Podcast, we dig into sourcing. Our listeners know that we often discuss the migration of large enterprises away from one or two global suppliers for a mostly MPLS network to a novel mix of transport types and suppliers. This is especially true due to changing trends in cloud migration, SD-WAN, and security.
Europe might be a mature bandwidth market, but it still enjoys plenty of network investments and upgrades. And this continued infusion of bandwidth has left its mark on wholesale pricing.
Readers of our Pricing Suite's latest Bandwidth Pricing Report already know that the Middle East serves as both an important node and a crucial transitway for international capacity.
Cable operators were extremely busy between 2011 and 2017 when they turned up nine new cables in the region. But submarine cable activity slowed quite a bit between 2018 and 2020, as no new cables were launched in the region.
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.
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