AT&T leads, Comcast jumps two spots to No. 2 on SD-WAN leaderboard

Comcast Business continued a steady climb up Vertical System Group’s U.S. Carrier Managed SD-WAN Leaderboard, surpassing Hughes and Verizon to nab the number two spot.

When Vertical Systems Group issued its first SD-WAN leaderboard for covering market positions as of the end of 2018, Comcast sat at number eight in the rankings. It rose to number 7 in the 2019 report and progressed again to number four in the 2020 report. The latest report for 2021 shows it jumped two more spots to sit behind longtime leader AT&T, buoyed by both organic growth and site additions from its acquisition of software-defined networking company Masergy.

Rick Malone, principal of Vertical Systems Group, said in a statement competition in the carrier managed SD-WAN sector is “heating up.” Indeed, a recent report from Dell’Oro Group found the global SD-WAN market grew 35% in 2021 to hit record revenue of over $2 billion.

While Malone declined to provide a year-on-year growth figure for 2021, he told Fierce the market outperformed its expectations.

“What we saw in 2020 was the market did not meet the expectations that we had,” he said. Though the market still posted 39% growth that year, that figure was lower than expected due to the pandemic. In contrast, 2021 was “a very good year for SD-WAN” as “there was a lot of pent-up demand for the service and the providers were very active in getting sites installed.”

AT&T held tight to the number one spot for the fourth consecutive year. Hughes and Verizon, which had hitherto ranked second and third for three consecutive years, each dropped a spot to the number three and number four positions, respectively. Meanwhile, Lumen Technologies rose one spot to fifth place. Windstream and Aryaka rounded out the leaderboard, with TPx dropping off from 2020 to join the Challenger Tier in 2021.

Vertical Systems Group noted the primary suppliers for service providers in the leaderboard were Cisco, Fortinet, Versa and VMware, though Aryaka and Hughes also used some of their own technology. The aforementioned Dell’Oro report also identified Cisco, Fortinet, VMware and Versa as market leaders in 2021.

To earn a spot on the leaderboard, a company must have two percent or more of the installed and billable carrier managed SD-WAN sites in the U.S. Those in the Challenger Tier hold between 1% and 2% of the same.

TPx was joined in the Challenger Tier by Fusion Connect and MetTel. GTT and Meriplex made the Challenger Tier in 2020 but fell off in the 2021 rankings.

Among other trends Malone has noticed in the market recently is a broadening in the variety of underlay services which are used to provide SD-WAN. While broadband, dedicated internet access, ethernet and MPLS were previously the only underlay technologies available, he said fixed wireless, 4G and 5G are all now also part of the mix.

“The whole underlay development has been impressive and needed,” he said. “When you extend the network to say 4,000, 5,000 sites, they’re all going to have different types of services at those endpoints and they need to be talking to each other.”

Looking ahead to 2022, Malone said Vertical Systems Group is expecting a similar pattern in terms of site growth to what it saw in 2021.

“The larger companies, the enterprises are all looking to transform their networks and use SD-WAN, SASE, the other versions of software-defined networking that are emerging now from these providers, so there’s a lot of room for growth,” he stated. “The mid-market is being a little more cautious about their plans for this but the larger companies are all moving aggressively into this, so we think the next couple of years will be very robust for SD-WAN.”