The rapid growth of software-defined wide area networks (SD-WANs) poses an increasing threat to the profitability of telecom service providers (CoSPs). In the next few years, companies must continue to move from managed networks to SD-WAN. IDC predicts that the global cost of spending on SD-WAN will reach $8.05 billion in 2021. 1
As more and more enterprises deploy SD-WAN, the benefits of Multi-Protocol Label Switching (MPLS), which is the traditional revenue stream of CoSP, will decline. Only when the crisis turns into a turn, integrates SD-WAN into its existing network, and provides enterprises with new value-added services using SD-WAN, CoSP can remain competitive.
These services may include:
- Combine SD-WAN technology with virtualized client devices (vCPE) to provide wholesale broadband in places where CoSP has not yet built its own network
- A one-stop shop that sells a variety of value-added services, including integrated firewalls and security or software distribution patches
- Provides services that use Cloud-based Network Function Virtualization (NFV) where cloud service provider (CSP) competition is less intense
In view of the fact that companies will control the company's entire network through only one service provider, and thus cut costs, they may be willing to order these services. CoSP can not only grow and maintain the enterprise foundation, but also expand the network coverage, explore the new market, and speed up the response to meet the requirements of emerging customers and the need to transfer in the WAN environment in the future. To compensate for the decline in MPLS revenue.
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