AT&T picked as top managed-SD-WAN provider for the third year

AT&T, Hughes, and Verizon were selected as the top three SD-WAN providers for the third year in a row in the latest Vertical Systems Group rankings for year-end 2020. Comcast jumped to fourth place.

Despite the pandemic, expansion of carrier-managed SD-WAN services in the U.S. increased 39% in 2020. Demand was resilient across bandwidth-intensive markets, but vulnerable for verticals like retail and travel.

Vertical Systems Group is an independent market research firm focused on network services. Each year it issues its Carrier Managed SD-WAN Services Leaderboard.

The one notable change was Comcast has replaced Lumen Technologies in fourth place, moving up from seventh position in 2019. Lumen is now in sixth, Windstream remains in fifth and Aryaka dipped from sixth to seventh.

A spokesperson for Vertical said the leaderboard is based on the publicly available installed and billed sites from those service providers. So the list is based on installs, not revenue, which Vertical believes is a more accurate measure.

To qualify for a rank on the leaderboard, network providers must have 4% or more of the U.S. retail Ethernet-services market. Providers with between 1% and 4% of market qualified for Vertical Systems’ “challenge” tier.

“The managed SD-WAN market in the U.S. endured the pandemic as service providers installed hundreds of new networks in extremely challenging conditions throughout the past year,” said Rick Malone, principal analyst of Vertical Systems Group in a statement.

One thing that didn’t drive SD-WAN adoption was the work-from-home initiative during the COVID-19 lockdown. Home use had very little impact because, despite a lot more people working from home, SD-WAN wasn’t generally installed in homes because the gear is too expensive.

AT&T and Comcast

Vertical Systems said dedicated Internet access was the fastest-growing part of the carrier-Ethernet market. Another bright spot was secure, multi-gigabit Ethernet connectivity for data centers, Malone said.

AT&T got to the top in part because it is a major telecom and managed services provider. It has partnered with Velocloud (now part of VMware) to provide SD-WAN services since 2016. One of the biggest addressable markets is for MPLS, and AT&T is one of the largest MPLS providers in the US. It has been migrating its MPLS customers to managed SD-WAN.

But MPLS remains a popular service with billions in revenue. It’s slowing down but hardly anyone is shutting it down, according to Vertical. Older MPLS systems based on T1 lines with their now-meager 1.5Mbps of throughput, are being shut down and replaced with SD-WAN, but those with 10/100Mbps Ethernet are holding strong.

As for Comcast, it is the only cable MSO on leaderboard. Vertical said it is scoring billing turn-ups for multiple thousands of sites because they were able to get big SD-WAN networks turned on at a more efficient pace than its competitors. Comcast has a very successful SMB operation for DOCSIS-based networking targeting mid-size to large enterprises, according to Vertical.