ISG Provider Lens™ Network - Software Defined Solutions and Services - Global 2019

14 Aug 2019
by Kenn Walters, Jan Erik Aase

The individual quadrant reports are available at:

Existing managed LAN and WAN services, multiprotocol label switching (MPLS) and related technologies form the backbone of the enterprise customer installed base for telcos and other communication services providers and account for most of the revenues generated worldwide. This trend, however, is rapidly changing. The software-defined network (SDN), which is closely related to network function virtualization (NFV) and software-defined WAN (SD-WAN) technologies and services, is evolving and rapidly penetrating the market. A similar trend exists with related network services such as performance assurance (management), managed networks and devices (MND), and 4G and 5G mobility (4G/5G) with associated additional (non-core) mobile servicers based on those faster mobile data stream standards, along with their triggers and influences. The main factors that drive this rapid change for enterprises are:

Increasing flexibility and agility: Enterprises have become more focused on improving the integration, automation, orchestration and management of network resources and processes. This has evolved to encompass NFV and has since led onto software-defined networking in a wider sense. This trend is being driven by enterprises’ desire to seamlessly add applications and network resources in order to meet business and user goals more efficiently and securely without creating silos or depending on vendors. This is often expressed by the business itself as “increasing flexibility and agility.”

Improving customer satisfaction while boosting sales: The ability to respond quickly and seamlessly to customer queries and quickly provide (often automatically) new services via SDN helps in elevating client experience and boosting sales.

Reducing costs and improving usage efficiency: Enterprises can improve the utilization efficiency while reducing network usage costs even beyond the savings achieved by adopting an NFV strategy. This is particularly relevant with the explosion of data usage in mobile devices, often in areas that are not business critical, and while using social media applications or other related services. Traffic can be routed over lower cost connections and at reduced reliability and quality levels automatically via software-defined pathways with little or no human interaction involved.

The aforementioned factors, together with cloud networks, have been driving significant changes to networks and their operations over the past 30 years. Some telecommunication service providers, such as AT&T, have announced plans to make at least 75 percent of their networks SDN-compliant and functional by 2022. Others have introduced SD-WAN implementations to reap benefits in a shorter term.

Many service providers that are reviewed in this study are involved in pilot projects and are regularly converting them into production-level deployments. Some have already completed such activities or have many demonstrated instances of doing so on behalf of their clients. This progression, coupled with the relative newness of SDN, has led ISG to expect that many of the companies that are currently categorized as Product Challengers or Market Challengers in this study will be able to improve their positioning over the course of the year to enter leadership positions in their respective segments.

It must be noted that significant volatility exists in the constellation of market providers, partly due to the multitude of mergers and acquisitions that occurred during the last 18 months. This trend is set to continue and may even increase during the remainder of 2019 as SDN becomes mainstream.