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Cost is just one factor that enterprises consider when evaluating network services, as care must be taken about performance and reliability before moving away from MPLS-based VPN services - indeed, application performance usually trumps any cost savings. That comes into focus when a critical application becomes unavailable or end-user experience hits an unacceptable level. With current SD-WAN implementations, MPLS continues to play a role within the network mix for large enterprises (over 70% include MPLS according to recent provider interviews). Most smaller enterprise customers will continue to use dedicated and broadband business internet, and even wireless failover for WAN services. MPLS has, and will continue to be, too expensive for some smaller enterprise customers, but for many larger enterprises, multiple business internet circuits do not address performance and may not be good enough to meet requirements.
Wireless services will relieve some pressure as a complement to, or replacement of, MPLS. 4G LTE backup, and the promise of 5G broadband wireless, adds another wrinkle to hybrid networking for both primary and backup connectivity roles. Ovum believes that MPLS still has life remaining in its role with major WAN deployments for the large enterprise market, but this may only last for a few more years before revenue declines accelerate. Providers need to plan accordingly, and lead the migration to become part of the future solutions.
Judging from interviews with large carriers, there is still life left in MPLS-based services, but it is clearly in the mature stage. These carriers report that a large majority of current SD-WAN customers are pairing SD-WAN and MPLS. Ovum has informally surveyed these carriers, and many still report single-digit-percentage volume growth. They also report that a high volume (70-80%) of their managed SD-WAN deployments retain MPLS services. Although this was a small sampling, the trend among large carriers that have historically had MPLS as their workhorse network service seems to be consistent. The signs still point to product decline over the next few years.
MPLS will remain a network WAN staple for a few more years. This perspective is based on the review of Ovum's forecast of the North America and Europe regions, where there is a highly concentrated MPLS base. MPLS network infrastructure will remain the backbone of major carriers, supporting many other network services. MPLS network technology is part of major carriers' playbooks, paired with a range of access technologies providing the last mile. Ovum foresees that MPLS will continue to operate in the background for many years to come.
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