More enterprises are turning to internet services for their WAN connectivity as SD-WAN replaces aging equipment, Gartner reported in this year’s Magic Quadrant for Network Services.

The analyst firm expects that by 2026, 45% of enterprise locations will exclusively use internet services for their WAN connectivity.

Some enterprises are moving to internet services for cost reasons as outdated WAN equipment requires the replacement of traditional branch routers, according to Gartner Analyst Danielle Young. Legacy equipment is often being replaced with SD-WAN appliances and solutions, which Young said is “causing a relook at the WAN overall.”

“SD-WAN provides dynamic path selection based on business or application policy, centralized policy and management of appliances, virtual private network, and zero-touch configuration,” she told SDxCentral.

SD-WAN products are WAN transport- and carrier-agnostic, and notably can create secure paths across all WAN connections, including private, public, and wireless. SD-WAN products can also be hardware- or software-based and either managed directly by enterprises or embedded in a managed service offering, Young noted.

“Most often, enterprises are migrating from private networks to create hybrid networks, which utilize a range of connectivity options depending on bandwidth, reliability, and necessity, including using more readily available internet services,” she said. “Security will need to be addressed regardless of WAN connectivity (private or internet-based); and can be addressed through a variety of different approaches.”

Gartner's prediction bodes well considering a recent IDC report that the enterprise segment of the worldwide wireless LAN (WLAN) market rose 47.9% year over year to $3.35 billion in the fourth quarter of 2022 – its highest quarterly revenue to date.

Brandon Butler, research manager at IDC, attributes this growth to the "continued easing of the component shortages and supply chain disruptions, combined with enterprises investing in the newest Wi-Fi standards."

"The strong performance of the enterprise WLAN industry shows the importance of wireless technology in the network and digital transformation goals of organizations across the globe," Butler said in an IDC announcement.

The IDC reported that Q4 2022 WLAN revenues rose near or above 50% year over year for vendors including Cisco, Hewlett Packard Enterprise (HPE)/Aruba, and Huawei.

Enterprises moving from private networks to an “internet-first SD-WAN solution" are finding performance suffering at specific endpoints. There has been a subsequent rise in interest and demand for Ethernet (L2) and wavelength services, both of which Gartner said are “integral to the hybrid solution,” as they address site specific deployments to support bigger ports and bandwidth needs.

“Though these tend to be utilized more regionally or often used to support local data centers or campus environments, enterprises should not lose sight of these available services to improve performance outcomes and ensure high availability,” Young explained.

Gartner also indicated the migration to internet WAN will drive providers to reevaluate their internet service offerings and partner to peer with local internet service providers (ISPs) for “greater geographic reach and differentiation.”

“For global network deployments, traversing the internet brings additional challenges not found in national networks, including the risk of suboptimal routing and congestion as the traffic traverses multiple ISPs,” Gartner said in its report.

The analyst firm cited a number of ways of overcoming this, including sourcing all internet services from a single provider, federations of ISPs that offer controlled routing among their members, and network-based SD-WAN gateways terminating the SD-WAN tunnels and passing the traffic over the provider’s backbone. Additionally, providers should look for enhanced internet services that control routing in a way that is agnostic to ISPs and specific SD-WAN technology.

Gartner's latest report named BT, Deutsche Telekom, NTT, Tata Communications and Vodafone as providers who have developed a “differentiated internet approach.”