CenturyLink is seeing robust growth from its SD-WAN business, but overall it remains just a small part of its revenue stream. Company management noted that while MPLS remains the more prominent financial driver, the two platforms are increasingly intertwined in terms of adoption.
During the first quarter of this year, CenturyLink reported that revenues from its SD-WAN business surged 45 percent year over year. That growth overshadowed the 3 percent increase posted by its more entrenched MPLS business.
However, CenturyLink CFO Sunit Patel told investors that SD-WAN revenues made up less than 1 percent of the company’s overall revenue stream in the first quarter. MPLS accounted for a more substantial 14 percent of revenues.
CenturyLink’s new CEO Jeff Storey told investors that both platforms continue to draw sales.
“We absolutely see SD-WAN as a great product for us, in combination with our other products,” Storey said. “Our customers have networking challenges. SD-WAN is a good solution for some of those. MPLS is a good solution for others. Private line, dedicated services, waves, dark fiber, they have different needs for different networking challenges.”
Storey said CenturyLink’s recent acquisition of Level 3 has better positioned the company to take advantage of those networking assets to bolster SD-WAN growth.
“Now, we still have to have the physical infrastructure to get there,” Storey said. “That’s one of the strengths of the CenturyLink network is that we can layer SD-WAN on top of the physical infrastructure directly to those customers. But we view it as an opportunity for us to gain more market share, both inside our footprint with existing customers and outside our footprint with new customers and existing customers.”
Level 3 last June unveiled a managed SD-WAN service as part of its hybrid networking portfolio.
55 Percent SDN Control
Hussain this week also noted that around 55 percent of CenturyLink’s network assets were now running in a virtualized environment, a move that bolsters its ability to serve SD-WAN services.
“Basically, we have an SDN [software-defined networking] cloud that sits in our mega-IP box,” Hussain explained. “That SDN pod is connected to our MPLS and that’s where we are developing virtualization services.”
Larger rival AT&T has touted similar numbers for SDN control of its network assets, with plans to hit 75 percent control by 2020.