Software-Defined Wide Area Network Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

SD-WAN Market Trends & Drivers

Increasing Need for Network Privacy and Visibility Is Key Driver

• Network security is always a priority for IT executives. With the burgeoning data usage worldwide, a wide range of mission-critical assets, such as applications, enterprise information, databases, and other resources, are becoming prone to unauthorized access.
• Legacy WAN solutions are not sufficient to protect the network from threats, and they also offer weak overall control. Enterprises are, hence, continuously updating their IT infrastructure to reduce the chances of malicious activities, including unauthorized access to critical business data, and ensure business continuity. Apart from this, IT administrators require real-time system visibility to track network activity from end to end.
• SD-WAN assists in monitoring and measurement traffic, provides deep visibility to IT departments into WAN, and allows them to quickly pinpoint a security attack. It enables organizations to create certain priority policies, in order to inform the network of how certain types of traffic should be treated. In addition, IT executives can establish policies with built-in encryption capabilities to specify and control external traffic and prevent confidential data access by unknown sources.
• They also provide a new level of visibility and control for IT operations teams. This includes the visibility of traffic from the data center through all of the enterprise’s internal links and remote office locations.

Growing Demand for Intelligent Pathway Control Offering Growth Opportunity

• With the growing network complexity and data congestion on network ends, the demand for policy-based routing solutions is increasing to assign a path to their traffic, based on source, destination, or specific application. SD-WAN solutions offer intelligent path control by steering traffic based on application.
• The traffic forwarding feature of SD-WAN is generally set at the centralized controller, which is then pushed forward to all SD-WAN devices. Policies are based on a number of variables, such as application profiles, IP addresses, QoS, and port number.
• Apart from this, SD-WAN solutions have immense growth opportunities with their dynamic path selection capabilities, which allow IT administrators to set up performance thresholds for various types of traffic. This ensures that critical data and applications always use the best path, based on latency, jitter, and loss over the available VPN tunnel in the network.

Concerns Regarding Secure Access to Cloud and SaaS Are Major Restraints

• With the increasing adoption of cloud-based technologies, it is critical to create a reliable and secure application access system running outside the business premises.
• The increasing intra-organizational movement of data over networks has made IT departments think about the security of critical enterprise data and other assets. While using any SaaS or accessing storage and computing resources from an IaaS provider, enterprises are uncertain of complete security and reliability. This is restraining enterprises from adopting the SD-WAN technology on a vast scale, which may hinder the global SD-WAN market growth.

SD-WAN Industry Outlook

Offering Insights

• The solution category held the larger share, of around 70%, in the market in 2023. This is mainly due to the shift toward multi-cloud environments, adoption of IoT-connected devices, increase in compliance requirements, strong requirement for secured network infrastructure, and need for application optimization. These factors have resulted in the growing adoption of SD-WAN solutions by several industries, such as IT & telecom, BFSI, and healthcare, in order to effectively meet the customer requirements.
• The service category is expected to witness the faster growth, exhibiting a CAGR of 39.2%, during the forecast period. This can be ascribed to the increasing need of organizations for SD-WAN consulting, maintenance & support, and planning solutions.

During the study, we have analyzed the following offerings in the report:

• Solution (Larger Category)
  • Software
  • Appliance
    • Physical
    • Virtual
    • Hybrid
• Service (Faster-Growing Category)
  • Consulting
  • Implementation
  • Training & support

Deployment Analysis

• The on-premises category holds the largest market share, of 45%, in 2023. This is mainly due to the security concerns of large organizations with the adoption of SD-WAN solutions and the high need for physical networking devices for effective management of the network and large volumes of unstructured data.
• The cloud category is projected to witness the highest CAGR, of 39.5%, during 2024–2030 in the market. This would mainly be due to the increasing adoption of cloud services owing to their capability to enable dynamic and highly automated operations in a cost-effective manner.
• Amidst the increasing number of cloud security challenges, such as in the control and visibility of data, configuration, and user access to cloud data and applications, SD-WAN supports in the strengthening of the networking infrastructure. This way it results in increased branch office agility, simpler orchestration, and streamlined application performance.

Below are the deployment types covered in the report:

• On-Premises (Largest Category)
• Cloud (Fastest-Growing Category)
• Hybrid

Use Case Insights

• The security category held the largest share, of around 40%, in the market in 2023. This is mainly attributed to the rising need for gathering and analyzing potential threats, monitoring and tracking events in real time, and meeting compliance needs, to ultimately be able to detect cyberattacks beforehand.
• The network operations visibility category is expected to witness the fastest growth, displaying a CAGR of 39.4%, during the forecast period. This can be ascribed to the high requirement for real-time insights in order to determine issues and simplify SD-WAN operations.

The following use cases are included in the report:

• Branch Connectivity
• Application Control
• Security (Largest Category)
• Network Operations Visibility (Fastest-Growing Category)
• Others

Industry Analysis

• The IT & telecom category accounted for the largest share, of 35%, in 2023. This is mainly due to the rapid pace of digitization in the industry, high demand for improvement in customer experience, growth of IT & telecom industry, and adoption of mobile devices in workplaces.
• Ongoing technological advancements, such as adoption of 5G network connection, implementation of IoT, focus on AI technology, and usage of big data analytics, are expected to transform the IT & telecom industry in the coming years.
• Countries such as Germany, the U.S., China, France, and the U.K. have a highly advanced telecommunications industry, which would result in the increasing adoption of SD-WAN solutions. For instance, the Chinese telecom industry is projected to reach over USD 620 billion by 2022, with a CAGR of 11.5%.
• The healthcare category is expected to witness the highest CAGR, of 39.1%, during the forecast period. This can be ascribed to the rising demand for enhanced patient experiences, expanding usage of remote medical care tools, increasing need to fulfill regulatory requirements, and surging utilization of cloud-based software applications.
• Moreover, the rising healthcare spending is supporting the adoption of SD-WAN solutions globally.

Below are the industries covered in the report:

• Retail
• Manufacturing
• Healthcare (Fastest-Growing Category)
• Banking, Financial Services, & Insurance (BFSI)
• Information Technology (IT) & Telecom (Largest Category)
• Government
• Others

North America Is Largest Market

• In 2023, North America accounted for the largest share, over 50%, in the SD-WAN market. This is mainly due to the strong presence of the major players in the region, growing frequency of the launch of advanced solutions, vast adoption of next-generation technologies, increasing support from the government for the setup of the 5G infrastructure, and strong requirement of organizations to simplify their networking operations.
• APAC is the fastest-growing market, advancing at a CAGR of 39.3% during 2024–2030. This can be credited to the growing IT spending, supportive government initiatives in China, India, and Japan for the adoption of 5G connectivity, swift digital transformation of enterprises, rapid adoption of connected devices, and growing focus on business expansion by players.
• The rapid cloud deployment of big data platforms in the region is contributing to the adoption of SD-WAN solutions by end users.
• Europe is set to be the second-fastest-growing region over the forecast period. The key factors contributing to the market progress include the growing internet penetration, elevating demand for advanced networking solutions from enterprises, adoption of IoT and connected devices in manufacturing facilities, and rising emphasis of European governments on strategic initiatives to boost their economies.
• As part of its Industry 4.0 initiatives, the European Union (EU) aims to invest more in smart manufacturing and other next-generation technologies. This will result in a high requirement for advanced security solutions, along with enhanced network monitoring software, thereby contributing to SD-WAN solution sales to enterprises.
• LATAM is likely to register a moderate growth rate in the coming years, due to the rising demand for end-to-end network security, visibility, and management among enterprises, growing number of cyberattacks in Brazil and Mexico, expanding customer requirements, and strong pace of digitization in the region.

The regions and countries analyzed in this report include:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

SD-WAN Market Share

The global SD-WAN market is fragmented in nature, and it continues to grow with the rising awareness of the advantages offered by SD-WAN, such as bandwidth optimization, improved application performance, and reduced cost. Cisco Systems Inc., VMware Inc., and Silver Peak Systems Inc. are the dominant players in the market. They are focused toward partnerships with cloud-based service providers.

SD-WAN Industry News

• In June 2022, Cisco and Telefónica Tech entered into a partnership for security, SASE, and SD-WAN solutions. This partnership aimed to offer a comprehensive security and connectivity package for connecting businesses across local branches, data centers, and remote worker locations. The service was designed to meet the needs of both large enterprises and small local businesses.
• In March 2022, Verizon partnered with VMware to incorporate the software giant's VeloCloud SD-WAN platform into its managed services portfolio. This service encompasses a centralized SD-WAN orchestrator, a network of SD-WAN gateways distributed globally, and a variety of edge appliances for branch connectivity.
• In February 2022, Cisco partnered with Microsoft to tackle the inconsistent performance of software-as-a-service (SaaS) applications. Cisco launched a new SD-WAN software, which enables the optimal routing of Microsoft SaaS applications, such as OneDrive, Microsoft SharePoint, and Teams, on SD-WANs. Customers using Cisco SD-WAN can utilize its Cloud OnRamp to direct Microsoft 365 traffic quickly, securely, and dependably.