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SD-WAN Market Overview
The global software-defined networking in a wide area network (SD-WAN) market was valued at $676.9 million in 2017, and it is projected to progress at a CAGR of 54.1% during 2018–2023. The increasing adoption of cloud technologies, demand for cost-effective WAN management solutions, and growing need for simplified network architecture as well as end-to-end network security and visibility are some of the key factors driving the growth of the market across the globe.
Based on offering, the SD-WAN market has been categorized into solution and service, wherein the solution category held the larger share in 2017. This is due to the need for deploying reliable infrastructure to overcome the shortcomings of internet network connections such as limited bandwidth and achieve prioritization of data routing and secure network connection between branch and remote sites.
GLOBAL SD-WAN MARKET SIZE, BY IMPLEMENTATION TYPE, $M (2013-2023)
On the basis of appliance, the SD-WAN market has been classified into virtual, physical, and hybrid appliances. Among these, the virtual category held the largest share in the market in 2017. This is attributed to the increasing adoption of virtual appliances in large offices, small branch offices, data centers, and cloud platforms, such as Amazon Web Services.
Based on industry, the SD-WAN market is categorized into IT and telecom, banking, financial services, and insurance (BFSI), government, healthcare, and others. Among these, the IT and telecom industry held the largest market share in 2017, owing to the advancements in telecommunication and information technology and growing demand for greater bandwidth for high-performance applications.
Based on region, the SD-WAN market has been categorized into North America, Europe, Asia-Pacific (APAC), Latin America (LATAM), and Middle East & Africa (MEA). Among these, North America held the largest market share in 2017 due to the large IT spending, technological advancements, rising adoption of internet of things (IoT), surge in network traffic, and growing need for enhanced network control here.
SD-WAN Market Dynamics
The increasing number of managed SD-WAN offerings is one of the major trends being observed in the global SD-WAN market. With the growing concern regarding network management complexities, with respect to network security, and lack of IT resources, enterprises are considering managed SD-WAN to replace their traditional WAN architecture. Managed SD-WAN services offer the implementation and management of the network distributed across different branch locations of organizations. As the threat of data breach increased in recent years, so did the demand for managed SD-WAN services among enterprises. It is expected that 70.0% of enterprises would opt for managed SD-WAN services in the coming years.
The growing need for a simplified enterprise network architecture is one of the key factors driving the growth of the market across the globe. Traditional WANs are becoming challenging and resource intensive to be managed by enterprises, globally. WAN architecture creates difficulties in managing a large number of network endpoints, as it requires a complex setup with firewalls and routers.
Managing multiple vendors, the lack of network visibility and application performance, high architecture cost, continuous administrative overhead at organization headquarters, and uneven services between different locations are some major issues faced by enterprises with traditional WAN technology.
SD-WAN simplifies the network complexities by easing the installation and management of many branch offices effectively. It enables zero-touch deployment, cloud-based centralized configuration through templates, and automatic monitoring of bandwidth and link performance. As SD-WAN dramatically simplifies the complex process of network performance management, organizations are increasingly adopting this solution.
While the maintenance of bandwidth are costly, enterprises are heading toward new technology solutions for economical bandwidth expansion. SD-WAN solutions provide businesses with independence and flexibility of transport by aggregating all available bandwidth and maximizing its usage while ensuring high network performance, manageability, and reliability, which is expected to offer immense growth opportunities to the SD-WAN market in the coming years.
SD-WAN Market Competitive Landscape
The global SD-WAN market is quite competitive in nature with the presence of a noticeable number of companies. Key players are focusing on mergers & acquisitions, partnerships, and product launches to have an edge over each other. For instance, in January 2018, Cisco Systems Inc. launched a new optimized Wi-Fi connected network optimization solution to improvise business apps for iOS devices. Cisco developed a security connector for iOS devices, which gathers all the network traffic generated by these devices and applications and blocks malicious sites, even if an employee is using cellular network/public Wi-Fi.
Furthermore, in December 2017, VMware Inc. acquired VeloCloud, a cloud-based SD-WAN service provider. This acquisition was aimed at enhancing VMware’s network virtualization platform, VMware NSX, and expanding VMware’s networking portfolio to address end-to-end automation, application continuity, branch transformation, and security from the data center to cloud edge.
Some of the key players operating in the global SD-WAN market are Cisco Systems Inc., Silver Peak Systems Inc., Citrix Systems Inc., Glue Networks Inc., Ecessa Corporation, Mushroom Networks Inc., Viptela Inc., Riverbed Technology Inc., CloudGenix Inc., VeloCloud Networks Inc., and Elfiq Inc.
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