SD-WAN Market to Hit $6 Billion by 2020, IDC Says

The analysts say that such trends as cloud computing are driving enterprises to adopt technologies to make their WANs more agile and affordable.


The fast-growing SD-WAN market could increase to more than $6 billion by 2020, according to analysts with IDC.

In a report March 24, the analysts said that as cloud computing and other trends grow, businesses are looking for technologies that will enable them to deploy more agile, flexible and affordable network infrastructures for their branch offices. Software-defined networking (SDN) is gaining traction in the data center, they said. Now attention is turning to software-defined WANs (SD-WANs).

"As public and private cloud use continues to grow, WAN performance becomes critical to latency-sensitive and mission-critical workloads and inter-datacenter business continuity," Rohit Mehra, vice president of network infrastructure at IDC, said in a statement. "Accordingly, as enterprises plan and implement comprehensive cloud strategies, WAN architectures need to be considered alongside, and in conjunction with, datacenter infrastructure. Moreover, as enterprises move business processes to the cloud, there is a greater need to fully integrate cloud-sourced services into WAN environments to ensure workload/application performance, availability, and security."

With the rise of not only the cloud, but other trends, such as mobile computing, unified communications (UC) and bring-your-own-device (BYOD) practices, SD-WAN technologies are getting the attention of both vendors and customers. Established networking companies like Cisco Systems are building out their SD-WAN portfolios. At the same time, an array of smaller companies—such as VeloCloud, Aryaka, Talari Networks, Viptela, Silver Peak and Glue Networks—are looking to gain traction in the space, while other vendors, like WAN optimization specialist Riverbed Technology, is making a move into the market.

Other analysts also are taking notice of the SD-WAN space. Zeus Kerravala, principal analyst with ZK Research, has said the WAN has been a pain point for businesses for years, and that isn't changing.

"In the WAN, software-defined solutions have a chance of narrowing the gap between reality and hype," Kerravala wrote in a post on the No Jitter blog site. Most organizations struggle mightily with managing the WAN, and trends such as unified communications, cloud computing, and mobility simply add to the complexity of today's WANs. All companies have local engineers and technical staff in data center locations but the WAN connects branch offices that tend to have little or no staff."

Analysts at IHS Infonetics also expect businesses to embrace SD-WAN technologies.

"The drivers for enterprises to deploy software-defined wide area network (SD-WAN) are clear: agility and security with reduced costs," Cliff Grossner, senior research director for data center, cloud and SDN at IHS, said in a recent statement. "Automating WAN operations, improving application performance, and branch office security are all necessary for agility."

Enterprises are looking at SD-WAN to help create networks that are faster, more flexible and more affordable alternatives—or complements—to Multi-Protocol Label Switching (MPLS), which is how many organizations link their data centers with their remote offices, but which is not best suited in a cloud-based world where speed is at a premium. The traditional WAN worked when data was fairly static and traffic was primarily between the data center and branch office. Now a lot of traffic in branch offices goes directly into the Internet, and mobile devices are pulling data and applications in from the cloud.

The value proposition around SD-WAN includes not only the growth of cloud computing, but also the need for more simple virtual private network (VPN) capabilities and the need to reduce MPLS costs, which will drive enterprise adoption, IDC analysts said.

They noted that a recent survey found that nearly half of enterprises will consider migrating to SD-WAN over the next two years, with revenue in the market ramping strongly this year and 2017. SD-WAN revenues will grow at more than 90 percent a year between 2015 and 2020, they said.