Global SD-WAN hardware and software revenue is forecast to reach $3.3 billion by 2021, growing from a current market size of just $137 million worldwide in the first half of 2017, according to the latest report by IHS Markit.
The robust growth is supported by partnerships between service providers and SD-WAN vendors in deploying overlay solutions — and as virtual network function (VNF)–based solutions become more closely integrated with carrier OSS and BSS.
At the same time, consolidation and acquisitions are underway in the SD-WAN market as vendors race to include SD-WAN technology in their offerings.
Following Cisco’s acquisition of Viptela, VMware carried out its own acquisition of VeloCloud, the SD-WAN revenue leader in the first half of 2017, for an undisclosed amount.
“VMware and Cisco have acquired the two SD-WAN market share leaders, making the SD-WAN market a two-horse race for the number-one spot,” said Cliff Grossner, senior research director and advisor for cloud and data center at IHS Markit.
"And we could see even more consolidation as vendors set out to add SD‑WAN to their capability sets, especially since the technology is key to supporting connectivity in the multi-clouds that enterprises are building.”
“Currently, the majority of SD-WAN revenue is from appliances, with early deployments focused on rolling out devices at branch offices,” Grossner said. “Moving forward, we expect a larger portion of SD-WAN revenue to come from control and management software as users increasingly adopt application visibility and analytics services.”
More highlights from the IHS Markit data center and enterprise SDN report:
· Globally, data center and enterprise SDN revenue for in-use SDN-capable Ethernet switches, SDN controllers and SD-WAN increased 5.4 percent in H1 2017 from H2 2016, to $1.93 billion
· Based on in-use SDN revenue, Cisco was the number-one market share leader in the SDN market in H1 2017, followed by Arista, White Box, VMware and HPE.
· Looking at the individual SDN categories in H1 2017, White Box was the frontrunner in bare metal switch revenue, VMware led the SDN controller market segment, Dell held 45 percent of branded bare metal switch revenue and HPE had the largest share of total SDN-capable (in-use and not-in-use) branded Ethernet switch ports.