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Consolidation and acquisitions are underway in the software-defined wide area network (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,” says 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.”
According to the IHS Markit “Data Centre and Enterprise SDN Hardware and Software Biannual Market Tracker”, SD-WAN is currently a small market, totaling just $137 million worldwide in the first half of 2017 (H1 2017). However, global SD-WAN hardware and software revenue is forecast to reach $3,3-billion by 2021 as service providers partner with SD-WAN vendors to deploy overlay solutions — and as virtual network function (VNF)–based solutions become more closely integrated with carrier operations support systems (OSS) and business support systems (BSS).
“Currently, the majority of SD-WAN revenue is from appliances, with early deployments focused on rolling out devices at branch offices,” Grossner says. “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.”
Other highlights from the IHS Markit data centre and enterprise SDN report include:
* Globally, data centre and enterprise software-defined networking (SDN) revenue for in-use SDN-capable Ethernet switches, SDN controllers and SD-WAN increased 5,4% 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 Hewlett Packard Enterprise.
* 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% of branded bare metal switch revenue and Hewlett Packard Enterprise had the largest share of total SDN-capable (in-use and not-in-use) branded Ethernet switch ports