The distributed cloud networking market is projected to grow from $4-billion in 2023 to $17-billion by 2028 – a compound annual growth rate (CAGR) of 34% percent – according to a new report from Dell’Oro Group.
This growth is driven by enterprises’ transition to hybrid cloud environments, the rise of AI-powered workloads, and the increasing demand for elastic, software-defined networking solutions.
“The integration of AI across enterprise IT and the adoption of multi-cloud strategies have created unprecedented challenges for traditional WAN architectures,” says Mauricio Sanchez, director, Enterprise Security and Networking at Dell’Oro Group. “Distributed cloud networking offers a much-needed reimagining of the enterprise WAN aligning security, scalability, and performance with modern IT requirements.
“As businesses adapt to AI-driven workloads and hybrid workforce models, the shift to service-centric, cloud-native networking will define the next decade of enterprise transformation,” Sanchez says. “Vendors prioritising agility, automation, and integration will emerge as market leaders.”
Additional highlights from the Dell’Oro report include:
- Multi-cloud networking leads growth: Multi-cloud networking revenues will reach over $6-billion by 2028, fuelled by the complexity of hybrid environments and the need for seamless cloud-to-cloud connectivity.
- WAN-as-a-Service dominates revenue share: WANaaS will contribute over $8-billion to the market by 2028 as enterprises transition from rigid MPLS architectures to scalable, software-defined middle-mile solutions.
- SASE integration accelerates: The SASE segment within distributed cloud networking is forecast to grow at a 50% CAGR reflecting enterprises’ prioritisation of secure, user-edge connectivity integrated with WANaaS and multi-cloud frameworks.
- Cloud-first and Opex models prevail: As-a-service solutions will dominate the market, accounting for 79% of total revenues between 2024 and 2028, signaling a clear shift from hardware-centric to subscription-based architectures.
- Regional trends favour EMEA and APAC: While North America remains the largest market, the highest growth rates are expected in EMEA, APAC, and CALA, supported by regional cloud expansion and edge computing investments.