With $21 million in Q3 2017 revenue and 18% of the global SD-WAN market share, Aryaka has set its sights on a 2019 IPO, says Aryaka CMO Gary Sevounts.

In December, Aryaka brought in Mike Hoffman as chief revenue officer and senior vice president of global sales. Sevounts says Hoffman is "an instrumental hire for us because of his experience in taking companies to IPO." Hoffman previously was the chief revenue officer for Big Switch Networks and VP of worldwide sales at Gigamon, where he helped drive Gigamon's IPO in 2013. The company's revenue grew from $20 million to $140 million during Hoffman's six years there.

Zeus Kerravala, founder and principal analyst for ZK Research, says the timing sounds right for Aryaka's planned IPO. SD-WANs have mostly been adopted by small and midsized business; large enterprises may have been more hesitant to adopt the technology as their WANs tend to be more complicated with more moving parts. Aryaka's global private network could appeal to larger enterprises as their interest in deploying SD-WANs grows, he adds. Aryaka currently has about 700 enterprise customers and partners with several service providers, including KDDI Corp. , SK Broadband and Internet Binat. (See Aryaka Launches Clientless SD-WAN for Remote Access.)

"The one thing investors look for in public companies is good growth opportunities," he says of Aryaka's planned IPO. "We're still in the first inning as far as SD-WAN goes. Given now it's moving more up-market where Aryaka sells, I think the timing of an IPO would be good."

In Q3, Aryaka ranked second among SD-WAN suppliers, behind VeloCloud Networks Inc. , which has 22% market share and garnered $26 million in 3Q17 revenue. Silver Peak Systems Inc. is third with 12% of the market and $14 million in revenue, according to an IHS Markit report. Cliff Grossner, senior research director and advisor for the cloud and data center research practice for IHS Markit, notes that this report focused solely on software and appliance revenue back to the SD-WAN vendors -- it doesn't include service revenue generated by a service provider selling an SD-WAN service, for example.

Regarding the IHS Markit report and state of the SD-WAN market overall, Kerravala says "SD-WAN has a lot of runway still ahead of it" and there's significant room for SD-WAN vendors to jostle for the top seat.

"It's not like being number one or two today is a predictor of being able to maintain number one or two," he adds. "It does give you a bit of a head start but certainly there's a lot of runway ahead for Aryaka to become number one or maybe make mistakes and become number two," says Kerravala. "I certainly don't think the musical chairs are set yet."

Despite SD-WAN's rapid takeoff in 2017, IHS's Grossner says it remains a small market, only totaling $116 million in revenue for Q317. In IHS Markit's data center and enterprise SDN report on H1 2017, Grossner explains that with the acquisitions of VeloCloud and Viptela, respectively, "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."

Aryaka's Sevounts predicts more consolidation in 2018, as well as growing interest from cloud providers like Amazon, Google and Microsoft in "embracing SD-WAN technologies."

"We will see some shift toward next-generation private global networks based on SD-WAN, similar to what Aryaka has," he says. "We'll see more consolidation -- more companies buying smaller companies to strengthen their portfolios to compete better against Cisco and VMware."

Kerravala echoes the sentiment that an SD-WAN acquisition could be a good move for cloud providers seeking more control over the end-user experience and to provide enterprises with a turnkey solution.

"If AWS were to resell or acquire an SD-WAN company, that would take a lot of complication away from the customer, making sure components work together," he says.

So where does the SD-WAN market go from here? IHS's Grossner says SD-WAN is still in the midst of tackling the initial use case to solve the transport problem and "virtualize the WAN links and provide some automation, ease of administration, and better quality user-experience."

"The technology is there and I wouldn't say the problem is totally solved, but it's now a matter of repeating what we've already done," he says. "I think the next important challenge for SD-WAN and for the vendors is to evolve their offering so that it becomes a fabric for the multicloud." (For more on SD-WAN's impact on the multicloud, see NTT's View of the Enterprise Multicloud.)

— Kelsey Kusterer Ziser, Senior Editor, Light Reading