With enterprise investing more in cloud, big data and mobile, it's driving a greater need for SD-WAN, and creating a major market that is only now starting to grow.

Scott Ferguson, Managing Editor, Light Reading

July 31, 2017

3 Min Read
SD-WAN Market Will Hit $8B by 2021

With enterprises investing in digital transformation, as well as underlying technologies such as cloud computing, mobile, social and big data, IT is increasingly looking to software-defined wide area networking (SD-WAN) to help meet its connectivity needs. This, in turn, is creating a new market.

By 2021, the SD-WAN market could be worth about $8.05 billion, according to a new report from IDC. That equals out to a compound annual growth rate (CAGR) of about 70% over the next four years.

The IDC report points out that commercial SD-WAN offerings remain fairly new but companies are looking for better, and cheaper, networking technologies. (See SD-WAN Market Soaring to Nearly $3B, Report Finds.)

SD-WAN uses software-defined networking to establish connections between distant locations, such as enterprise facilities and cloud providers. It also provides a more flexible, less expensive alternative to wide-area networking (WAN) depending on dedicated hardware.

Figure 1: (Source: Bsdrouin via Pixabay) (Source: Bsdrouin via Pixabay)

The July 27 report from IDC finds three factor driving this increased interest in SD-WAN.

The first is digital transformation, which requires enterprises to invest in a host of technologies, including cloud and big data, and the additions of these tools "generally increases network workloads and elevates the network's end-to-end importance to business operations."

A recent study found that digital transformation is a real concern for IT managers and CIOs, and that many believe this digital project will fail. If SD-WAN can offer a cheaper and better alternative, managers would want to invest. (See Digital Transformation Causing Sleepless Nights for IT – Study.)

The second reason SD-WAN is on the rise is the increased use of software-as-a-service (SaaS). While more traditional MPLS-based WAN connectivity tools were not designed for the cloud, SD-WAN has the ability to optimize these cloud-based applications, especially for remote or branch locations. This is especially important with applications such as unified communications and collaboration (UCC).

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"SD-WAN is increasingly leveraged to provide dynamic connectivity optimization and path selection in a policy-driven, centrally manageable distributed network architecture," according to IDC.

Finally, the report noted that the increase use of software-defined networking (SDN) in the enterprise data center has helped SD-WAN gain more traction with IT departments as a trusted technology, especially on the networking side.

"Traditional WANs were not architected for the cloud and are also poorly suited to the security requirements associated with distributed and cloud-based applications," Rohit Mehra, IDC's vice president for Network Infrastructure, wrote in the report. "And, while hybrid WAN emerged to meet some of these next-generation connectivity challenges, SD-WAN builds on hybrid WAN to offer a more complete solution."

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

About the Author(s)

Scott Ferguson

Managing Editor, Light Reading

Prior to joining Enterprise Cloud News, he was director of audience development for InformationWeek, where he oversaw the publications' newsletters, editorial content, email and content marketing initiatives. Before that, he served as editor-in-chief of eWEEK, overseeing both the website and the print edition of the magazine. For more than a decade, Scott has covered the IT enterprise industry with a focus on cloud computing, datacenter technologies, virtualization, IoT and microprocessors, as well as PCs and mobile. Before covering tech, he was a staff writer at the Asbury Park Press and the Herald News, both located in New Jersey. Scott has degrees in journalism and history from William Paterson University, and is based in Greater New York.

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