SD-WAN brings digitization back to high growth – Raynovich

It has been fun watching the Software Defined Wide Area Network (SD-WAN) market evolve over the course of a decade. As my research firm Futuriom followed SD-WAN, it became a multi-billion dollar market for virtualized network services, ranging from application performance monitoring to advanced security services.

The SD-WAN market is now poised to enter its next phase of growth as it overlaps and expands into new markets including cloud security and the movement known as Secure Access Service Edge (SASE) , as well as cloud networking for multi-cloud. and hybrid cloud services. This allows SD-WAN to expand as a platform to provide just about any virtualized network service accessible in the cloud.

After reviewing the results of our survey for the year, speaking to a community of over a dozen SD-WAN vendors, and interviewing dozens of end users, Futuriom concluded that the SD-WAN market is growing. is re-accelerating after its brief pandemic hiatus in 1H of 2020 and is on track to achieve our long-term projection of a 34% compound annual growth rate (CAGR) for bundled SD-WAN services of hardware and software. Futuriom expects the SD-WAN market to reach $ 2.6 billion by 2021, $ 3.5 billion by 2022 and $ 4.6 billion by 2023. Continued growth will be boosted by the demand for more agile, more efficient and more secure connections to cloud applications, says our new report.

The pandemic break

If you were caught off guard by the surge in demand for cloud services last year, you weren’t alone. The network market came to a halt in the first half of 2020, as physical access problems caused by the pandemic limited sales and installation opportunities. After it became clear that the pandemic and lockdowns would accelerate investments in Digitization and Work From Anywhere (WFA), however, the growth of all kinds of cloud-based IT services increased, and SD-WAN was one of those services that rebounded in the second half of 2020 and the first half of 2021, according to our interviews.

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SD-WAN growth has exploded as businesses seek to accelerate digital transformation, remote working, and cybersecurity strategies. SD-WAN, which enables the management and orchestration of network services in the cloud, is a key enabler of digital transformation. Our research shows that the customer perceived benefits of SD-WAN continue to be improved security, better management / agility, bandwidth optimization / cost savings, and faster performance of cloud applications.

These benefits were highlighted in our 2021 SD-WAN Managed Services Report released earlier this year. Interviews and analyzes for our SD-WAN Growth Report 2021, released today, indicate that they continue to be strong trends. Here are some of the conclusions we have drawn from our ongoing research:

  • SD-WAN and cloud security services converge. As SD-WAN vendors continue to add security services to accommodate a larger cloud-based cybersecurity market known as SASE, the markets will gradually merge over time as SD-WAN capabilities will expand.
  • The WFA and Work from Home (WFH) trend will continue to boost the SD-WAN market. SD-WAN incorporates virtual private network (VPN) functionality for remote workers and corporate branches, which is a key feature request.
  • Mergers and acquisitions and consolidation in the SD-WAN market are expected to continue and enter their final phase. Aryaka, Cato Networks, and Versa Networks are all good candidates for mergers and acquisitions or IPOs. Small businesses like Bigleaf or FatPipe may need to take a step soon. With many major SD-WAN transactions having already taken place, they might miss the M&A window. Musical chairs are dwindling!

Smart acquisition games

It’s interesting what the trends will mean for the remaining SD-WAN startup community, which has entered the final stages of consolidation. HPE’s acquisition of Silver Peak last year may have been one of the last major SD-WAN transactions. Now, all major networking and diverse technology companies are well positioned for the growth of SD-WAN and SASE.

For example, Cisco and VMware are taking advantage of their respective first acquisitions of Viptela and VeloCloud in 2017. In fact, VMware has gradually expanded the role of VeloCloud technology – now called VMware SASE – to become its preferred solution for the edge. of the company. and SASE services. As part of VMware SASE, for example, VMware recently launched VMware Cloud Web Security, a cloud-hosted service that better protects users and infrastructure accessing SaaS and Internet applications.

HPE is also making its 2020 acquisition of SD-WAN leader Silver Peak an anchor in its edge business history, which it now calls Aruba EdgeConnect. In just one example of the many integrations that are happening to improve network security, HPE has integrated Aruba EdgeConnect SD-WAN (acquired through Silver Peak) with Aruba’s ClearPass Policy Manager.

Juniper is using the SASE trend to migrate its portfolio of security and network management products to a cloud-based service called Security Director Cloud. And Citrix uses its SD-WAN products to network its secure work products like Workspace and integrate with major cloud providers like Azure.

Many other SD-WAN market leaders have also developed their SASE stories, including Network as a Service (NaaS) providers Aryaka Networks, which recently acquired Secucloud. Traditional network security vendors such as Fortinet and Palo Alto made sure they were also on board by integrating SD-WAN technology into their security products to produce SASE offerings.

“The pandemic has kind of accelerated this trend called SASE,” Shashi Kiran, Aryaka’s chief marketing officer, recently said in an interview with Futuriom. “In 2020 people thought it was years away. Now we hear people saying they need to move now for a cloud-centric approach on the network side, as well as security.”

All of this sets up interesting growth in the future, as a large group of network players tackle these multi-billion dollar markets. It looks like there will be a lot of action to be taken, as businesses and organizations around the world transition to SD-WAN as a flexible platform to manage cloud-based network connectivity.

R. Scott Raynovich is the Founder and Chief Analyst of Futuriom. For two decades, he has covered a wide range of technologies as an editor, analyst and publisher. Most recently, he was VP of Research at, which acquired its old tech website, Rayno Report, in 2015. Prior to that, he was Editor-in-Chief of Light Reading, where he worked for nine years. . Raynovich was also the chief investment officer at Red Herring, where he launched the New York office and helped create the original website. He has won several industry awards, including an Editor & Publisher award for best corporate blog, and his analysis has been featured by leading media including NPR, CNBC, The Wall Street Journal, and the San Jose. Mercury News. He can be contacted at [email protected]; follow him @rayno.

Industry Voices are opinion columns written by external contributors, often industry experts or analysts, who are invited to the conversation by FierceTelecom staff. They do not represent the views of FierceTelecom.

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