Analysts: SD-WAN 5-year annual growth rate tops 40%

Becoming the “backbone of the enterprise,” SD-WAN market could hit $4.5 billion by 2022, IDC says, even as businesses seek integrated management and security features.

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Whether users are looking to stabilize cloud-connected resources, better manage remote networks or simply upgrade a timeworn wide area environment, software-defined-WAN (SD-WAN) technologies are what’s on the purchasing menu.

The proof lies in the fact that this segment of the networking market will hit $4.5 billion and grow at a 40.4% compound annual growth rate from 2017 to 2022. In 2017 alone, SD-WAN infrastructure revenues increased 83.3% in 2017 to reach $833 million, according to IDC's recent SD-WAN Infrastructure Forecast.  

A related report from researchers at the Dell’Oro Group predicts revenue from SD-WAN software components, including controller and virtual network functions, will grow almost twice as fast as the hardware components.  Over the next five years, SD-WAN software revenue will grow at a 41% compounded annual growth rate, compared to 21% for hardware.

The speed of SD-WAN adoption is one of the most surprising aspects of the forecast, said Brandon Butler a senior analyst with IDC. “The SD-WAN market is really in the early stages and we expect to see significant growth through 2022.”

IDC found that as enterprise customers add SaaS and IaaS services they will increasingly look to SD-WAN as a way of “intelligently automating how application traffic is delivered to branch sites, moving away from traditional hub-and-spoke WAN architectures and the backhauling of internet- and cloud-bound traffic to on-premises datacenters toward the increasing use of broadband internet breakout and other network transports  – 4G/LTE and 5G  –  at the branch for cost-effective application delivery.”

Users looking to upgrade and optimize their wide area network for MPLS, cellular and broadband will find it a lot easier

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