VMware and Cisco acquire SD-WAN market share leaders, vie for top spot
LONDON (November 15, 2017) – Consolidation and acquisitions are underway in the software-defined wide area network (SD-WAN) market as vendors race to include SD-WAN technology in their offerings. Following Cisco’s acquisition of Viptela, VMware carried out its own acquisition of VeloCloud, the SD-WAN revenue leader in the first half of 2017, for an undisclosed amount.
“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,” said Cliff Grossner, senior research director and advisor for cloud and data center at IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions. “And we could see even more consolidation as vendors set out to add SD‑WAN to their capability sets, especially since the technology is key to supporting connectivity in the multi-clouds that enterprises are building.”
According to the IHS Markit Data Center and Enterprise SDN Hardware and Software Biannual Market Tracker, SD-WAN is currently a small market, totaling just $137 million worldwide in the first half of 2017 (H1 2017). However, global SD-WAN hardware and software revenue is forecast to reach $3.3 billion by 2021 as service providers partner with SD-WAN vendors to deploy overlay solutions — and as virtual network function (VNF)–based solutions become more closely integrated with carrier operations support systems (OSS) and business support systems (BSS).
“Currently, the majority of SD-WAN revenue is from appliances, with early deployments focused on rolling out devices at branch offices,” Grossner said. “Moving forward, we expect a larger portion of SD-WAN revenue to come from control and management software as users increasingly adopt application visibility and analytics services.”
More highlights from the IHS Markit data center and enterprise SDN report:
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