News

Report Reveals Top 5 SD-WAN Vendors in 'Breakout Year'

• By David Ramel
• 03/04/2020

New research reveals a growing market for software-defined wide-area networking (SD-WAN) that topped $1 billion in the "breakout year" of 2019, propelled by five leading vendors.

The data comes in a new "Router & Carrier Ethernet Switch Quarterly Report" from research firm Dell'Oro Group, which summarizes the market thusly:

The Enterprise Router market is being transformed by the changing wide area network (WAN) traffic patterns driven by the adoption of cloud services. The evolution of the WAN architecture requires new capabilities in the routers used as gateways from the branch office to data centers and the cloud. The functionality of the traditional branch office router is shifting from hardware to software-based technologies.

Although 2019 was dubbed a breakout year for the SD-WAN industry, a fourth-quarter decline resulted in 1 percent year-over-year growth for the worldwide Service Provider Router and Carrier Ethernet Switch market. That's much less than similar studies of the SD-WAN market, such as last year's SD-WAN Infrastructure Forecast from research firm IDC, which indicated that the market will grow at a 30.8 percent compound annual growth rate (CAGR) from 2018 to 2023 to reach $5.25 billion.

And an October 2019 report from IHS Markit attributed a Q2 23 percent gain in the SD-WAN market -- including appliances and control and management software -- to an enterprise router replacement surge. "In our discussions with vendors, it has become apparent that most recognize SD-WAN as a mainstream technology," said IHS Markit analyst Josh Bancroft at the time. "As a result, larger enterprises have begun to refresh their legacy, router-centric WANs with SD-WAN. Vendors are capitalizing on the refresh opportunities with customers that have large bases of aging router equipment."

Dell'Oro this week said that for the full year 2019, the global SD-WAN market grew 64 percent to surpass the $1 billion level. Grabbing some 60 percent of that pie were five vendors:

• Cisco
• Silver Peak
• Versa
• VMware
• Fortinet

Highlights of the report as listed by the company include:

• The worldwide Service Provider Router and Carrier Ethernet Switch market ended the year with a sharp 7 percent Y/Y revenue decline in 4Q19, and grew a modest 1 percent for the full year 2019.
• Huawei and Nokia achieved milestones in 4Q19 by taking the top positions in the worldwide SP Router and CES market and the SP Edge Router segment, respectively. This was the first time ever that Cisco was not the top vendor in the two categories.

"SD-WAN had a breakout year in 2019," company exec Shin Umeda said in a news release announcing the for-pay report. "The market moved beyond the early adopter phase, and we observed that vendors with larger installed bases gained the critical mass needed for sustained revenue growth. This is a highly competitive market and with no vendor taking more than 20 percent market share, and we expect an ongoing market share battle in the coming years."