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SD WAN Market Size (2022) - $3,514.6 Million
SD WAN Market Size (2030) - $30,907.6 Million (Estimated)
Compound Annual Growth Rate (CAGR) 2022-2030 = 31.2%
During the Covid-19 pandemic, uncertainty, market instability, disruption to supply chains and a growing number of challenges cratered SD WAN market statistics from 2020 onwards. Throughout 2020/21, market forecasts for SD WAN from research groups varied widely as the unpredictability of external factors meant that forecasters, without reliable data due to deployments being held up at the supply chain level as well as no foreseeable end to disruption were required to make assumptions in the process of developing market predictions that often offered wildly differing outcomes. In 2022, as businesses adjusted to the aftermath of the pandemic to minimize disruptions, market research groups were able to obtain relatively reliable data in which to generate forecasts.
Access to more accurate information has enabled researchers to identify trends with much smaller tolerances and allow for clarity in an industry springing back into action after the short-term barriers to actioning SD WAN deployments were removed. When deployed within an enterprise network infrastructure, SD WAN can increase the reliability and redundancy of the network as well as provide a centralized control function. There is a rising demand for SD WAN due to the prevalence of cloud technology across the world.
Benefits of using an SD WAN network infrastructure include improved network security, reduced costs, simplistic deployment compared to traditional WAN, improved user experience (UX) and scalability.
In the following article, we shall discuss the current and future key trends identified within the SD WAN market report and the critical factors driving growth in the market.
The adoption of SD WAN has rapidly risen due to businesses implementing "work-from-home" (WFH) initiatives resulting from the pandemic and the requirement for cost-effective network management and automation. In 2020 the average percentage of European workers working from home was 12.3 percent.
SD WAN is an advanced networking solution that can help to facilitate remote working by improving security and agility. SD WAN is often utilized as a Virtual Private Network (VPN) alternative. VPNs can be costly, insecure and slow down connection speeds, causing performance issues such as latency, jitter and packet loss. The future of SD WAN will rest on current and next-generation security tools such as SASE, Elastic Network Interface (ENI) and specific deployments of machine learning (ML) and artificial intelligence (AI).
Worldwide the Software-Defined Network (SD WAN) industry is expected to grow by more than 30% over forecasted periods from 2023-30. Cloud services are helping the market to gain popularity. SD WAN market trends show the rising adoption of virtualization, demand for cloud-based solutions, faster growth in the Asia-Pacific (APAC) regional markets, increasing use of mobile data and need for centralized network management systems.
The global SD WAN market has benefitted from improved cloud storage and connectivity affordability, leading to an increasing number of cloud-based solutions. SD WAN is uniquely positioned to capitalize on this trend as SD WAN offers better cloud connectivity than Multi-Protocol Label Switching (MPLS).
Global IP traffic is set to increase at a Compound Annual Growth Rate (CAGR) of 27 percent, with increasing usage of cloud-based applications swelling the amount of traffic in the network. Advanced technologies such as SD WAN can assist in handling the increased traffic resulting from cloud solution usage.
In 2022 approximately 70 percent of total SD WAN deployments were solutions rather than service driven. In a global survey undertaken by enterprises in 2020, 40 percent of respondents stated that they had plans to deploy SD WAN in their organization within the next 12 months.
Data drawn from market growth reports from industry experts in the market analysis show that in 2022 the SD WAN Market Size was 3,514.6 Million USD. The report includes predictions of rapid growth and increasing adoption of SD WAN and a revenue forecast with the SD WAN market value projected to reach an estimated $30,907.6 Million USD.
An in-depth analysis of industry insights shows that the market is expected to have an estimated Compound Annual Growth Rate (CAGR) of 31.2% between 2022 and 2030. Market forecasts of SD WAN market revenue between 2019 and 2026 fit this trend, with the global market growing to $8,380.78 Million USD in 2026, up from $2,586.29 Million USD in 2021, with a 2020-2026 CAGR of 21.64 percent.
SD WAN meets the needs of a growing consumer services market. This includes services such as online education, Virtual Reality (VR), Ultra-High Definition (UHD) video, Metaverse and other applications that require application-oriented end-to-end network quality assurance, large bandwidth requirements and ultra-low latency.
Cloud deployments are projected at the highest CAGR rate among deployment modes during the forecast period. SD WAN may also be deployed on premises in a data center or in branch locations.
Regional analysis of the global SD WAN market in the forecast period shows North America is the largest market for SD WAN with revenue projections for 2022 to reach approximately $2.7 Billion USD. Service providers in North America play a vital role in the global SD WAN market.
The key drivers of continued market growth in North America are the SMEs' increasing use of SD WAN and the digitalization of large enterprises across all industry verticals. During the forecast period, North America has the highest SD WAN market share due to its position as a technologically advanced nation as well as its increasing adoption of technologies into corporate networks such as Big Data, Edge Computing, ZTNA, Mobility, Internet of Things (IoT), Hybrid Cloud, AI and Cloud Platforms.
Since its invention in 1983, the Internet has provided today's businesses, such as Small and Medium-sized Enterprises (SMEs), a way to offer their goods and services to a global market. Recent developments in SD WAN market research using segmentation analysis show a rising number of SMEs entering markets across regions, with the SME segment projected to grow at the fastest rate during the forecast period.
Due to a higher likelihood of a distributed workforce, with employees in multiple locations, an SME will often heavily rely on cloud-based applications for communication and collaboration. This heavy reliance can increase operating costs and requirements for bandwidth. In a highly competitive landscape, SMEs can reduce their operatinbg expenses (OPEX) whilst leveraging multiple links to low-cost local internet lines.
The software-defined wide area networking market in the Asia Pacific is forecasted by reports to be around 70 percent in 2032. During the last decade, digitalization has increased in the region, thereby helping the rise in region WAN use. The growing use of the Internet and the adoption of cloud services in Asia-Pacific are predicted to lead to growing SD WAN usage.
The increasing need among businesses to support affordable and reliable wireless networks to support connectivity options, like Digital Subscriber Line (DSL), Ethernet and Long-Term Evolution (LTE), according to site requirements, is anticipated to increase demand. Increasing technology investments in automation and the high adoption of IoT hardware is responsible for this forecasted high growth rate.
The IT-telecom segment will possess 25% of the SD-WAN market share by 2022, driven by the rising demand for high-performing applications in the IT sector. As smartphones become ubiquitous, they offer the lucrative potential for segment expansion. Additionally, cloud platform usage and cloud technology are expected to enhance security and availability for WAN architectures and applications. The healthcare industry is expected to grow fastest during the forecasted period at 35%.
Concerns about data protection have impeded software-defined broadband networks' expansion into new markets for wireless. Network protection is often the most challenging problem with SD WAN solutions. Security solutions must safeguard information, data integrity, and security. However, machine learning continues to increase its usage and help manufacturers tackle this problem.
Often companies looking to adopt SD WAN face challenges when deciding how to deploy to endure an optimal security strategy. Integration with cloud-native advanced security services such as Intrusion Protection Devices (IPD), Zero Trust Network Access (ZTNA), Data Loss Prevention (DLP) and Next-Generation Firewalls (NGFW) can balm this pain point, with enterprises often opting to procure SD WAN as part of a full-stack Secure Access Service Edge (SASE) solution or better yet a fully managed SASE solution from a managed service provider. SASE is the convergence of WAN enterprise networking and security.
SD WAN can detect packet loss and jitter to choose the best path for the packet and improve the Quality of Service (QoS). However, if the SD WAN concludes that all paths are bad, then it alone cannot guarantee QoS for the network.
The services segment is expected to surpass 1 billion USD in 2021. Organizations often rely on System Integrator services for integration and deployment with SD-WAN. Fragmented technologies can affect operations visibility, leading to expensive and limited resources, and could potentially accelerate the SD WAN service market size.
Advancement in hybrid cloud connectivity is driving the adoption of SD WAN among businesses focusing on enhanced IT performance. The growing demand is related to the capacity of organizations to use cloud-based services as a storage platform in an enterprise environment while deploying a private cloud for low-cost applications. In addition, a widely used public cloud deployment model for large organizations helps the hybrid deployment model of SD WAN.
SD WAN technology implementation can worsen the complexities of network management. Organizations that lack the IT resources to deploy and maintain an SD WAN solution may look to MSPs to deliver managed SD WAN to replace their traditional WAN architecture. MSPs can provide simplified SD WAN operations by leveraging a multi-vendor strategy enabling them to augment their offering to provide agility and a differentiated service tailored to business requirements.
The following organizations are the top key players with the largest market share. These leading companies are major players in the competitive landscape of networking technologies, covering both large enterprises and Small-Medium businesses and with sizeable geographic scope.
Cisco Systems Inc., Citrix Systems, Aryaka Networks, Fortinet, Oracle, VeloCloud, VMware, Palo Alto Networks, Juniper Networks, HPE Aruba, Riverbed Technology.
During the Covid-19 pandemic, there were several mergers and acquisitions, with many prominent IT vendors acquiring new entrants and niche sector start-ups. This has kept the SD WAN market competitive as key companies implement this efficient strategy to remain ahead of the competition by filling gaps in product and service portfolios. Over the next five years, market players will receive plenty of opportunities from new product launches and further acquisitions to improve their product offerings.
An increasing number of enterprises are adopting cloud computing technologies. Market trends show a shift away from traditional SD WAN and a growing demand of virtualized SD WAN such as a virtual appliance. Factors contributing to increasing usage of SD WAN are challenges such as the need for a centralized network management system, growing awareness of cyber threats, the need to improve application performance through WAN optimization and the high adoption of mobile personal devices (smartphones) and mobile Internet.
The IT challenges anticipated for 2023 by enterprises were supply chain disruption, and European companies were concerned about shortages of required skills and labour in the IT market. As previously discussed, this research report includes data from when the pandemic was ongoing, and supply chain disruptions are now easing. One of the best ways to address the labour and skills shortage would be to outsource the management of the corporate network to a managed services provider.
In 2022 IT security departments were asked what were their priorities were over the next two years, with responses focusing on increasing employee cybersecurity awareness and improving information protection and data classification.
Other growth drivers include enterprises' focus on reducing operating expenses, a rising need for mobility services and an increasing number of cloud-based solutions. Benefits to companies from reduced capital expenditure (CAPEX) and operating expenditure (OPEX), the emergence of cloud applications and rising mobile data traffic are all factors of growth for the SD WAN market.
The need for a physical appliance or other networking hardware is changing rapidly. Trends show that alongside the highest market share, software deployments are also projected to grow faster due to the high demand for software that strengthens the internet services of an enterprise to provide secure access to applications to remote users.
Cloud deployments were reported to have the highest predicted growth, with a Compound Annual Growth Rate (CAGR) of over 30 percent. The market outlook for software-defined wide area network is overwhelmingly positive, with companies increasingly taking a software-defined approach to their IT infrastructure. Market reports show leading companies past the challenges of the pandemic with cloud-based platforms set to dominate market attention in the near future.
When implemented into the network, SD WAN makes wan infrastructure easier to manage, operate and maintain through a centralized control function. Enterprises following an efficient strategy offer the fulfilment of SD WAN needs as part of a broader digital transformation. SD WAN leverages multiple links for data transmission to improve the performance of applications over the wan infrastructure compared to present performance whilst also providing cost savings of network infrastructure.
Market movements indicate that more and more enterprises are seeking to retain their competitive edge by undertaking a digital transformation of networking operations to ensure secure and reliable user access and to keep up with key developments of technology that ensure regulatory compliance and other multifaceted advantages such as streamlined application performance.
Find the important trends affecting the SD WAN market between 2023 - 2030.
Recent developments in the networking and security sector will see a rising need for SD WAN providers to implement advanced technologies into their market contributions. In response to cloud security challenges, the need for better cloud connectivity to cloud-based applications and a rapid shift towards multi-cloud environments, providers must implement advanced technology to improve network performance and enable highly automated operations.
Currently, WAN optimization improves application performance, though many organizations will see a rising need to implement technologies such as Machine Learning (ML) or Artificial Intelligence (AI). With increasing bandwidth requirements, usage of cloud data and downtime caused by reliability issues costing businesses more than ever, SD WAN plays a significant role in providing a competitive method of meeting customer requirements regardless of organization size.
Advancements in technology, such as data centers, cloud computing and enterprise mobility, will majorly impact SD WAN market growth.
It has been a testing few years for Software-Defined Wide Area Networks, especially as the product itself is relatively new though the outlook for the global SD WAN market is positive. Key players must further adjust and fine-tune their product offerings to suit the needs of early adopters and the possibility of implementing successful marketing strategies.
Detailed analysis of SD WAN market trends shows a service segment facing the challenge of changing customer perspectives but ready to change market dynamics of the networking industry in a paradigm shift not seen since the rise of MPLS surpassing Frame Relay as the dominant network infrastructure.
Consider the items below when creating your vendor shortlist.
The main factors driving growth in the SD WAN market in 2023 and beyond.