SD WAN Market Overview
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.
SD WAN Market Size, Share, Growth, Opportunities, Trends & Forecasts and the impact of the Coronavirus (SARS-CoV-2) Pandemic
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.
SD WAN Market Breakdown and Data
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.
SD WAN Market Growth
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.
SD WAN Market by Deployment
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.
SD WAN Market Size by Region (North America)
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.
Small to Medium Enterprises and their significant contribution to SD WAN market growth
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.
Rapid digitalization to boost market revenue in the Asia Pacific
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.
Prevalent usage of bandwidth-intensive applications to define the IT & telecom industry landscape
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%.
Rising data security concerns may impede industry progress
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.
The reliability issues hindering the adoption of SD WAN
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.