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Remote working boosts the SD-WAN market finds Omdia

11 October 2021

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LONDON, 11 October, 2021 – The demand for SD-WAN continued to grow in the second quarter of 2021 despite an already high baseline set in 2020 finds data from research group Omdia.

Sales of SD-WAN solutions generated revenues of $844 million, over 30% more year-over-year, indicating that the COVID-19 pandemic is not having a significant negative impact on SD-WAN demand and could even be boosting aspects of the market. 

Omdia now projects SD-WAN revenue of $5.5 billion for 2025 which represents a $100 million increase from its previous forecast, published in June 2021. 

“We continue to expect 2021 to be a stellar year for SD-WAN,” said Dominika Koncewicz, senior analyst, data center IT and software defined networks, at Omdia. “Deployments are boosted by the need to enable remote working and provide a stable and secure connection for virtual collaboration. SD-WAN vendors are updating their go-to-market strategies and product portfolios to better target this use case. Despite SD-WAN technology being mature, vendors also continue to seek new ways to solve the challenges faced by IT departments, including offering customized solutions.”

Analytics, AI and automation are coming 

The work-from-anywhere trend has also created a requirement for better management capabilities that provide network visibility, analytics, and tools to improve network performance. The effects of healthy competition are visible in the SD-WAN market with vendors increasingly looking to differentiate by adding analytics automation and artificial intelligence (AI) features to their offerings. 

The SD-WAN market is still facing dynamic vendor landscape shifts 

The second quarter of 2021 was strong for most SD-WAN vendors who posted positive year-on-year growth. VMware continued to lead in the market with 18 percent share of revenue, while the second position this time belonged to Versa who took over Cisco. Versa had 17 percent share of the SD-WAN market revenue and Cisco had 15 percent.

Versa reported particularly strong performance, growing their revenue 16 percent quarter-over-quarter and 93 percent year-over-year. The vendor indicated that layering security over their SD-WAN offerings has had a positive business impact. Moreover, increased collaboration and partnership with tier 1 OEMs like Dell helped Versa win new clients.

“We’re seeing ongoing consolidation in the SD-WAN market, such as HPE acquiring Silver Peak and vendors are not done yet,” Koncewicz said. “In the past quarter, Extreme Networks announced their intent to acquire Ipanema from Infovista. Given Extreme Networks’ existing investment in AI software, we expect to see new capabilities, powered by AI, being added to Ipanema’s SD-WAN, which should bring extra value to Ipanema customers.”

Worldwide SD-WAN revenue by vendor

“As demonstrated by the developments in Q2 21, we should anticipate more innovation around the use of AI and machine learning (ML) to automate tuning for better performance and end-user experience,” said Vlad Galabov, director, cloud and data center research, at Omdia. “Combining this with security features and an as-a-service delivery model looks to be the winning long-term strategy in the SD-WAN market.” 

Omdia’s SD-WAN Platforms Intelligence Service

Omdia’s SD-WAN Market Tracker provides market share and forecast for SD-WAN vendors and insight into each individual vendors’ investment priorities. It is accompanied by an Omdia Universe report, which compares the SD-WAN platforms which are available today, reviewing each vendor’s strength. The Intelligence Service also includes an end-user survey capturing the opinions and strategies of companies in relation to SD-WAN and SASE.

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