Everybody’s jumping into the SD-WAN business, whether startups or established networking companies. But what is the business trajectory for this market?
However, the market is in its infancy. Revenue from SD-WAN was just $37.9 million in 2015, according to the IHS Technology Data Center and Enterprise SDN Hardware and Software Biannual Market Tracker.
Asked about the future for these SD-WAN startups, Cliff Grossner, a senior research analyst with IHS Markit, says the market has only existed for about 18 months, so it’s way too soon to be thinking about market consolidation.
He adds, “It would surprise me if SD-WAN was eventually big enough to go public. I think these companies become part of a larger service provider’s play or are acquired. We haven’t gotten to a big consolidation phase yet.”
So what is the trajectory for these startups? Perhaps it’s the good, old-fashioned concept of running and growing a business.
IHS predicts huge growth in SD-WAN with revenue of $1.3 billion by the end of 2020. That’s based on growth estimates of 108 percent and 106 percent in 2017 and 2018, respectively, and double-digit growth above 90 percent per year to the end of 2020.
A couple of factors are driving the forecast for major growth. “Early adopters of SD-WAN have successfully deployed solutions at scale and demonstrated very good return on investment,” says Grossner. There is also a good selection of startups as well as traditional networking vendors and WAN optimization vendors (such as Riverbed and Citrix).
Perhaps rather than seeing market consolidation, we’ll see more new entrants. There are a few usual suspects that haven’t jumped into SD-WAN, yet: Brocade, Ericsson, Hewlett Packard Enterprise (HPE), and Huawei, for example. It’s possible these companies are working on creating something internally, or they may be eyeing the startups in this area.