VMware continues to lead IHS Markit’s SD-based data reports, with the latest being a sizable advantage over rival Cisco in SD-WAN revenues during the first quarter of this year. That news is even better for VMware as the report found a healthy SD-WAN market that posted a comfortable 8% increase during the quarter.

The IHS report found that VMware controlled 20.3% of the SD-WAN revenue generated during this year’s opening quarter. Cisco controlled 13.1% of the market, while Aryaka was a close No. 3 with 11.6% of the market. That revenue includes service revenues, and sales of appliance control and management software.

VMware’s number was a slight sequential increase compared with the 20% it controlled during the fourth quarter of 2018. Cisco’s number was down slightly from 13.3%, and Aryaka was up slightly from 11.3%.

Silver Peak was a solid No. 4 on the list with 8.7% market share at the end of the first quarter, which was up from the 8.6% it had at the end of 2018. Huawei surged two positions in Q1 to snare the No. 5 spot at 5.9% market share, zooming past Nuage Networks (5.4%) and Fortinet (3.8%).

As for the overall market growth, Josh Bancroft, senior analyst at IHS Markit, noted that vendors benefited from partnerships with telecom operators, systems integrators, and managed service providers. There was also increased interest from customers in the financial vertical.

“In our discussions with vendors it’s becoming apparent that financial enterprises are rearchitecting their legacy WANs with SD-WAN to utilize traffic-routing segmentation features,” Bancroft wrote. “This ensures that traffic containing sensitive customer data is separated from other network traffic, increasing data security and aiding in demonstrating payment card industry (PCI) compliance.”

The market is also benefiting from smaller device form factors. These devices are described as being around 500 grams each and “fanless.” While initially targeted at the home office environment, Bancroft said they are increasingly being used in more diverse applications.

“These appliances have also been placed into a backpack and under battery power the appliance then provides connectivity to SaaS applications by bonding differing LTE links,” he wrote.

The SD-WAN ranking comes on the heels of VMware topping IHS Markit’s list of top SDN revenue generators for the second half of 2018. The firm controlled 22% of the $8.3 billion in revenues generated during that time frame, outselling Cisco (19%) and Arista (15%).

A recent report from NSS Labs found that SD-WAN products from eight vendors all passed minimum quality of experience measurements, but varied in their total cost of ownership. Products from Barracuda Networks, Citrix Systems, Forcepoint, Fortinet, Oracle, Silver Peak, Versa Networks, and VMware were tested.

“We saw impressive performance across the pack of technologies and NSS Labs is very pleased to see the progress made by vendors,” Mike Spanbauer, vice president of research strategy at NSS Labs, told SDxCentral in a phone interview. “I’m impressed by the market so far and I think it will continue to impress many as well.”

Spanbauer added that since the market itself has been “relatively static for two decades” he also predicts a healthy SD-WAN market that will continue growing for at least another decade. Considering the amount of on-premises legacy equipment that can be displaced by SD-WAN it’s going to take many years for that equipment to be retired and converted to SD-WAN, he explained.