Software-defined Wide Area Networking (SD-WAN) reached an inflection point in 2019 as enterprises — driven by equipment replacement cycles, increased reliance on cloud infrastructure and software-as-a-service (SaaS) applications, and the promise of reduced costs — have adopted the technology.

SDWAN adoption is poised for liftoff, with IDC is predicting revenues in the space will exceed $5 billion by 2023, and the market's meteoric growth has lead Avant Communications to declare SDWAN the most disruptive technology of 2019.

Meanwhile stiff competition in the incredibly crowded SDWAN market has forced vendors to take steps to differentiate themselves. At last count, the SDWAN market had more than 60 vendors vying for a piece of the pie.

With that in mind, here are the top five SDWAN takeaways from 2019.

While there are literally dozens upon dozens of SDWAN vendors vying for a piece of the pie, the technology has only just recently reached maturity.

Aryaka's latest “State of the WAN” report stated that more than half of enterprises are poised to make the switch from tradition WAN networks to SDWAN in the coming years. Of the 795 IT and network practitioners surveyed in the report, just 12% of those surveyed by Aryaka were in the process of deploying an SDWAN while 19% reported having completed their deployment. However, 48% were in the process of gathering information in preparation for a deployment, while 17% were actively evaluating vendors.

Auto failover, redundancy, simplified management, and cost savings topped the list of factors driving SDWAN adoption, according to Avant Communications' SDWAN report. “It is Avant’s belief that SD-WAN will continue to make ongoing incursions into the higher-end enterprise, beginning at remote offices and other edges of the network, and then reaching steadily closer toward the core,” the report reads.

One of the biggest promises made by many SDWAN vendors is that the technology will reduce costs by shifting bandwidth off of — and in some cases eliminating the need for — expensive MPLS connections. And while this can be true, with more than half of companies surveyed in the aforementioned Avant report indicating that cost savings over MPLS was a key concern, the majority were still split on whether to keep or replace their MPLS connections in favor of SDWAN and broadband internet. Roughly 40% of those surveyed said they planned to use a hybrid solution that combines the two.

However, when taking into account the size of the business surveyed, the results were telling. Roughly half of large businesses with $1 billion-plus in annual revenues planned to increase their MPLS investments, while smaller businesses showed a willingness to do away with MPLS much more quickly.

While SDWAN presents distinct advantages over traditional WANs, it would seem MPLS won't be going anywhere anytime soon.

Small businesses' willingness to adopt new technologies has made way for smaller niche SDWAN and managed service providers to find a foothold in this highly competitive market. Rather than compete with industry leaders like Cisco, VMware, and Aryaka at the top, companies like Big Leaf Networks and Adtran have found success focusing their attention on serving small businesses — a market segment that has been largely ignored by bigger players.

And according to Jon Seeber, general partner at Updata, small businesses represent more than $2 billion in untapped potential.

In its latest funding round. BigLeaf walked away from the table with a $21 million cash infusion.

“These [small- to mid-sized businesses] and mid-size enterprise businesses are struggling to address their connectivity issues with traditional networking technologies,” said Joel Mulkey, founder and CEO of Bigleaf, in a statement. “The other solutions available on the market today aren’t effective for many SaaS and cloud apps, require too much management, and aren’t intelligent enough to adapt to the pace of change in today’s businesses.”

Regardless of the size of the business, ditching MPLS for a speedy and inexpensive broadband connection doesn't come without some challenges, and one of the biggest remains security. This year saw security become a key factor in selecting an SDWAN vendor.

Avant found that more than 74% of those surveyed expressed fear that a cyberattack would cost them their job, while fewer than half believed their companies were actually prepared to combat such an attack. Those numbers were similarly mirrored by a Gartner report (sponsored by Fortinet) from late 2018, which surveyed 203 respondents with 25 or more WAN locations. It found that 72% listed security, above performance or cost, as their top concern when it comes to selecting an SDWAN provider.

As a result of this trend, many SDWAN vendors lacking robust security features have sought to bolster their offerings through integrations with firewall vendors like Palo Alto Networks and Zscaler.

At the same time, security-centric vendors like Fortinet and Barracuda have announced a slew of enhancements to their next-generation firewalls, which in many cases are an integral part of their SDWAN offerings.

This push toward broader service integration has also seen vendors from related market segments enter one of two emerging categories: SD-branch and Gartner's recently announced SASE.

According to IDC analyst Brandon Butler, SD-branch is essentially an extension of SDWAN that brings the same functionality into new aspects of the network. “It's really the idea of virtualizing other network and security functions that enterprises are using at the edge of their network,” he said in an interview with SDxCentral earlier this year.

Meanwhile, the newly penned SASE category, described by Gartner in its 2019 hype cycle report, stitches together elements of edge computing, security, and wide-area networking (WAN) into a single cloud infrastructure-managed package.

While only a few months old, there are already several traditional SDWAN vendors as well as security vendors claiming to offer a “comprehensive” SASE platform. Cato, Barracuda, and VMware are among the first traditional SDWAN vendors to make this claim.

However, the new category has also opened the door to businesses in the security space to enter the WAN market. Security Palo Alto is the latest company to climb aboard Gartner's hype train and announce a SASE product.

But it won't be the last. Gartner predicts that there will be several SASE product announcements in 2020, and that at least one of the major cloud infrastructure service providers — Amazon Web Services (AWS), Microsoft, 0r Google — would enter the market before long.