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SD-WAN market growth slows in 1Q20

04 Jun 2020

According to a recently published report by Dell’Oro Group, the worldwide SD-WAN market continued to expand in the first quarter of 2020, but the 24% year over year growth rate was well below the 64% annual growth for 2019. 

The top five vendors, Cisco, VMware, Silver Peak, Versa, and Fortinet saw their combined revenue share climb above 60% in 1Q 2020.

“Demand for SD-WAN held up well in the first quarter, but supply chain disruptions induced by the COVID-19 pandemic caused a sharper deceleration in vendor revenue growth,” says Dell’Oro Group vice president Shin Umeda. 

“We still expect the SD-WAN market to grow by double-digits this year, but with so much macroeconomic uncertainty, strong performance won’t be a shoo-in for all vendors.”

Highlights from the 1Q 2020 Router & Carrier Ethernet Switch (CES) Report:

  • Supply chain disruptions accounted for the majority of the Service Provider (SP) Router and CES Switch market decline in 1Q 2020.
  • The SP Router and CES market in China showed a modest decline in 1Q 2020, but upgrades for 5G infrastructure are expected to drive strong demand over the rest of 2020.

SD-WAN separates WAN hardware from the control mechanism which means increased visibility into how applications are using bandwidth and more control over how traffic is steered to get the best response for the needs of each application.

This means better performance at a lower cost, even using a commercially available internet connection.

The software-defined option is also transport-agnostic, meaning that it doesn’t matter if the underlying infrastructure is MPLS, broadband, or LTE – it can manage the use of links in intelligent ways in real-time.

It is also application-aware right to the edge so applications can be recognised and decisions made based on what the network and applications’ needs are in real-time.

A Gartner study found that 70% of customers find traditional WAN slow and expensive.

With organisations rapidly moving into their digital transformation journeys, they will be using more than 60 SaaS applications, meaning increased strain on bandwidth.

If a company is looking to transition from MPLS to broadband and don’t want to lose connection quality, especially with voice and video, SD-WAN provides that capability as well as making any needed changes simple and centrally managed.

The Dell’Oro Group Router & Carrier Ethernet Switch Quarterly Report offers complete, in-depth coverage of the Service Provider Core and Edge Router, Carrier Ethernet Switch, and Enterprise Router markets for future current and historical time periods. 

The report includes qualitative analysis and detailed statistics for manufacture revenue by regions, customer types, and use cases, average selling prices, and unit and port shipments.

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