Report: SD-WAN market will accelerate in 2021

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After a slight dip this year due to Covid-19, Dell'Oro Group forecasts that the SD-WAN market will start to accelerate in 2021. (Pixabay)

While the SD-WAN market took a slight dip this year due to Covid-19, expect it to ramp up over the next five years, according to research by Dell'Oro Group.

The worldwide sales of SD-WAN technologies were forecast to grow at a CAGR of 24% over the next five years, according to Dell'Oro Group. The SD-WAN market is expected to surpass $4 billion by 2025.

"The SD-WAN market growth rate is lower in 2020 compared to 2019, but the market is still expected to expand 25% to 30%," said Dell'Oro Group Vice President Shin Umeda, in an email to FierceTelecom. "We are forecasting the growth to accelerate in 2021 and 2022. The pandemic caused some delays in SD-WAN deployments in 2020, but the underlying demand drivers for modernizing WAN infrastructures remains strong.

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"With more clarity on the direction of macroeconomic conditions and the pandemic in 2021, businesses will increasingly execute on their strategic SD-WAN investments, which in turn will drive a market acceleration."

Dell'Oro Group's research also found that software accounted for more than 80% of SD-WAN revenue currently, and its contribution will continue to increase over the next five years.

SD-WAN vendor consolidation is expected to continue over the next five years following a surge of deals in 2020. Among other SD-WAN deals this year, Palo Alto Networks struck a deal to buy CloudGenix and HPE bought Silver Peak to mix into its Aruba portfolio.

RELATED: VMware, Cisco, Fortinet hold down top-3 spots for SD-WAN market share—report

Earlier this month, Dell'Oro Group ranked VMware, Cisco, Fortinet, Versa Networks and Silver Peak as the top-five SD-WAN vendors by market share following the recent third quarter.