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.
"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.
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.