Editor’s Note: This article is part of our 2019 Preview feature, which looks at the big topics facing the industry next year. Click here for the 2019 preview in the wireless industry, click here for the 2019 preview in the video industry, and click here for the 2019 preview in the wireline industry.
Using the proverbial hockey-stick growth analogy, SD-WAN will continue to move up the stick in 2019, but a maturing market will bring on some changes.
There are numerous fast-track growth numbers out there for SD-WAN, but a report by Futuriom expects the market for SD-WAN tools and network as a service (NaaS) (nonlegacy service provider) to reach $1.5 billion in revenue by 2019 and $2.5 billion by 2021.
With over 50 SD-WAN vendors on the playing field, it's safe to say that there will be more consolidation next year as niche players fall by the wayside. SD-WAN is no longer a standalone service, which means businesses are mostly looking for managed SD-WAN vendors that can take care of their last mile needs while also including features such as segmentation, more visibility, better security and more virtual network functions.
A managed SD-WAN service is defined as a carrier-grade network offering for enterprise and business customers, which is managed by a network operator, and delivered over a software-defined network (SDN) service architecture that has separate control (overlay) and data (underlay) planes, according to MEF.
A recent report by Vertical Systems Group said that carrier-grade managed SD-WAN services in the U.S. picked up the pace in the second half of this year to the tune of more than $282 million in revenue. Rick Malone, principal of Vertical Systems Group, said he expects a major boost in revenue next year with network operators fully ramped up to sell, deliver and support managed SD-WAN services.
Some service providers, such as Orange Business Services, AT&T, and Verizon, offer both managed and different types of SD-WAN hybrid services using multiple vendors for virtualized CPUs, or appliance-based SD-WAN for smaller branch services.
While there are many DIY (do-it-yourself) SD-WAN solutions that are bought directly from an SD-WAN technology supplier or a systems integrator, businesses are moving toward service provider SD-WAN offerings to reduce the complexities of deploying them, especially when they are migrating from legacy networks to hybrid networks.
In 2018, Cisco integrated its Viptela SD-WAN, which is bought in 2017 for $610 million, more deeply across its enterprise routing platform. Also this year, VMware integrated VeloCloud's SD-WAN technologies—which it bought last year for an undisclosed sum, into its product lines. Both acquisitions have turned out to be solid moves. Oracle is looking to duplicate Cisco and VMware's successes next year after buying buying Talari Networks , also for an undisclosed sum, this year.
While some of the current SD-WAN vendors will fall by the wayside next year, others will be gobbled up companies that serve the enterprise and business sectors.
Another trend that will likely continue into 2019 is more firewall vendors stepping into the SD-WAN space. In 2018, Fortinet and WatchGuard Technologies moved from supplying security to SD-WAN vendors to offering their own flavors of it.
We'll also see more partnerships with cloud providers, similar to the deal that Versa Networks did with Amazon Web Services to offer SD-WAN to AWS partners. Citrix and Riverbed also announced availability of their SD-WAN offerings on Microsoft Azure and AWS in 2018.