The lucrative and growing SD-WAN space is attracting the attention of the big cloud service providers, according to an IHS Markit report.
IHS analyst Cliff Grossner took note of VMware/VeloCloud and Microsoft's Azure's partnership on SD-WAN in the most recent third quarter. Late last month, Versa Networks announced it was partnering 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.
Going beyond just a partnership, Oracle decided to buy SD-WAN vendor Talari Networks outright in a deal that is slated to close before the end of the year.
“Cloud service providers have begun to realize the importance of bundling SD-WAN as part of a cloud service, ensuring a positive user experience when utilizing SaaS-based applications such as Office 365 or while migrating workloads to AWS or Microsoft Azure.” said Grossner, senior research director and advisor for cloud and data center at IHS Markit, in a prepared statement.
With more than 50 SD vendors on the playing field, IHS Markit's Josh Bancroft said that telcos are hedging their bets by going with more than one SD-WAN vendor.
“Although the SD-WAN market is maturing, we still see a plethora of SD-WAN vendors in the market, and carriers are beginning to show concerns that when integrating an SD-WAN vendor into their network, there is a risk the SD-WAN vendor could be acquired or drastically change offerings in a year. As a result, carriers are selecting multiple SD-WAN vendors, creating frustration and integration complexity when there is a lack of interoperability with carrier APIs” said Bancroft, senior research analyst at IHS Markit, in a prepared statement.
Overall, SD-WAN revenue reached $284M in third quarter, which was a 23% increase sequentially from the previous quarter.
VMware once again led the SD-WAN pack with 19% share of third quarter, but Cisco moved into second place with 13% revenue share while Aryaka, which was in second place in the second quarter. IHS Markit's Data Center Network Equipment market tracker finished a close third.