Report: COVID-19 supply chain issues put damper on SD-WAN sector in Q1

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While the SD-WAN sector continues to grow in the first quarter of 2020, that growth is well below the annual growth for 2019, according to Dell'Oro Group. (Pixabay)

While worldwide SD-WAN market still continued to expand in the Q1 of this year, the rate of acceleration slowed, according to a report by Dell'Oro Group.

The SD-WAN market grew by 24% year-over-year but was well off the 64% annual growth for last year largely due to supply chain issues related to the coronavirus pandemic.

“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,” said Shin Umeda, vice president at Dell’Oro Group, in a statement. “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."

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RELATED: Why service providers and vendors are tuning up home-based SD-WAN services

FierceTelecom recently reported that Comcast Business was working on a home-based SD-WAN service for remote workers, which is also under consideration by other service providers.

Cisco, VMware, Silver Peak, Versa Networks and Fortinet, which Dell'Oro Group ranked as the top-five SD-WAN vendors, saw their combined revenue climb above 60% in the first quarter of this year. At various times this year, Cisco and VMware have both claimed to be the top SD-WAN vendor.

Dell'Oro Group's router and carrier Ethernet switch (CES) report also found that supply chain disruptions accounted for the majority of service provider router and CES switch market declines in the first quarter. The service provider router and CES market in China had a slight decline in the first quarter, but Dell'Oro Group said upgrades to 5G infrastructures were expected to drive strong demand over the rest of 2020.

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