Fast-growing market driven by interest in a cheaper and simpler WAN as companies shift to the cloud, IDC finds.
There's been a lot of hype about software-defined WAN technology and it appears that enterprises like what they're hearing. According to a new report from market-research firm IDC, adoption of SD-WAN is growing at a rapid clip as companies look to streamline their WAN infrastructure as they transition to more cloud-based applications.
IDC surveyed more than 600 companies in nine countries and found that 70% plan to adopt SD-WAN in some form – either testing it or putting it in production -- in the next 18 months. Consistent security (36%), price (35%), and reduced complexity (31%) were the top drivers for enterprises considering SD-WAN.
Increased confidence in the promises of the emerging technology will drive market revenue to $6 billion in 2020, IDC believes. Companies surveyed by the firm estimate a 20% cost savings with SD-WAN.
"The biggest challenges are in the WAN today," Rohit Mehra, VP of network infrastructure at IDC, told me in an interview. Enterprises need to add capacity, but MPLS is expensive and using multiple providers and multiple connections is complex. SD-WAN offers companies a dynamic and secure way to mix MPLS – which enterprises want for mission-critical applications – with less costly connectivity like broadband, he said.
"I'm able to add more capacity, provide more access to cloud-based applications, and won't break the bank with SD-WAN," Mehra said.
The top use cases for SD-WAN, according to IDC's survey, are having a more efficient way to manage multiple WAN providers, increased reliability, and providing branch offices with direct SaaS provider access. Companies surveyed reported accessing nearly 50% of applications via the Internet.
Mehra noted that SD-WAN emerged as a distinct market only in the last 12 to 18 months. It was preceded by hybrid WAN architectures, which IDC defines as including at least two WAN connections from each branch office and using multiple access technologies such as MPLS, broadband Internet, and 4G/LTE, or multiple providers. The IDC expects a "significant shift" to hybrid WAN in the next 12 to 18 months.
SD-WAN technologies build on hybrid WAN by adding a centralized, application-based policy controller, analytics, a software overlay that abstracts underlying networks, and an optional routing capability for intelligent path selection across WAN links based on application policies provided by the controller, according to IDC.
The SD-WAN market is a crowded one with startups like CloudGenix, Glue Networks, and VeloCloud along with established players such as Cisco and Riverbed. Service providers also have jumped into the space, including CenturyLink, which recently announced a managed SD-WAN service that incorporates technology from Versa Networks. Last fall, Verizon announced a managed SD-WAN service based on Cisco's IWAN, and earlier this year, teamed with Viptela on another SD-WAN service.
Mehra said IDC believes telcos will play a big role in the SD-WAN market since they can bundle in a managed SD-WAN service with the MPLS or other transport services that an enterprise already buys from them.
IDC's SD-WAN survey polled enterprises in the US, Canada, UK, France, Germany, Japan, China, India, and Australia.