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VeloCloud Leads SD-WAN Market

VeloCloud, which VMware plans to acquire, led the crowded software-defined WAN market in the third quarter, according to new research released today by IHS Markit. The startup, one of the early players in the fast-growing SD-WAN space, garnered a 22% share worldwide, followed by Aryaka Networks with 18% and Silver Peak with 12%, the firm said.

VMware announced last month that it inked a deal to acquire VeloCloud in order to extend its network portfolio to the branch and edge.

Revenue for SD-WAN appliances and management software reached $116 million in the third quarter, up 18% from the previous quarter and 2.8% from the same quarter last year, according to IHS Markit.

Here's the firm's breakdown of the SD-WAN market for the third quarter:









Silver Peak




















































Total SD-WAN




Source: IHS Markit

© 2017 IHS Markit


SD-WAN has been one of the hottest networking trends as enterprises look to cut costs and increase efficiency of their WANs in the cloud era. In general, SD-WAN technologies enable companies to mix and match broadband, MPLS and other WAN links by using a centralized controller to prioritize traffic according to policy.

“With the WAN connectivity problem well understood and solutions ramping in deployments, SD-WAN vendors are beginning to offer additional services such as WAN optimization and virtual firewall. The next important challenge for SD-WAN vendors to solve is providing connectivity with SLAs and security for the multi-cloud,” Cliff Grossner, senior research director and advisor for the cloud and data center research practice at IHS Markit, said in a statement.

The SD-WAN market is crowded with startups, WAN optimization vendors adding the capability, and managed service providers. The number of startups, however, is dwindling after Cisco's acquisition of Viptela earlier this year and the VMware-VeloCloud deal.

IDC predicts that by mid-2020, SD-WAN will be a mainstream foundation technology, as an "enabler of edge computing" that enables faster provisioning of branch offices and remote sites. The SD-WAN market will represent more than $6 billion in spending on infrastructure and managed services by 2020, according to IDC.