Reading the IT Tea Leaves: Five SD-WAN Predictions for 2020

Here that rumbling? It’s the sound of the software-defined wide-area network (SD-WAN) market rising up like an earthquake throwing up a new mountain range. According to a recent IDC forecast, sales of SD-WAN infrastructure increased by nearly 65 percent in 2018 to $1.4 billion. By 2023, IDC expects the SD-WAN market to exceed $5.2 billion.

Ask analysts, and they’ll tell you that SD-WAN is well on its way to becoming the default WAN connectivity option for enterprises. So, what should we expect the next 12 months to bring to this dynamic new market? Where does SD-WAN go from here? Here are five predictions for 2020.

SD-WAN will start turning up in new places (and cases).
One broad trend we’re seeing is the digital edge moving farther out towards where products and services get consumed. Across automotive, retail, healthcare and many other verticals, businesses are moving core applications and business processes out to the edge. As they do, they need new kinds of edge intelligence. SD-WAN fits the bill perfectly.

Intelligent edge devices (be they connected vehicles, remote health monitors, drones) will require businesses to extend the same quality of experience (QoE) they deliver today in the corporate world out to the Internet of Things (IoT). To answer this call, look for SD-WAN capabilities to get micro-sized, embedded in all manner of IoT devices and applications.

SD-WAN will go worldwide.

Until now, SD-WAN has been primarily driven by the U.S. market. In the next year, expect it to become more global, starting with Western Europe and some markets in Asia. In Europe in particular, large and mid-market companies will be looking for WAN solutions that better support their growing use of cloud. These customers will be looking for hybrid solutions that introduce the benefits of SD-WAN, without requiring huge change or disruption to current infrastructures.

The SD-WAN market will consolidate—and MSPs will play a larger role.

Dozens of companies now offer SD-WAN solutions, with new ones seeming to pop up all the time. Most are driven by venture capital investment and are burning through significant amounts of money. By mid-2020, expect to see VC funding in this space tail off, which will spur the first big wave of consolidations.

Acquisitions of SD-WAN companies to date have mostly been from other, larger networking vendors. This year though, we’ll see managed service providers (MSPs) getting into the game. The story will follow the same path we’ve seen in the Unified Communications as a Service (UCaaS) market. Like UCaaS for service providers, MSPs that own their own SD-WAN IP will be valued more than those buying third-party services.

Application intelligence will become the central capability of SD-WAN.

As businesses in every industry rely on cloud applications for more core business functions, application experience will become the top IT priority, and legacy approaches to layer-3 routing will no longer be enough to guarantee it. Instead, businesses will need networks that can make routing decisions based on understanding exactly what an application is doing and what it needs, even within an individual session. SD-WAN vendors with solutions geared toward application QoE, and that offer the best capabilities to manage it, will surpass those that don’t.

SD-WAN and 5G network slicing will go hand-in-hand.

One of the biggest new innovations’ analysts expect to see this year is 5G network slicing. Basically, mobile operators will split up their radio access networks (RANs) into separate virtual networks, with each tuned to a specific kind of traffic or application (for example, one for voice traffic, one for telemetry, one for low-latency IoT). In this way, 5G mobile networks will become very synergistic with the type of applications running on them. In many cases, application-based routing decisions for those networks will come from SD-WAN-like capabilities sitting behind the RAN.

As the digital edge moves out to endpoints on the end of the RAN, operators will need to harmonize the quality-of-service (QoS) attributes for a given network slice with the application requirements recognized by the SD-WAN environment. It’s still an open question which will dictate which: Maybe the SD-WAN network will make the rules and the RAN will fall in line. Or, maybe SD-WAN intelligence will be used to optimize the QoS available in a given network slice. In either case, these two technologies will be sharing information and growing more closely interdependent.

Bottom Line: Go Smart or Go Home

No one can truly predict the future, but many of the trends coming to a head in 2020 point to one conclusion: user experience will play a bigger role in dictating IT investments over the next few years. If you’re evaluating SD-WAN, consider how different solutions build application intelligence into the network. That intelligence will be key to smoothing out unpredictable parts of your environment and delivering the consistent performance users expect.