SD-WAN Growth Report June 2020 · The eﬀorts of cloud Htans to extend their environments for...

SD-WANGrowthReportJune2020

PrimoProMarketTrendReport-June2020

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FuturiomSD-WANGrowthReportJune2020

Highlights:

MomentumintheSD-WANmarketcon5nues.Despiteaslightslowdowninthe1Hduetopandemic-relatedsupplychainandsaleschallenges,themarketislikelytoacceleratein2H2020andinto2021asthefeaturesofSD-WANservegrowingclouddemand.

FuturiomexpectstheSD-WANtoolsandso=waremarkettoacceleratetoagrowthrateof34%CAGRtoreach$2.0billionin2020,$2.85billionin2021,and$4.6billionby2023.TheacceleraHonwillbespurredbydemandformoreagile,high-performance,andsecureconnecHonstocloudapplicaHons.

ThetopfourbenefitsofSD-WANadop5onincludeimprovedsecurity,beTermanagement/agility,bandwidthop5miza5on/costsavings,andfastercloudapplica5onsperformance.ThesebenefitswerepickedinourFuturiom2020SD-WANInfrastructureSurveyof100enterpriseendusers,whichalsoindicatedbroadeningusecasesandadopHoninthemarket.

AwarenessofSD-WANisgrowingasthemarketmatures.IntheFuturiom2020survey,92%ofrespondentssaidtheyareevaluaHngSD-WANservicesand/orsoOware.

TheWorkfromHome(WFH)trendisgivingtheSD-WANmarketaboost.SD-WANintegratesvirtualprivatenetworking(VPN)funcHonalityforbothremoteworkersandenterprisesbranches,whichisakeyfeaturedemand.

CompaniestoWatchintheSD-WANmarket,accordingtoFuturiom:AryakaNetworks,BarracudaNetworks,BigleafNetworks,CatoNetworks,CiscoSystems(Viptela),CitrixSystems,CloudGenix(PaloAltoNetworks),FatPipeNetworks,ForHnet,HPE(Aruba),NuageNetworks(Nokia),SilverPeak,VersaNetworks,andVMware(VeloCloud).

Aspredictedin2019,M&Aandconsolida5onhascon5nuedandislikelytocon5nue.TheacquisiHonleavesfewerplayersonthedancefloor.Aryaka,CatoNetworks,FatPipe,SilverPeak,andVersaNetworksareallstrongcandidatesforM&AorIPO.(Lastyear,CloudGenixwasonthislist–PaloAltoNetworksannouncedearlierthisyearthatit’sacquiringthestartup.)

Companiesfeaturedinthisreport:AdapHvNetworks,AryakaNetworks,BigleafNetworks,CiscoSystems(Viptela),CatoNetworks,CitrixSystems,CloudGenix(PaloAltoNetworks),HPE,FatPipeNetworks,ForHnet,JuniperNetworks,NuageNetworks(Nokia),Riverbed,SilverPeak,VersaNetworks,VMware(VeloCloud).

PrimoProMarketTrendReport 1

�e Cloud-First WAN

For Dummies

Gartner Peer Insights ‘Voice of

the Customer’ WAN Edge

Infrastructure, April, 2020.


1. Intro: Year 2020 - The Year of Change

It’sthefourthyearoftheannualFuturiomSoOware-definedWide-areanetworking(SD-WAN)InfrastructureGrowthreport--andaninteresHngyearit'sbeen.AstheworldgrappleswiththebusinessandtechnologychallengesoftheresponsetoCOVID-19pandemic,cloudtechnologyandcybersecurityhavecometothefore.TheevoluHonofthehealthcrisisanditseconomicimpacthavehadaneffectontheSD-WANmarket,asthecompaniesinvolvedadjusttheirproductandbusinessapproachestorespondtothechangingcondiHonsoftheworld.

Cloud-deliveredSD-WANisagrowingtechnologydomainthatenablesenterprisesandorganizaHonstosetupandmanagesecureWANconnecHonsusingcloudsoOwaredeploymentandmanagementapproaches.IthasanincreasingroletospeedupandsecurecloudconnecHvityandhasbecomeadominantgrowthareaforenterprisecommunicaHonsservices.EnterprisesarebuyingSD-WANtoreducethecomplexityinconfiguringbranch-officedevices,rouHngschemes,andnetworkaddresses.WithSD-WAN,manyofthesefuncHonscanbeabstractedintothecloudandmanagedbytheserviceprovideroranenterprisemanagerusingacloudinterface,ratherthanusingproprietarynetworkingequipment.

Formanyyears,FuturiomhascorrectlypredictedhighgrowthintheSD-WANmarket,withanapproximated34%annualgrowthrateforSD-WANplagormservices,asmeasuredbythecompoundannualgrowthrate(CAGR)ofhardwaresalesandsoOwareannualrecurringrevenue(ARR).SpeakingwithmarketparHcipants,themarketmayhavepausedslightlyinthe1HofthisyearfromrestricHonsimposedtomiHgatetheCOVID-19pandemic,butwebelievethisgrowthtrajectorywillstartre-acceleraHnginthe2Hof2020asSD-WAN’sstrategicposiHonasanenterprisenetworkingandcloudnetworkingplagormexpands.

ThenewWorkFromHome(WFH)push,whichhasbecomebroad-basedacrossglobalorganizaHons,isalsohavingalasHngimpactonbusinessesworldwide,creaHngnewdemandforadvancedSD-WANbranchsoluHons,includingthosedirectedatthehomemarket.

InaddiHontothemarketimpactoftheCOVID-19pandemic,FuturiombelievesseveraltechnologytrendswilldriveaddiHonalinnovaHonandevoluHonintheSD-WANmarket.EnterpriseITdepartmentsneedmoreefficientwaystobuildnetworksthatconnectmulHpleclouds,drivingthecreaHonofamulH-cloudnetworking(MCN)market.AsSD-WANplagormsconHnueaddingdirectcloudconnecHvitytotheirfeaturesets,it’slikelythatthenextphaseoftheirdevelopmentwillbeaimedtowardenablingMCN.Andonthesecurityfront,SD-WANplagormsarebecomingimportanttoolsfororchestraHngandmanagingbothendpointandcloudsecurityproducts--atrendthatwillgrowinimportance.

ThebohomlineisthatthecurrentbusinessenvironmentisdrivingITandnetworkingdepartmentstolookatmoreefficientwaystodeliversecureandefficientcloudconnecHvity,achallengethatSD-WANtechnologysolves.Asaresult,SD-WANislikelytobekeytomanagingnetworking,cloudconnecHvity,andsecurityfortheforeseeablefuture.



ThisreportoutlinesthelatestexpectaHonsofhowweseetheSD-WANmarkeHngevolvingbasedonextensivesurveydataandcustomerinterviews.InaddiHontospeakingwith2-3endusersperweekintheenterprisenetworkingandsecuritymarket,Futuriomconductedasurveyof100professionalsinthenetworkingandcybersecuritymarkets.Alloftherespondentswerequalifiedasdirector-levelandaboveprofessionalswithnetworking,security,andITroles.

Wealsocollectedinputfrommorethan15vendorstogetasenseofrevenuegrowthandmarketdevelopment.ThisreportpresentstheanalysisofthatdataandourinterviewswithmarketparHcipants.

2. Market Drivers: Key Benefits of SD-WAN

TheSD-WANmarkethasbeenoneofthebrightspotsfornetworkingtechnologyoverthepastdecade,bringingauniquesetofcapabiliHestosolvethereal-worldheadachesofITmanagers,networkmanagers,andsecurityspecialists.

It’sclearthatSD-WANtechnologyhasgonemainstreamandismaturing.Ofthe100enterpriseuserswesurveyed,91.5%saidtheirawarenessofthetechnologyhasgrowninthelast12months.Ofthosesurveyed,94%wereawareofSD-WANtechnology.



WhenwespeaktothenetworkmanagersandITspecialistsusingthetechnology,thethemewehearisthatSD-WANhasmadetheirliveseasier.Thisyear'sSD-WANSurveyhighlightedimprovedsecuritycapabiliHes,beherbandwidthmanagement,improvedcloudapplicaHonsperformance,improvedmanagement/orchestraHonandautomaHon,andimprovedanalyHcstounderstandwhat'shappeningonthenetwork.

Belowaretheresultsofthesurveyof100enduserswhentheywereaskedtochoosetheprimarybenefitofSD-WANtechnology.Wegoovereachcategoryinmoredetailbelow.



SecurityandSecurityServices(IncludingSASE)

BecauseSD-WANtoolshavetradiHonallyfocusedonenterprisebranchesandendpoints,theSD-WANisanaturalplacetoorchestratecloudsecurityservices.ThishasledtotheargumentthatSD-WANisevolvingintoanewcloud-securityarchitecture,whichGartnerhasnowfamouslynamedSecureAccessServiceEdge(SASE).WhatSASEreallymeansisthattheSD-WANserviceedgeisbecomingthecontrolpointforcloudsecurityfuncHons.

WhenweaskedsurveyrespondentsabouttheprimarybenefitsofSD-WAN,"ImprovedsecuritytoolsandorchestraHon"wasontopofthelistfor64%ofrespondents(mulHpleresponseswereallowed).AllofthemajorSD-WANsuppliersaremovinginthisdirecHon.

Forexample,SD-WANstartupssuchasSilverPeakandVersaNetworkshavebeenbuildingnext-generaHonfirewall(NGFW)andsecuritytoolsintotheirSD-WANplagorms.CatoNetworkshasafullyfeaturedcloudsecuritystack.FirewallvendorssuchasForHnetandPaloAltoNetworkshavebeenbuildingoutSD-WANcapabiliHesandmergingthosewiththeirfirewallofferings.(InthecaseofPaloAltoNetworks,thatmeantbuyingCloudGenix.)TradiHonalnetworkingvendorssuchasCisco,JuniperNetworks,andNuageNetworks(Nokia)aremeldingtheirnetworkinganalyHcsfuncHonalityandnetworkvirtualizaHonwithsecurity.

CloudvirtualizaHonvendorsCitrixandVMwarealsohavetheirownSD-WANsecuritystrategies,whichincludeintegraHngsecurityandnetworkingfuncHonsintotheircloudproducts.InthecaseofVMware,itsVeloCloudSD-WANproductisbeingintegratedwithitsNSXnetworkingsoluHon,usingmicro-segmentaHonandanalyHcsasasecuritytooltocreatesecureend-to-endoverlayfromthebranchtothedatacenterorthecloud.CitrixhasrecentlyintegratedacomprehensiveedgesecuritystackandhasnaHveSASEcapabiliHesinitsporgolioincludingsecureaccess,WANOpHmizaHon,ZeroTrustNetworkAccess,andRemoteBrowserIsolaHon.

AryakaNetworks,whichlikeCatoNetworksoperatesitsowntransportnetwork,providesorchestraHonofawiderangeofsecurityserviceswithitsSD-WANservice.

MostoftheSD-WANvendorsenablebehercloudsecurityorchestraHonwiththemostcommoncloudsecurityandnext-generaHonfirewall(NGFW)productsfromsupplierssuchasCheckpoint,Zscaler,andPaloAlto.

Thebohomline:SecurityisabigpartofwhereSD-WANisat.Managersdon'tjustwanttosetupandmanagenetworks--theywanttomakesuretheyaresecure.



Orchestra5onandManagement

Thesecondtopbenefitchosenbyendusersinoursurveythisyearwas"Improvedmanagement/automaHon/agility,"which55of100respondentsselected.

OneofthemainrolesofSD-WANtechnologyistoabstractoutthecomplexityofunderlyingnetworkinghardwareandsoOware,makingiteasiertoconfigureandautomate.Businesseswanttosimplifytheprocessandrolloutnetworkservicesfaster.

SD-WANenablesenduserstosetup,manage,andautomaHcallydeploymanysitesusingefficientcloudinterfacesorportals.ManyendusersseethesemoreelegantmanagementinterfacesofSD-WANasanimprovementoverlegacyhardware-drivenapproaches,whichoOenrequiremanualconfiguraHonandcommand-lineinterfaces.SD-WANalsorequireslessexperHse(e.g.,engineerscerHfiedoncertainplagorms),whichreducesoperaHonalcosts.

End-usersthatweinterviewalsoregularlycitetheneedforamoreefficientmeansofmanagingcustomerpremisesequipment(CPE)–includingeliminaHngorreplacingindividualhardwareplagormsaltogetherwithmorestandardizedSD-WANdevicesthatcanbebasedoncommercialoff-the-shelfhardware.

LoweredCostofBandwidth

Initsearlydays,oneofthefirstusescasesofSD-WANwastolowerthecostofbandwidthbyleveragingInternetorIPtransitservicestoreplacemoreexpensiveprivateleasedlinesandMPLS.Today,SD-WANsHllisthoughtofasacheaperandmoremodernMPLSalternaHve.

Inourend-usersurvey,55of100respondentssaidoneoftheprimarybenefitsofSD-WANis"beheruHlizaHonofbandwidthandlowercost."

ItshouldbenotedthatendusersinterviewedarerarelyreplacingalloftheirMPLS,thoughtheycitereducedbandwidthcostsasakeyreasonforusingSD-WAN.MostorganizaHonswetalktoarejustselecHvelytrimmingdownMPLSorconsolidaHngcircuitsandusingbroadbandorIPtransitwhereitmakesmoresense.

Forexample,ifanenterpriseapplicaHonishostedinaprivatedatacenterthatisconnectedwithaneffecHveMPLSlink,itmaynotmakesensetoreplacethat.ButifanumberofusersareaccessingcloudapplicaHonsdirectlyfromthebranch,itnolongermakessensetobackhaulthetraffictotheprivatedatacenteroverMPLSbeforesendingitovertheInternet.BreakingoutInternetandcloudtraffictothebranchopHmizeshowbandwidthisallocatedtobranchnetworks.

EmergingSD-WANtechnologiescanreducecostsandincreaseflexibilityforenduserswhetherMPLSisdeployedornot.



ByaddingapplicaHonacceleraHon,trafficprioriHzaHon,andsecureencrypHon,SD-WANcanoOenmeetmanyenterpriseWANrequirementsusingIPtransitorbroadbandatalowercostthantradiHonalleasedlineorMPLScircuits.SD-WANconnecHonscanalsobeusedtobondnetworkaccesslinesorswitchbetweenseveralaccessnetworksdependingonavailabilityandusage.

High-PerformanceCloud

SD-WANsoluHonshelpopHmizeaccesstocloudapplicaHonsbymonitoringtrafficandrouHnghigher-prioritybusinessapplicaHonsaheadofleisureservicessuchasNeglixandYouTube.FiOy-foursurveyrespondents(or54%)saidthat"higherperformanceofcloudapplicaHons"wasaprimarybenefitofSD-WAN.

AddiHonally,manyWANservicescanpeerdirectlywithcloudservicestooffera“fastlane”tobusinessapplicaHons.Thesetechniquescanbeusedto"offload"enterpriseWANbackhaul,rouHngcloudtrafficdirectlytothesourceusingacombinaHonofbroadbandtechnologies.ThiswillalsohavetheeffectofchallengingthetradiHonalApplicaHonDeliveryControllers(ADCs),whichopHmizetheperformanceofdatacenterswithloadbalancingandotherapplicaHonopHmizaHonfuncHonsaspartofadiscretehardwaredevice.InaddiHon,someSD-WANvendorsareworkingwithcloudvendorstosetupspecializedcloudgatewaysandpointsofpresence(POPs)inclouddatacenterstoprovidemoredirectaccesstocloudapplicaHons.



3.MarketForecast:Boos5ngOurProjec5ons

ThiswillbethefourthyearofourSD-WANGrowthforecast,andsofarwehavebeenonthemark.In2017,weforecast$900millioninrevenuein2019and$1.3billioninrevenuein2020,provingconservaHve.WhenresearchfirmssuchasDell’OroandIHSlaterissuedforecasts(atleastayearlater),theyweresimilartoours.Inour2019report,weupdatedthatforecastto$2billionfor2020,correctlypredicHngtheacceleraHoninthemarket.Forexample,twocompeHngtechnologyresearchfirmsrecentlysaid2019wasthe“breakout”yearinSD-WAN,puungactualrevenuesnear$1billion,veryclosetoourforecast.

Whatwillfuelthisgrowth?AsmenHonedearlier,thereisbroadawarenessofSD-WANtechnology,andthatappearstobegrowing,withthevastmajorityofenterpriseITprofessionalsfamiliarwiththebasicsofthetechnology.

Moreimportantly,thebuyingcycleisacHve.Alargemajorityofsurveyrespondents—92%—saidtheyareusingand/orevaluaHngSD-WANtechnology,asseeninthechartbelow.



Amajorityoftherespondentsalsoexpectthemarkettogrowsteadily–72respondentsof100saidtheyexpectittogrowasastrategicplagormforbothnetworkoperaHonsandsecurityoverthenext3-5years.



Whenaskedwhatendusersexpectinthenearfuture,62%ofrespondentssaidtheyhavestartedusingitandexpecttobuymore,and29%areevaluaHngit.Only1respondentsaidtheydon’tneedthetechnology.

Mostimpressively,itlookslikeeverybodyisreadytospendmoneyonSD-WANtechnology93respondents(93%)saidtheyexpecttheircompany’sdollarvolumeofinvestmentinSD-WANtoincreaseoverthenext12-24months.

ThekeytailwindforSD-WANisthepersistentdemandforcloudandsecurityproductsfromlargeenterprisebuyers.Formostpubliccloudproviderswetrack,revenuesinthefirstquarterof2020rose.AlthoughthereisnotadirectcorrelaHonbetweenpubliccloudrevenuesandSD-WANrevenues,itisgenerallyreflecHveofanenvironmentinwhichenterprisesaremovingmostoftheirITservices–includingnetworking–tocloudinfrastructure,acategorythatwebelieveSD-WANbelongsto.



TheriseofWFHaswellasanexpansionofsecurityinvestmentalsowilldrivetheSD-WANmarket.ThechartbelowshowingthegrowthofcloudrevenueisnotdirectlycorrelatedwithSD-WANuse,butitisclearthatwithpubliccloudusedrivingtheneedformoreefficientnetworksoverall,therobustgrowthincloudserviceswillconHnuetodrivedemandforSD-WANservices,whichhelpopHmizeconnecHonstocloudapplicaHonsinacost-effecHveway.

OnequesHoneverybodyhas:Howisthecurrentrecessionaryenvironment,triggeredbytheacHonstakenbygovernmentsworldwidetoslowthespreadofCOVID-19,affectedmarketadopHon?

Ononehand,thetrendtowardWFHandtheneedforbehercloudsecurityhasspurredinterestinthemarket.ButtherecessionandprecauHonarylockdownshavealsohinderedsomebusinesses,resulHnginloweredenterpriseITspendingandmakingitchallengingforsalesforcesorengineerstophysicallyvisitcustomers.

Intheend,thetwocurrentsappeartobebalancingeachotherout,whichmayhavecurtailedgrowthinthefirsthalfof2020butourresearch,includinginterviewswithSD-WANsuppliersaswellascustomers,indicatedtherewerepocketsofstalledgrowthinSD-WANprojects,butnearlyallofthesedelayswereahributedtodisrupHoninthesupplychainorphysicalsalesandinstallaHonprocessduetoCOVID-19restricHons,ratherthanbeingdrivenbyslackingdemand.



Marketleadersindicatetousthatthishasresultedinpent-updemandforinstallaHonwhichwillre-accelerateinearnestinthe2Hof2020.

“Wehaven’thadanybodydecidetheywon’tmoveforwardwiththeSD-WANpurchase,"saidDavidHughes,theCEOofSilverPeak."TheymaywanttoreducehumanintervenHon.That’sadriverforthecloud.ItputsaheightenedspotlightondigitaltransformaHon.It’sabigdriverforSD-WAN.Ifyoulookforward2-3yearseverythingisaccelerated.Whatyouareseeingissomeofthepipelinedelayedmonthbymonth.Tryingtounderstandwhatthedelayisandhowlong,that’squitehard.It’salsohardtounderstandCOVID.”

Whenwesurveyedtheenterpriseendusers,thisstrengthwasreflectedinthemarket:Ninety-threepercentofthosesurveyedexpecttheircompany’sdollarvolumeofSD-WANpurchasestoincreaseoverthenext12-24months.

Whenwerebuiltourrevenueforecastfor2020andbeyond,wehadtotakechangingcondiHonsintoaccount.Inthelongterm,trendssuchasWFHandcloudacceleraHonarelikelytoprovideaddiHonalgrowthintheSD-WANmarket.ThereisnowaddiHonalinterestinconnecHngtomulHplecloudnetworksandautomaHngsecurityonenterprisenetworks,bothfuncHonsthatSD-WANcanhelpwith.



OurnewrevenueforecastforSD-WANhardwareandsoOwarecanbeseebelow.PleasenotethisincludeshardwarethataccompaniesSD-WANsoOwareorservices,thoughmanyoftheSD-WANcompanieswesurveyedhavedifferentwaysofstructuringpricingandsales.Inourexperience,thebulkofrevenue(75%-80%)issoldasamonthlysoOwareorservicescharge,asSD-WANcompaniesaretargeHngtheannualrecurringrevenuebusinessmodel.Butsomecompanies,suchasCisco,donotalwaysclearlybreakoutSD-WANrevenuefromothersoOwarelicenses(suchasrouHngsoOware),soapples-to-applescomparisonsaredifficult.ThisiswhyFuturiomfocusesonforecasHngoverallindustrygrowth,ratherthantryingtodisHnguishmarketshareamongindividualvendors–whichwebelieveimpossible.

Weareincreasingourforecastforfour-yearrevenuegrowthto37%,slightlyabovethe34%fromlastyear,basedonourassessmentofthemarket.Thismodelwasbuiltwithinputfromatleasttenvendorsgivingusspecificrevenueguidance,inaddiHontothequalitaHveworkthatwedidtalkingtoendusersandgatheringinformaHonfromtheend-usersurvey.While2020maybea“pauseyear”inwhichgrowthslowsslightly,weseeitreacceleraHngin2021and2022aswemovetowardapervasivecloudworldintheglobalenterprise.

Forexample,wehadtotalSD-WANrevenueat$2Bin2020and$2.5Bin2021withrespecHveannualgrowthrates(fromthepreviousyear)of33%and20%.NowweareprojecHng$2Bin2020and$2.8B,whichwouldrepresentannualgrowthratesof33%and43%.WeareprojecHngrevenuegrowthtoconHnueataCAGR(four-yearrate)of34%unHl2023,whentheSD-WANmarkethits$4.6B.



4.TrendstoWatchin2020andBeyond

WhereisSD-WANgoingin2020?WeseeitintegraHngmoredeeplywithpubliccloudcontractsandservices,servingasaplagormfortheorchestraHonandhosHngofsecurityservices(SASE),andgrowinginitsroleasastrategicplagormformanagingenterprisenetworks.

Thesetrendsmaynotconvergeinanysingleproduct.SD-WANtechnologycoversalotofground,whichmaybewhythemarketisfilledwithsomanycompeHtors.ManySD-WANtechnologyplayersarepivoHngtorepresentstrengthsinspecificareasinordertoexpandtheiraddressablemarket.Inthepastfewmonths,newsannouncementshavehighlightedthistrend.Followingaresomeexamplesofwhatwehaveseenlately.

CloudSD-WANGoesPOP

OneofthestrongesttrendsinSD-WANisintegraHonwithmajorcloudproviderstobuildinterconnecHonandvirtualnetworkingfuncHonalityatspecificpointsofpresence.ThesePOPsarebecomingmoreimportanttothecloudacHon,asco-locaHonproviderssuchasEquinixandDigitalRealtybuildoutphysicalcloudlocaHonsclosertothecustomers.

Themajorcloudprovidersarealsobuildingouttheirinfrastructure,withmajorpresencesatc-locatedregionalPOPs,toenablefasteraccesstotheirclouds.Forexample,MicrosoOhasitsownWANinfrastructure,calledAzureVirtualWAN,whichmakesiteasierforSD-WANprovidersandenterprisestoconnectacrossthecloud.AmazonisbeefingupitspresenceinitsownRegionsstrategy–providingmoreinterconnecHonpointsandsoOwarePOPs.GoogleprovidesVirtualPrivateCloudinterconnectsinanexpandingfootprint.

AWShasincreaseditscloudconnecHvityviaintegraHontechnologiessuchasAWSTransitGateway,whichletscustomersconnecttheirAmazonVirtualPrivateClouds(VPCs)withenterpriseconnecHonpoints.SomeofthevendorsalreadysupporHngAWSVPCsincludeHPE'sAruba,Aviatrix,Cisco,Citrix,NuageNetworks,SilverPeak,andVersa.

TheeffortsofcloudHtanstoextendtheirenvironmentsforgreaterSD-WANaccessisevidentinthegrowthofcapitalspendingoverthelastthreeyears,asreportedinFuturiom’sCloudTrackerReport,June2020.



ManyoftheSD-WANplayersaretakingadvantageofthesePOPsandvirtualconnecHonpointstoenablecustomerstoinstantlybuildfar-reachingvirtualWANsthatconnectdirectlywithcloudservices.It'sclearthatintegraHngSD-WANtechnology,whichmanagesconnecHonstoenterprisehubsandbranches,withpubliccloudgatewayswillbeapowerfulconceptgoingforward.

HerearesomemoreexamplesofSD-WANintegraHonwithpublicclouds:SilverPeakrecentlyannouncedone-clickautomaHontopubliccloudworkloadsthatarehostedinMicrosoOAzureinfrastructure-as-a-service(IaaS)instances.CiscoandGooglerecentlyannouncedtheCiscoSD-WANCloudHubwithGoogleCloud,whichprovidersHghterintegraHonsbetweenCiscoandGoogleCloud.VMwareandMicrosoOofferajointsoluHontoimproveconnecHvitywithAzureVirtualWANfrombranchofficeandremotelocaHons.VMwareSD-WANbyVeloCloudenablescustomerstocreatevirtualcloudnetworkarchitecturethatconnectsallofthelocaHonstoAzure.CitrixhasbeenfocusingonintegraHngitsSD-WANwithMicrosoOOffice365toautomaHcallyandefficientlysteertraffictothenearestOffice365pointofentry.NuageishelpingemBriHshTelecom(BT)integrateintoAzure’svWANviaregionalvHUBs

SD-WANprovidersconHnuetoworkonbeherintegraHonswiththeleadingpubliccloudplagorms.MicrosoOprovidesalistofpartnersthatinclude12majorSD-WANproviders,allofwhicharecoveredinthisreport.MicrosoOhasalsostartedanOffice365cerHficaHonprogram.



Sofar,threeSD-WANvendorshavebeencerHfiedasmeeHngstandardsforenhancingdeliveryofOffice365performance:Citrix,NTT,andSilverPeak.FuturiomexpectsallthemajorSD-WANplayerstojumponboardthistrain,asOffice365isalargemarketandMicrosoOisbuildingamassivecloudinfrastructure.

ExpecttoseesimilarcerHficaHonprogramsinareassuchasunifiedcommunicaHonsas-a-service(UCaaS),whichbusinessvoiceanddatanetworkproviderWindstreamsayscomprises30%to40%ofitsSD-WANimplementaHons.Inanotherexample,Utah-basedSD-WANproviderFatPipehasbeenfocusingonUCaaS,recentlyreporHnghigh-performancemeasurementswhenFatPipe’splagormisintegratedwithservicesfromcloudproviderRingCentral.

SD-WANGetsSASEy

GartnerhasgohenalotmileagenamingthetrendofSD-WANandcloudsecurityconvergence,whichitcallsSASE.Thisconceptgainedmomentumin2020.SASEdefinesasub-trendinSD-WAN,whichisintegraHngSD-WANwithcloud-basedsecurityapplicaHons.

SomeoftheSD-WANvendorsarepushingSASEespeciallyhard.Forexample,CatoNetworksisposiHonedasoneoftheleadersfordeliveringsecuritysoluHonsdirectlyfromthecloud,recentlylayingclaimtobeingthefirstSD-WANvendortointegrateSIEM(securityinformaHonandeventmanagement)capabiliHesintoitscloud-basedSD-WANplagorm.VersaNetworkshasalsobeenveryaggressiveinpushingitsownsecuritystackthatcanrunfromboththecloudandonitsedgeSD-WANdevice,whichfollowstheSASEtheme.AndVMwareVeloCloudhasbeenpushingtheSASEthemewithitscloudgatewayapproachtodeliveringsecurity.VeloCloudhasalonglistofcloud-securitypartners,includingZscaler,CheckpointandNetskope.

SD-WANfortheMul5-CloudMovement

Ifyouputtwotrendstogether–morePOPsandmoreSASE–youhavetheoutlineforthefutureofITnetworkinginfrastructure.CloudarchitectswillsoonbeusingSD-WANtoconnecttomulHplecloudplagorms,andwiththeuseofAPIgatewaysandPOPinterfaces,therewillbeopportuniHestoprovideconnecHvityacrossmulHpleclouds.

Inoneexample,VersaNetworksinearlyDecemberannouncedthatitnowsupportsingressrouHnginAmazonvirtualprivateclouds,animportantsteptowardmulH-cloudnetworkingintegraHon.Nokia'sNuageNetworksdivision,whichhasastrongposiHonindata-centervirtualizaHonwithitsVirtualizedServicePlagorm(VSP),recentlyannounceditisusingitsSD-WAN2.0plagormtodelivermulH-cloudconnecHvitywithOmniClouds,acloudproviderthatwillhelpconnectmulHplepubliccloudsforcustomersintheMiddleEastandAfrica.AryakaNetworks'SmartServicesprovidesamanagedmulH-networkingserviceforpubliccloudsandsoOware-as-a-serviceproviders,includingMicrosoO,AWS,Oracle,andGoogle.



ThereisalsoanewcropofmulH-cloudnetworkingtechnologyproviders--suchasArrcus,Aviatrix,andPacketFabric--thatareworkingonthemorecomplexaspectsofrouHngandconnecHngnetworksacrossmulHpleclouds–andit’snothardtoseethesemarketscross-ferHlizinginthefuture.Forexample,AviatrixandSilverPeakhaveannouncedanSD-WANintegraHonpartnership.

Thetrendisprehyclear:Enterprisesareincreasinglylookingtoleveragetheinvestmentsofthemajorcloudproviders,essenHallyoutsourcingtheirITinfrastructure.Theyneednetworksthatcanbemoreeasilyconnected,managed,andsecuredacrossmulHplecloudnetworks.ThistrendwillgrowastheyconnectmoreSaaSapplicaHonsandbuildmulH-andhybrid-cloudarchitecturesindistributedenvironments.Anagileandmanageablevirtualnetworkisneededtoconnectalltheseelements,andSD-WANwillplayamajorrole.

Standardiza5onandtheMEF

Onethingthat'sinteresHngabouttheSD-WANmarketisthatitconsistsofalmostenHrelyproprietaryproductswithverylihlestandardizaHon.It’sinteresHngthatthiswasidenHfiedasabarriertomarketdevelopmentinoursurvey(seebelow).



Thisyear,communicaHonsindustrygroupMEFannouncedthefirstMEF-cerHfiedvendors,whichsofarhasincludedForHnet,NuageNetworks,VersaNetworks,andInfovista.ThecerHficaHonprocess,administeredbySpirentCommunicaHons,makessurethatvendorsadheretoalistoftheMEF'sSD-WANServiceAhributesandServices(MEF70).

ThefulldetailsoftheMEF70canbefoundhereontheMEFwebsite.Amongotherthings,MEF70defines:

ServiceahributesthatdescribetheexternallyvisiblebehaviorofanSD-WANserviceas

experiencedbythesubscriber.

Rulesassociatedwithhowtrafficishandled.

KeytechnicalconceptsanddefiniHonslikeanSD-WANUNI,theSD-WANEdge,SD-WAN

TunnelVirtualConnecHons,SD-WANVirtualConnecHonEndPoints,andUnderlay

ConnecHvityServices.

5.TheCompe55on:Strategies&Alliances

DuringthepastsixmonthstherehavebeenalotofinteresHngmovesintheSD-WANmarketas

thenumberofcompeHtorsgrows,theofferingsincreaseinbreadth,andthemarkettracHon

increases.It'salsointeresHngthatthereareseveraldifferentgroupsofSD-WANproviders

comingfromdifferentheritage.Let'stakealookatthesegroups.

NetworkingIncumbents

TTwooftheleadersintheenterpriserouHngmarket,CiscoandNokia,arealsoconsidered

leadersintheSD-WANmarket.CiscogottherethroughacquisiHon(Viptela),whileNokiagot

therethroughinternaldevelopmentinitsNuageNetworksvirtualizaHondivision.These

incumbentshaveseveraladvantages,includingopportuniHestoservetheirlargecustomer

basesbyupgradingexisHngroutersoOwarewithSD-WANmanagementandproviding

integraHonwithpolicy-basednetworkingandsoOware-definednetworking(SDN).Inthecaseof

Cisco,thismeansitsApplicaHonsCentricInfrastructure(ACI),andforNuage,VSP.


https://www.mef.net/Press-Releases/MEF-Publishes-Industrys-First-SD-WAN-Standard


Also,CiscohasbeenacHvelymarkeHngandsellingits4000ISRseries,coupledwithViptela,for

SD-WAN,whileNuageNetworkshasalineofopenCPEthatcanalsorunNokia’srouHng

soOware,ServiceRouHngOperaHngSystem(SROS).

TwootherlargenetworkingandcloudtechnologyincumbentstowatchincludeHPE,whichhas

developeditsowninternalSD-WANsoOwarethanisbeingintegratedwithitsArubawireless

devices,andJuniperNetworks,whichcanenableeitherJuniperSRXroutersoranSD-WANCPE

usingitsContrailorchestraHonsoOware.However,bothHPEandJuniperweresomewhatlateto

marketandarebehindCiscoandNuageintermsofcustomershipmentsandrevenue,according

toourchannelsurveysandindustrysources.

Virtualiza5onGoliaths

TwovirtualizaHongiants,VMwareandCitrix,areinvolvedintheSD-WANspace.VMwaregot

intotheSD-WANgamein2017withthepurchaseofVeloCloud,whichislookingsavvierover

Hme.NotonlyhasVMwareintegratedVeloCloud'sSD-WANbranchhardwareandsoOwarewith

itsNSXdata-centernetworkvirtualizaHonsoOware,butit'snowalsofocusedonintegraHng

securityfeaturessuchasmicro-segmentaHonandtheendpointsecuritytechnologyfromits

CarbonBlackacquisiHon.WerecentlyspoketoalargeVeloCloudcustomer(whichrequested

anonymity)thatisdeployingthousandsofVeloCloudendpointstoserveemployeesinaWFH

capacity.ByintegraHngwithNSXanditsvirtualizaHonsoOwareaswellastherecently

purchasedCarbonBlacksecurityporgolio,VMwarenowboastsanend-to-endsecuresoluHon

thatsolvesmanybranchnetworkingandsecuritychallenges.VMwareismajorityownedby

Dell,whichbundlesVeloCloudSD-WANsoOwarewithDellhardwareandsellsthroughits

channel.

CitrixisalsouniquelyposiHonedtointegrateawidevarietyofnetworkingandsecurityfeatures

withSD-WAN,includingaunifiedsoluHonforZTNAthroughitsWorkspacevirtualenvironment.



BymeldingacombinaHonofnetworkopHmizaHon,virtualizaHon,andsecurity,Citrixalso

presentsastrongcasetouseSD-WANasanend-to-endnetworkingoverlayinavirtualized

environment--astrongplayforlargercompanies.Citrixalsobenefitsfromstrongandlong

relaHonshipwithMicrosoOforHghterintegraHonwithMicrosoO.

CitrixalsoofferchoiceofsecurityintegraHonwithZscaler,PaloAltonetworks,Checkpointand

iBoss.CitrixSD-WANoffersaservicecalledCloudDirectthatprovidesaprivateoverlaynetwork

that’speereddirectlyto1000sofcloudsandSaaSprovider.

ThisCitrixserviceenablesQoS-enforced,enterprise-gradeaccesstocloudservicesformore

predictableservicereliability,resiliencyandanimproveduserexperienceforthefirstand

middlemiles.

FirewallPlayersGetintheGame

FirewallSecurityvendorsForHnetandPaloAltoNetworkshaverecognizedtheopportunityof

SD-WANandhavemadebiginvestments.

ForHnetaddedSD-WANfuncHonalitytoitsfirewallsin2016andhasaggressivelyincludedthe

technologywithmanyofitssecurityofferings.ItispursuingaSASEstrategybyintegraHngSD-

WANandNGFWcapabiliHestohelporganizaHonsreducecosts,enhanceapplicaHon

experience,simplifyoperaHons,andenablehighsecurityposture.PaloAltorecentlyacquired

SD-WANstartupCloudGenix,whichwasenjoyingaresurgenceasthemarketaccelerated.One

onlyneedstolookatForHnet'sstockpricetoseewhatthemarketthinksofthepotenHalof

couplingSD-WANwithitsownfirewalltechnology,basedonitsproprietaryapplicaHonsspecific

integratedcircuits(ASICs).

It’samarriageofconvenience,asfirewallsecuritytechnologyandSD-WANlookdesHnedtobe

anintegratedmarketoverHme.BarracudaNetworks,whichmarketstheFirewallF-Series,isyet

anotherfirewallsupplierthathasalsorecentlyaddedSD-WANfeatures.



TheNAASApproach

AryakaNetworksandCatoNetworksareuniqueintheSD-WANmarketinthattheyareafewof

theSD-WANstartupsusingafullnetwork-as-a-service(NAAS)approach.Thatmeanstheybuild

theirowntransportnetwork(inthecaseofAryaka)orIPtransitnetwork(inthecaseofCato).

AryakastartedwithafocusonglobalconnecHvityformulHnaHonalcompanies,andAryakasHll

likestosayitsfaciliHesarewithin30millisecondsof95%oftheworld’sbusinesses.

UnderrecentlynewCEOMahCarter,AryakahasbeefedupitssuiteofsecuritysoluHonsand

embeddeditsAryakaNetworkAccessPoint(ANAP)CPEdeviceswithmanagement,security,

analyHcs,networkopHmizaHon,andmulH-cloudfeatures.Aryakaalsopartnerswithsecurity

playerssuchasPaloAltoNetworks,Zscaler,andSymanteconbundledsecuritypackages.

CatoNetworkhasrecentlyjumpedonGartner'sSASEtrain,highlighHngitsfullyfeaturedcloud

securitysoluHon,whichcanhandleATP,endpointsecurity,andDDoSmiHgaHon.Thismakes

sensegiventhebackgroundofShlomoKramer,Cato'sfounder,whowasalsoafounderof

securitycompanyCheckPointaswellasImperva.Catohasbeensteadilyincreasingitsnetwork

POPs(recentlymorethan40)aswellassecurityfuncHonsandself-healingnetworking

funcHonality.



StrongStartupMarket

TheSD-WANmarkethasbeenstrongforstartups,withalreadythreemajoracquisiHons(Cisco/

Viptela,VMware/VeloCloud,andPaloAlto/CloudGenix).There’sgoingtobemore,asthereare

sHllseveralstrongindependentstartupsflourishinginthemarket.

SilverPeakandVersaNetworksprobablyhavethemostrevenueoftheremainingindependent

SD-WANproviders,accordingtooursurveys.Bothareattriple-digitmillionsinannualrevenue

runrateandarewellposiHonedtogrowasindependentcompaniesiftheychoosenottogothe

M&Apath.

SilverPeakandVersahavedifferentapproachestosecurity.VersahasdevelopeditsownnaHve

securitysuitethatcanbedeployedeitherfromthecloudorattheCPE,includingNGFW,

malwareprotecHon,URLandcontentfiltering,IPSandanH-virus,DDoSandVPN/next-

generaHonVPN.VersaalsorecentlyannouncedVersaSecureAccess,targetedatthered-hot

WFHmarket,highlighHngthefuncHonalityofSD-WANasanenterpriseandremoteVPN.Silver

Peakprovidesastatefulzone-basedfirewallandpartnerswithsecurityvendorsforsecurity,

bothinpremiseandcloud-delivered.TwoofSilverPeak’spartnersincludeCheckPointand

Zscalertointegrate"best-of-breed"securitysoluHonsforcustomers.Endusershaveregularly

spoketousfavorablyofSilverPeak’sease-of-useandorchestraHonfeatures,whichenables

themtodeployhundredsofsitesinashortperiodofHme(weeks).Citrixoffersahomeworker

andmicro-branchsmallformfactorplagormthatoffersintegrateddualLTEorLTEalongside

broadband.

OtherstartupstowatchincludeUtah-basedFatPipeNetworks,whichlikeSilverPeakevolved

outoftheWANopHmizaHonmarketbutnowhasafullyfeaturedSD-WANproductandastrong

partnershipwithAvayatodeploySD-WANforimprovedexperiencesintheUCaaSmarket.

Portland,Ore.-basedBigleafNetworksisanewerSD-WANstartupfocusingonsmalland

mediumbusiness(SMB).Bigleafgot$21millioninfundingin2019,andmanagementsaysthe

startuphastripleditsrecurringrevenueandemployeessince2018.



TheOthers

BeyondthedozenorsoSD-WANcompanieswehavemenHonedalready,therearedozens

more,whichwewouldputinthesecondHer.Riverbed,knownasastrongWANopHmizaHon

(“WAN-Opt”)vendor,wasslowerthanrivalSilverPeaktopivotawayfromtheslowingWAN-Opt

markettoanSD-WANproduct.ItrecentlyturnedtopartneringwithVersatobuildoutSD-WAN

funcHonality,whichisaninteresHngpartnershipthatcouldleverageRiverbed'sstrongchannel

andcustomerbase.

AdapHvNetworks,formerlyTELoIP,hasafootholdintheCanadianretailmarket.Itshardware

andsoOwarearedesignedtogiveretailersorSMBsasecureoverlayusingtheInternetvia

gatewaysandencrypHon.InfovistamarketstheIpanemaSD-WANtofocusonwhatitcalls

QualityofExperience(QoE),involvingservice-levelagreementsandapplicaHonflows.

EvenMoreOthers

What’sbeyondthatsecondHer?YetmoreSD-WANcompanies–perhapssomegemsthatwe

haveoverlooked.Someanalystandresearchfirmsreportthattherearemorethan40SD-WAN

vendorsinthemarketplace.Tobetruthful,weonlytrackabout20--andasthemarketmatures

andstartstoconsolidateit'sareasonableconclusionthatnotall40willsurvive.Butifyouthink

thereareothergreatSD-WANstartupswehavemissed,besureandletusknow.


PrimoProMarketTrendReport-June2020

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