SD-WAN Sales Will Hit $2.2B by 2022, Dell’Oro Group Says

SD-WAN is soaring in popularity and sales of the technology will hit $2.2 billion by 2022, which equates to a 35 percent compounded annual growth rate (CAGR), according to the latest SD-WAN study by Dell’Oro Group. The report also said that revenue from software components, such as the controller and virtual network functions (VNFs), will grow twice as fast as hardware components. Dell’Oro estimates that SD-WAN software revenue will grow at a 41 percent CAGR during the next five years compared to hardware revenue that will grow at a 21 percent CAGR. Enterprises will account for the majority of the SD-WAN business as companiesdeploy and manage their own SD-WAN offerings or use value-added reseller or systems integrators to help them with their SD-WAN. However, service provider managed SD-WAN services will grow at a faster rate. Dell’Oro estimates the service provider SD-WAN business will grow at an average annual rate of 40 percent over the next five years. Interestingly, Dell’Oro said that two major acquisitions of SD-WAN players last year —Cisco’s $610 million purchase of Viptela in May and VMare’s purchase of VeloCloud in November — are causing a bit of a slowdown in the market. The report said that potential customers are delaying their SD-WAN purchases while they wait to figure out how the acquiring companies will integrate SD-WAN into their product portfolios. But the research firm said that this slowdown will likely subside in the second half of the year as the integration plans become clearer.