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24 Mar 2016

IDC Forecasts Strong Growth for Software-Defined WAN As Enterprises Seek to Optimize Their Cloud Strategies

SD-WAN Technology and Services Market Poised to Reach $6 billion by 2020

FRAMINGHAM, Mass., March 24, 2016 – Software-defined networking has already arrived in the datacenter, providing the agility and responsiveness that datacenter networks need to meet the demands of cloud computing. Now the focus is shifting toward wide area networks (WANs), which can also be optimized to meet the requirements of cloud applications and services. In its first forecast of the software-defined wide area network (SD-WAN) market, International Data Corporation (IDC) estimates that worldwide SD-WAN revenues will exceed $6 billion in 2020 with a compound annual growth rate (CAGR) of more than 90% over the 2015-2020 forecast period.

The emergence of SD-WAN is a relatively recent market development, preceded by the existence of hybrid WAN architectures. SD-WANs leverage these hybrid WANs, but incorporate a centralized, application-based policy controller, analytics for application and network visibility, a software overlay that abstracts underlying networks, and an optional SD-WAN forwarder that together provides intelligent path selection across WAN links.

The benefits of SD-WAN include cost-effective delivery of business applications, meeting the evolving operational requirements of the modern branch/remote site, optimizing software-as-a-service (SaaS) and cloud-based services such as UC&C, and improving branch-IT efficiency through automation.

"As public and private cloud use continues to grow, WAN performance becomes critical to latency-sensitive and mission-critical workloads and inter-datacenter business continuity," said Rohit Mehra, Vice President, Network Infrastructure at IDC. "Accordingly, as enterprises plan and implement comprehensive cloud strategies, WAN architectures need to be considered alongside, and in conjunction with, datacenter infrastructure. Moreover, as enterprises move business processes to the cloud, there is a greater need to fully integrate cloud-sourced services into WAN environments to ensure workload/application performance, availability, and security."

IDC believes that SD-WAN's value proposition – predicated on the growth of cloud computing, the need for simplified virtual private network (VPN) capabilities, and the business imperative of reducing MPLS costs – will be compelling for a growing number of enterprise customers seeking to provide cost-effective cloud-era networking to branch offices and remote sites. This view is supported by recent US survey data that shows nearly half of enterprises planning to consider migration to SD-WAN over the next two years. Accordingly, IDC forecasts that SD-WAN revenue will start to ramp strongly in 2016 and 2017 across a range of vertical markets.

The IDC report, Cloud and Drive for WAN Efficiencies Power Move to SD-WAN (Doc #US41101416), evaluates the market potential of SD-WAN solutions, including products (hardware/software) and services (CSP, MSP, and cloud managed). In addition to a five-year forecast for SD-WAN products and services, the report includes technology and market status updates, business drivers for SD-WAN, and market and technology segmentation.

To learn more about how software-defined networking and network virtualization, including SD-WAN, are making their way across the enterprise, join Rohit Mehra and IDC's enterprise communications and datacenter network analysts for a special briefing and breakfast at Interop Las Vegas on Wednesday, May 4, 2016 at the Mandalay Bay Convention Center (Mandalay Bay L) from 7:15 a.m. to 8:30 a.m. Event details and registration can be found at

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For more information, contact:

Michael Shirer

Brad Casemore

Rohit Mehra