Published on IHS Online Newsroom (ht t p://news.ihsmarkit .

com) on 11/15/17 8:02 am EST

SD-WAN Market a Two-horse Race Between Cisco and

VMWare, IHS Markit Says
Release Date:
Wednesday, November 15, 2017 8:02 am EST

T erms:
Technology

Dateline City:
LONDON

Contacts:
Colleen Seery

VMware and Cisco acquire SD-WAN market share leaders, vie for top
spot
LONDON (November 15, 2017) – Consolidat ion and acquisit ions are underway in t he soft ware-defined wide area net work
(SD-WAN) market as vendors race t o include SD-WAN t echnology in t heir offerings. Following Cisco’s acquisit ion of Vipt ela,
VMware carried out it s own acquisit ion of VeloCloud, t he SD-WAN revenue leader in t he first half of 2017, for an undisclosed
amount .

“VMware and Cisco have acquired t he t wo SD-WAN market share leaders, making t he SD-WAN market a t wo-horse race for
t he number-one spot ,” said Cliff Grossner, senior research direct or and advisor for cloud and dat a cent er at IHS Markit
(Nasdaq: INFO), a world leader in crit ical informat ion, analyt ics and solut ions. “And we could see even more consolidat ion as
vendors set out t o add SD‑WAN t o t heir capabilit y set s, especially since t he t echnology is key t o support ing connect ivit y in
t he mult i-clouds t hat ent erprises are building.”

According t o t he IHS Markit Dat a Cent er and Ent erprise SDN Hardware and Soft ware Biannual Market Tracker, SD-WAN is
current ly a small market , t ot aling just $137 million worldwide in t he first half of 2017 (H1 2017). However, global SD-WAN
hardware and soft ware revenue is forecast t o reach $3.3 billion by 2021 as service providers part ner wit h SD-WAN vendors t o
deploy overlay solut ions — and as virt ual net work funct ion (VNF)–based solut ions become more closely int egrat ed wit h
carrier operat ions support syst ems (OSS) and business support syst ems (BSS).

“Current ly, t he majorit y of SD-WAN revenue is from appliances, wit h early deployment s focused on rolling out devices at
branch offices,” Grossner said. “Moving forward, we expect a larger port ion of SD-WAN revenue t o come from cont rol and
management soft ware as users increasingly adopt applicat ion visibilit y and analyt ics services.”

More highlight s from t he IHS Markit dat a cent er and ent erprise SDN report :

Globally, dat a cent er and ent erprise soft ware-defined net working (SDN) revenue for in-use SDN-capable Et hernet
swit ches, SDN cont rollers and SD-WAN increased 5.4 percent in H1 2017 from H2 2016, t o $1.93 billion
Based on in-use SDN revenue, Cisco was t he number-one market share leader in t he SDN market in H1 2017, followed
by Arist a, Whit e Box, VMware and Hewlet t Packard Ent erprise
Looking at t he individual SDN cat egories in H1 2017, Whit e Box was t he front runner in bare met al swit ch revenue,
VMware led t he SDN cont roller market segment , Dell held 45 percent of branded bare met al swit ch revenue and
Hewlet t Packard Ent erprise had t he largest share of t ot al SDN-capable (in-use and not -in-use) branded Et hernet swit ch
port s

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