Global SD-WAN market rose 35% in 2021

The SD-WAN market expanded by 35% in 2021 and achieved record revenue of over $2 billion, according to a Dell’Oro Group report published Wednesday.  

Eight vendors made up over 80% of SD-WAN market revenue in 2021. Cisco took the top spot for the entirety of 2021, followed by Fortinet, VMware, Versa and HPE, respectively.

"Demand for SD-WAN solutions picked up in 2021, as enterprises continued to optimize their branch network architectures for the cloud services and workloads they are implementing," said Shin Umeda, VP at Dell’Oro Group, in a statement. Umeda attributed the demand to the pandemic, which drove companies to evaluate and adopt SD-WAN for a more distributed work force. 

The report also highlighted that the convergence of SD-WAN and network security technologies, otherwise known as secure access service edge (SASE), is used by many vendors to differentiate their SD-WAN solutions. 

“Some vendors market SD-WAN as part of a larger networking portfolio — hardware and software — that addresses campus, data center wireless and branch infrastructures,” Umeda told Fierce.

These vendors may offer their own security technologies or may partner with security vendors to deliver SASE solutions. Companies that take this approach, such as Cisco and Huawei, “generally don’t market themselves as SASE vendors,” he said. 

Umeda attributed Cisco taking first place on account of the company having the largest branch networking installed base, when measured by enterprise-class access router sales. Established customer relationships has helped Cisco transition its hardware-based infrastructure to software-based SD-WAN solutions.  

In 2021, Cisco held over 70% of market shares in legacy access routing, although that market is declining as users shift to SD-WAN. Cisco also partnered with AT&T last year, operating as a security management solution to optimize AT&T’s network for multi-cloud and hybrid work environments. 

Fortinet, a company that emphasizes security solutions, used its experience with firewalls to successfully penetrate the SD-WAN market. By integrating routing and SD-WAN functionality into its firewall portfolio, Fortinet leveraged its footprint in branch locations to displace the networking gear of other vendors, said Umeda. 

Another advantage of Fortinet is that it doesn’t charge a separate fee for SD-WAN functionality in its subscription services. 

The top five SD-WAN vendors made up 65% of market revenue in 2021, but no single vendor held over an 18% share, Umeda concluded. These five vendors held the same 65% share in 2020.