Spending on software-defined WAN products will rise from $129 million in 2016 to $1.24 billion in 2020. This forecast is Gartner's initial effort to quantify the impact of SD-WAN sales on the enterprise branch office router market.
Table of Contents
Key Business Drivers
Enterprise Network Equipment Market Model: Forecast Components, Influencing Factors and Connections
Branch Office Routing Forecast
Vendor Landscape — Everybody Wants In
Opportunity — SD-WAN Presents an Opportunity to Shift Consumption Model for WAN Edge Infrastructure
SD-WAN Use Cases (and Misses)
Ample Opportunity for Differentiation
Case Study — Retail Firm
In order to improve performance for all applications, including cloud resident, and to better manage WAN capital expenditure (capex) and operating expenditure (opex), enterprises are adopting a new approach to building and operating their WANs. Software-defined WAN (SD-WAN) is a new approach to support branch office connectivity in a simplified and cost-effective manner.
While WAN architectures and technologies tend to evolve at a very slow pace — perhaps a new generation every 10 to 15 years — the disruptions caused by the transformation to digital business models are driving adoption of SD-WAN at a pace that is unheard of in wide-area networking.
SD-WAN is a highly disruptive force that is dramatically reshaping the enterprise router market, with enterprise spending on SD-WAN growing at a compound annual growth rate (CAGR) of 76.2% from 2016 through 2020.
SD-WAN revenue will grow at the expense of traditional routers and by capturing funds that would have been spent on WAN optimization controllers, firewalls and MPLS services.
The overall branch office router market will experience a CAGR of negative 6.3%, and the legacy router segment will suffer a negative 28.1% CAGR over the forecast period.
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