High-Tech Tuesday Webinar: SD-WAN Forecast and Opportunity — How SD-WAN Will Disrupt the Router Market

Archived Published: 05 December 2016 ID: G00320001


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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

Defining SD-WAN

SD-WAN Adoption

Key Business Drivers

Enterprise Network Equipment Market Model: Forecast Components, Influencing Factors and Connections

Branch Office Routing Forecast

Key Assumptions

Key Impacts

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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Evidence for this document was obtained from Gartner client inquiries (via GEAR — with over 200 end-user inquiries) and from vendor-supplied revenue/customer data.

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