IHS Markit: SD-WAN revenue = $162M in 1Q2018; MEF to Define SD-WAN Service
IHS Markit SD-WAN Revenue Report:
by Cliff Grossner, PhD, Senior Research Director and Advisor at IHS Markit
SD-WAN (appliance + control and management software) revenue reached $162M in 1Q18, up 12% QoQ and 2.3x over 1Q2017. VMware (after its VeloCloud acquisition) led the SD-WAN market with 19% share of 1Q2018 revenue, Aryaka was in second place with 18% revenue share, and Silver Peak rounded out the top 3 with 12%, according to the DC Network Equipment market tracker early edition from IHS Markit.
“SD-WAN is currently a maturing market, expected to reach $861M worldwide in 2018, as early adopters of SD-WAN are expanding existing deployments, having proved the SD-WAN business case. Adoption of SD-WAN is now ramping even in compliance-sensitive verticals such as healthcare and financial (the payment card industry),” said Cliff Grossner Ph.D., senior research director and advisor for cloud and data center at IHS Markit.
Worldwide SD-WAN revenue |
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|
Revenue (US$M) |
% Change |
||||
|
|
|
1Q18 |
|||
VMware |
N/A |
$31.6 |
N/A |
|||
VeloCloud |
$26.8 |
N/A |
N/A |
|||
Aryaka |
$24.4 |
$29.1 |
19% |
|||
Silver Peak |
$17.6 |
$20.2 |
15% |
|||
Cisco |
$15.6 |
$19.5 |
25% |
|||
InfoVista |
$12.3 |
$9.6 |
-22% |
|||
Citrix |
$6.0 |
$7.1 |
18% |
|||
Talari |
$5.4 |
$5.9 |
9% |
|||
FatPipe |
$4.5 |
$4.3 |
-5% |
|||
Riverbed |
$2.5 |
$3.2 |
26% |
|||
CloudGenix |
$2.5 |
$2.5 |
0% |
|||
Huawei |
$3.3 |
$1.8 |
-45% |
|||
ZTE |
$0.7 |
$1.1 |
53% |
|||
Other |
$23.2 |
$26.2 |
13% |
|||
Total SD-WAN |
$145.0 |
$162.1 |
12% |
|||
Source: IHS Markit © 2018 IHS Markit |
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“Many SD-WAN vendors have begun to incorporate analytics, utilizing rich telemetry data, into SD-WAN management platforms–enabling enterprises to monitor application traffic flow between multi-cloud environments,” said Grossner.
More Data Center Network Market Highlights
· F5 garnered 46% ADC market share in 1Q18 with revenue up 4% QoQ. Citrix had the #2 spot with 29% of revenue, and A10 (9%) rounded out the top 3 market share spots.
· 1Q18 ADC revenue declined 4% from 4Q17 to $453M and declined 4% over 1Q17
· Virtual ADC appliances stood at 31% of 1Q18 ADC revenue
Data Center Network Equipment Report Synopsis
The IHS Markit Data Center Network Equipment market tracker is part of the Data Center Networks Intelligence Service and provides quarterly worldwide and regional market size, vendor market share, forecasts through 2021, analysis and trends for (1) data center Ethernet switches by category [purpose built, bare metal, blade and general purpose], port speed [1/10/25/40/50/100/200/400GE] and market segment [enterprise, telco and cloud service provider], (2) application delivery controllers by category [hardware-based appliance, virtual appliance], and (3) software-defined WAN (SD-WAN) [appliances and control and management software]. Vendors tracked include A10, ALE, Arista, Array Networks, Aryaka, Barracuda, Cisco, Citrix, CloudGenix, CradlePoint, Dell, F5, FatPipe, HPE, Huawei, Hughes, InfoVista, Juniper, KEMP, Nokia (Nuage), Radware, Riverbed, Silver Peak, Talari, TELoIP, VMware, ZTE and others.
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MEF to define SD-WAN service:
by Alan J Weissberger
The Metro Ethernet Forum is working on a common definition for SSD-WANs and is building out multivendor SD-WAN use cases.
- MEF is creating a SD-WAN service specification that will outline the required SD WAN components, such as application-centric quality of service and priority policy requirements.
- MEF’s Multi-Vendor SD-WAN Implementation project is one of the real-world results of the MEF 3.0 framework that was announced at MEF 17 in November. MEF 3.0 is a transformation framework for defining, delivering and certifying agile, assured and orchestrated network services across a global ecosystem of automated networks.
While SD-WAN has earned buzzword status across the telecoms industry, a lot of different offerings are available in the marketplace from a host of vendors. Currently, there are no clear definitions of what an SD-WAN service is.
MEF members are collaborating to develop an SD-WAN service specification that defines the service components, their attributes, and application-centric QoS, security, and business priority policy requirements to create SD-WAN services. This initiative is led by Riverbed and VeloCloud, now part of VMware, with major contributions from Fujitsu.
MEF is using the same blueprint that it successfully deployed when it defined Carrier Ethernet services 10 years ago—which led to the creation of an estimated $80 billion global market for Carrier Ethernet—to create the SD-WAN service definition specification.
“The significance of this work is that if you look at what MEF has done for the initial carrier Ethernet definition before that came out there were many, many different implantations,” said Ralph Santitoro, head of SDN/NFV/SD-WAN solutions for Fujitsu.
“You weren’t really sure what you were buying. The SD-WAN service market today is in exactly that same kind of state where you can go to different service providers and get an SD-WAN service but it’s apples to oranges to peaches and whatever, but it’s all different because there is no industry standard.
“The MEF is really the only organization in the industry that is actually putting a stake in the ground by defining what an SD-WAN service is.”
MEF hopes to have the specification finished ahead of its MEF 18 conference in October. When the specification is finished, MEF said it would pave the way for MEF 3.0 work on its Lifecycle Service Orchestration (LSO), MEF information models, policy-driven orchestration, intent, and other major projects that could be applied to SD-WAN services. All of those SD-WAN elements would then be integrated into the MEF 3.0 ecosystem to help service providers increase their automation efforts.
MEF’s Implementation Project features managed SD-WAN use cases that were driven by MEF’s membership that includes service providers. Because of mergers and acquisitions, service providers are faced with an increasing number of interoperability challenges where they need to support more than one SD-WAN solution.
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IHS Markit: 32 percent year-over-year rise in data center server revenue
Richer server configurations, supported by new compute and memory-intensive workloads, led to a 32 percent year-over-year increase in data center server revenue, which hit $17.9 billion in the first quarter of 2018. After three consecutive quarters of growth, average memory prices started to stabilize in the first quarter, but compute and data-intensive workloads kept server prices 20 percent higher than the previous year’s first quarter.
Server shipments grew ahead of seasonality in the first quarter, growing 10 percent over the first quarter of 2017. It was also the first time density-optimized blade servers out-shipped shared-resource blade servers. In fact, nearly every vendor offering density-optimized blades reported soaring demand from cloud service providers (CSPs).
Demand for open-compute and white-box rack servers also continued to drive a form-factor transition in the data center server market. “As in the past, server vendors offered new products targeted at telcos, with Open Compute Project servers taking center stage,” said Cliff Grossner, Ph.D., senior research director, IHS Markit.
The overall dynamics affecting the market include a growing need for additional compute power, as more smartphone users connect in developing countries, and as 54.5 billion more devices are introduced in the following vertical markets: automotive and transportation, commercial and industrial electronics, communications, computers, consumer and medical. “The data center server equipment market will continue to grow through 2022, as worldwide demand for compute outstrips growth in central processing unit compute capacity and as efficiency gains from server multi-tenancy begin to slow,” said Vladimir Galabov, senior analyst, IHS Markit.
“Machine learning, artificial intelligence and other new software technologies will continue to drive the development of new server architectures, bolstering the market for specialized processors capable of high degrees of parallelism,” Galabov said. “However, as the limits of silicon are being reached, we can expect the intensive search for alternative materials to open new markets.”
Huawei’s SD-WAN revenue took a hit with only $1.8 million in revenue in quarter one, down 45% compared to quarter four, according to this new IHS Markit report on SD-WAN market.
According to the market research report published by P&S Market Research, global SD-WAN market is expected to reach $9,691.0 million by 2023, the demand for cost effective WAN management solutions, increasing adoption of cloud technologies, need for simplified network architecture, end-to-end network security and visibility are driving the market globally.
Based on appliances, the SD-WAN market is categorized into virtual, physical and hybrid appliances. Virtual appliance accounted for largest revenue share in the market in 2017. During the forecast period, it will continue to contribute largest revenue share owing to the fact that it reduces the cost incurred in installation and offers configuration and maintenance of complex stack of software virtually.
Based on the industry, it is segmented into IT & telecom, banking, financial services and insurance (BFSI), government, healthcare and others, where “others” include defense, retail and manufacturing industry. The IT & telecom accounted for nearly 40% revenue of the SD-WAN market in 2017, owing to the evolving telecommunications and information technology, and demand for greater bandwidth for high performance applications.
The Asia-Pacific (APAC) SD-WAN market is expected to witness a CAGR of 57.9% during the forecast period. Since the internet speed and internet quality have significantly improved in the region, IT departments are looking for cost effective, secure, performance related solutions to reduce their dependency on multi-protocol label switching (MPLS). Organizations in the IT and telecom industry in the region are focusing on agile, secure, and end-to-end visible WAN management solution, which will support the market growth in future.
Players in the SD-WAN market are focusing on developing simplified network architecture with enhanced features such as privacy and visibility, which will help in monitoring and measuring network traffic, providing deep visibility to IT department into WAN, and allowing them to quickly pinpoint a security attack.
Some of the key players operating in the market are Cisco Systems, Inc, Citrix Systems, Inc, Silver Peak Systems Inc, CloudGenix Inc, Ecessa Corporation, Viptela Inc, Riverbed Technology, Inc, Mushroom Networks, Inc, VeloCloud networks Inc, Glue Networks Inc, Elfiq Inc.
https://globenewswire.com/news-release/2018/05/29/1512915/0/en/SD-WAN-Market-Size-is-Projected-to-Reach-9-691-Million-by-2023-P-S-Market-Research.html
Cisco Virtual Networking Index report: Enterprise SD-WAN growth will increase five-fold by 2022
https://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/white-paper-c11-741490.html
https://www.fiercetelecom.com/telecom/cisco-virtual-networking-index-report-enterprise-sd-wan-will-bury-mpls-by-2022