Cloud service providers to offer SD-WAN, and telcos hedge their bets by choosing multiple SD-WAN vendors.  SD-WAN (appliance + control and management software) revenue reached $284M in 3Q18, up 23% QoQ.  VMware led the SD-WAN market with 19% share of 3Q18 revenue, Cisco moves into second with 13% revenue share, and Aryaka is in close third, according to the DC Network Equipment market tracker early edition from IHS Markit by Cliff Grossner, PhD.

In 3Q18, VMware and Azure announced an SD-WAN partnership worth closer scrutiny, as Azure wants to offer backbone connectivity as part of its service, allowing customers to “exit” to the Internet at different points of presence. This means Azure DCs are no longer only an end point, potentially making Azure competitive with other global networking providers.

Citrix, Versa Networks and Riverbed also announced availability of their SD-WAN offerings via Azure and AWS. Oracle took this one step further by stating its intent to acquire Talari Networks to enable greater connectivity to its Oracle Cloud offering; it also integrated Aryaka’s SD-WAN capabilities, giving its enterprise customers a choice of SD-WAN provider

“Cloud service providers have begun to realize the importance of bundling SD-WAN as part of a cloud service, ensuring a positive user experience when utilizing SaaS-based applications such as Office 365 or while migrating workloads to AWS or Microsoft Azure.”said Cliff Grossner, senior research director and advisor for cloud and data center at IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

“Although the SD-WAN market is maturing, we still see a plethora of SD-WAN vendors in the market, and carriers are beginning to show concerns that when integrating an SD-WAN vendor into their network, there is a risk the SD-WAN vendor could be acquired or drastically change offerings in a year. As a result, carriers are selecting multiple SD-WAN vendors, creating frustration and integration complexity when there is a lack of interoperability with carrier APIs” said Josh Bancroft, senior research analyst at IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

More Data Center Network Market Highlights

·         3Q18 ADC revenue increased 2% from 2Q18 to $457M and declined 3% from 3Q17

·          Virtual ADC appliances stood at 34% of 3Q18 ADC revenue

·          F5 garnered 49% ADC market share in 3Q18 with revenue up 4% YoY. Citrix had the #2 spot with 26% of revenue, and A10 (8%) rounded out the top 3 market share spots.

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 2022, 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, Cato, Dell, F5, FatPipe, Fortinet, HPE, Huawei, Hughes, InfoVista, Juniper, KEMP, Nokia (Nuage), Radware, Riverbed, Silver Peak, Talari, TELoIP, VMware, Versa, ZTE and others.