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Cisco, VMware deemed SD-WAN market leaders: IHS Markit

Cisco and VMware deepen rivalry with acquisitions

Cisco and VMware were deemed the leaders in the software-defined wide area networking (SD-WAN) market in a recent IHS Markit report.

According to IHS Markit’s Data Center and Enterprise SDN Hardware and Software Biannual Market Tracker, SD-WAN is a small market at $137 million in global revenue for the first half of 2017. However, the market is expected to reach $3.3 billion by 2020 as service providers increasingly partner with vendors to launch overlay systems.

VMware and Cisco have been long-time rivals. VMware announced earlier this month it intends to acquire VeloCloud, a startup making a name for itself in the SD-WAN market. The acquisition deepened the rivalry between VMware and Cisco, which purchased VeloCloud competitor Viptela for $610 million in May.

“VMware and Cisco have acquired the two SD-WAN market share leaders, making the SD-WAN market a two-horse race for the number-one spot,” said Cliff Grossner, senior research director and advisor for cloud and data center at IHS Markit. “And we could see even more consolidation as vendors set out to add SD-WAN to their capability sets, especially since the technology is key to supporting connectivity in the multi-clouds that enterprises are building.”

VMware has been Cisco’s foremost competitor in the SDN market and now, with its acquisition of VeloCloud, the SD-WAN market. Consequently, the companies are in a constant tug of war while trying to outmatch each other’s platform. Last October, for example, Cisco announced it was entering a hybrid cloud partnership with Google, squaring itself directly against VMware Cloud on Amazon Web Services (AWS).

“Currently, the majority of SD-WAN revenue is from appliances, with early deployments focused on rolling out devices at branch offices,” added Grossner. “Moving forward, we expect a larger portion of SD-WAN revenue to come from control and management software as users increasingly adopt application visibility and analytics services.”

The report also discovered global data center and enterprise SDN revenue for in-use SDN-cable, Ethernet switches, SDN controller and SD-WAN rose 5.4% in the first quarter of 2017 compared to last year. With respect to individual SDN categories in the first quarter of 2017, White Box spearheaded bare metal switch revenue, VMware led the SDN controller segment market and Dell held 45% of branded bare metal switch revenue. Hewlett Packard Enterprise (HPE) had the biggest share of total SDN-capable branded Ethernet switch ports, both in-use and not-in-use.

ABOUT AUTHOR

Nathan Cranford
Nathan Cranford
Nathan Cranford joined RCR Wireless News as a Technology Writer in 2017. Prior to his current position, he served as a content producer for GateHouse Media, and as a freelance science and tech reporter. His work has been published by a myriad of news outlets, including COEUS Magazine, dailyRx News, The Oklahoma Daily, Texas Writers Journal and VETTA Magazine. Nathan earned a bachelor’s from the University of Oklahoma in 2013. He lives in Austin, Texas.