What Gartner’s Andrew Lerner thinks about SD-WAN in 2016

In a December 2015 blog post, Gartner analyst Andrew Lerner sized up the then-current state of software defined WAN adoption, and he foresaw a bright future for this fresh approach to networking. He is not alone in this respect: Cliff Grossner of IHS revealed a similar outlook last June, based on a survey of 145 North American businesses that found that almost half of them (45 percent specifically) planned to invest more in SD-WAN technologies over the next two years.

There are plenty of well-founded reasons for this widespread optimism about SD-WAN:

  • Enterprises are taking up more SaaS solutions and other types of cloud services.
  • As a result, the traditional WAN model – i.e., involving branch offices that connect back to a main office that serves as a giant gateway to the Internet – is beginning to break down.
  • Real-time applications like VoIP and videoconferencing are also superseding legacy telephony systems and demanding top-notch network performance.
  • Broadband Internet is more appealing than ever as an alternative or complement to expensive MPLS capacity, especially since it can now be efficiently managed through an SD-WAN appliance.
  • SD-WAN promises a comprehensive, cost-effective answer to the question of “How can we ensure that our WAN can handle today’s most important business applications?”

Let’s look at Lerner’s predictions about SD-WAN in particular to understand these trends in context and what they might translate into, in terms of future market size. We’ll go through them one at a time and provide a few thoughts on each.

Prediction #1: SD-WAN uptake will reach 30 percent of enterprises by 2019

Our take: This claim, based on previous Gartner research, is bold but supportable. At the end of 2015, SD-WAN adoption was still pretty modest, at less than 1 percent of all enterprises by Lerner’s estimates, meaning that there is plenty of headroom for growth. Plus, SD-WAN deployment is a high-reward/low-risk undertaking: Lerner explained that it is relatively easy to set up an SD-WAN pilot program at a single branch location before expanding it to the rest of the network. Many organizations will likely find the cost and reliability benefits of SD-WAN so compelling that they eventually go all-in.

“There is plenty of headroom for growth for SD-WAN.”

Prediction #2: The SD-WAN vendor market will both expand and contract in the next five years

Our take: Gartner seems to be playing it safe with this prediction, although we can see why they took this stance. SD-WAN is a new frontier, and as such it is being contested by many competitors – from startups to legacy vendors and everyone in between – with no clear leader just yet. The state of SD-WAN in 2015 is comparable to that of PC operating systems in the early 1980s (before the dominance of Windows), or of e-commerce sites in the late 1990s (prior to Amazon really hitting its stride). So in the years ahead, we expect many companies to initially vie for customers’ attention before consolidation takes root.

Prediction #3: SD-WAN solutions will need to prove their scalability to enterprises

Our take: We agree that SD-WAN vendors have to do their homework in order to sell their solutions to enterprises. There are plenty of bases to cover with an SD-WAN platform, including support for cloud services, robust security and scalability across large deployments. Since SD-WANs, unlike traditional WANs, consider the needs of each application before making packet forwarding decisions, there has been some concern that they cannot scale. But as Ethan Banks, co-host of the Packet Pushers podcast, wrote on his personal blog, an SD-WAN does not have to achieve infinite scale; it simply needs to “replace traditional routing in a specific WAN cloud.”

SD-WAN must support cloud services such as SaaS applications.

SD-WAN must support cloud services such as SaaS applications.

Overall, Lerner and the rest of Gartner – along with the analysts at IHS we mentioned earlier – have a fairly reasonable outlook for where the SD-WAN world is heading in the near future. It is still the early days for SD-WAN, and as such we can expect fast growth, plenty of competition and an ongoing focus on shoring up scalability, security, etc. over the next few years. Ultimately, by 2020 we could see an SD-WAN market worth $7.5 billion, according to numbers from the Rayno Report.

Categories: Software Defined WAN (SD-WAN)


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