Interop: SDN Growing to $12.5B, SD-WAN to $6B

LAS VEGAS – At IDC’s annual breakfast meeting at the Interop conference here, analysts outlined the vast potential for digital transformation and growth that modern networking will enable.

“There is a lot going on in networking,” IDC analyst Rohit Mehra said, kicking off the session.

With Software Defined Networking (SDN), Software Defined Wide Area Networks (SD-WAN), Network Function Virtualization (NFV) and the overall disaggregation of networking from hardware, IDC’s view is that now is an exciting time for networking.

That excitement isn’t just an idea, either. It is a tangible reality with attached revenues. For the nascent market for SD-WAN, IDC is forecasting $6 billion revenue by 2020. According to IDC, nearly 70 percent of enterprises expect to use SD-WAN in the next 18 months.

For the SDN market, IDC is now forecasting $12.5 billion revenue by 2020. For both segments, Mehra emphasized that IDC is forecasting “pretty aggressive” Compound Annual Growth Rates (CAGR).

At the 2015 IDC Interop breakfast meeting, the analyst firm forecast that the SDN market would reach $8 billion in revenue by 2018. Back in 2012, IDC forecast SDN to generate $3.7 billion by 2016.

From a macro perspective, IDC sees the emerging world for the Internet of Things (IoT) to be the largest opportunity on the horizon, generating a staggering $1.46 trillion in revenues by 2020.

IDC is also seeing growth in both private and public cloud networking related revenues, which will have an impact on enterprise data centers. Brad Casemore, Director of Datacenter Networking at IDC, noted that from a data center networking perspective, innovations in public cloud, from containers to disaggregation, are finding their way to the broader market. One such area is the growth of ODM (original device manufacturers), which are increasingly making inroads in the public cloud switching market.

For public cloud providers, Casemore noted that they have to change their entire data center environment, since it is their business and will have a direct impact on the bottom line. When it comes to SDN, Casemore sees it as being a key driver in the enterprise for increasing server virtualization and adoption of the cloud.

Open-source networking is also seen as being very important now and in the future. Casemore noted that the open source community really does count and will decide winners and losers. He suggests that vendors integrate with open source where appropriate and focus on areas where they can add value and differentiate.

“Open source is not just at the bottom of the networking stack, it now goes from layer 2 all the way up to network and security services,” Casemore said. “It’s a significant fact in the market landscape and vendors have to give it due consideration.”

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and Follow him on Twitter @TechJournalist.

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