The SD-WAN market generated $116 million in revenue during the third quarter of 2017, according to research firm IHS Markit.
SD-WAN, or software-defined wide area network, technology aims to help organizations replace legacy MPLS and dedicated private connectivity technologies with aggregated public internet links that provide both cost and operational efficiencies.
According to IHS Markit, the SD-WAN market revenue grew by 2.8x year-over-year in the third quarter. The top vendor by revenue was VeloCloud with $26 million in revenue, representing a 22 percent market share. VeloCloud was acquired by VMware in a deal that was first announced on Nov. 2.
In second place is Aryaka with $21.3 million in revenue, followed by Silver Peak in third at $14.1 million.
"Delivering SD-WAN as a service also appeals to our global clients because they want to consume SD-WAN instead of constructing networks, much like they are consuming cloud services today," Shawn Farshchi, president and CEO of Aryaka, stated. "Our solid differentiation is why Aryaka has its sights set on an IPO while the remaining independent SD-WAN players are trying to get acquired.”
The fourth place position is held by Viptela, which generated $9.5 million. Viptela is set to be acquired by Cisco Systems in a deal that was announced May 1, valued at $610 million.
"With the WAN connectivity problem well understood and solutions ramping in deployments, SD-WAN vendors are beginning to offer additional services such as WAN optimization and virtual firewall," Cliff Grossner, senior research director and advisor for the cloud and data center research practice at IHS Markit, stated. "The next important challenge for SD-WAN vendors to solve is providing connectivity with SLAs and security for the multi-cloud."
Research firm IDC is also forecasting robust growth for the SD-WAN market segment. IDC has forecast that by 2021 SD-WAN will bring in $8.05 billion in revenue, giving the nascent networking segment a compound annual growth rate (CAGR) of 69.6 percent.
Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.