In 2018, IDC forecast that SD-WAN infrastructure revenue would grow at a compound annual rate of 40.4% from 2017 to 2022, reaching $4.5 billion. Dell’Oro Group published a related forecast that year putting software growth above 40% a year as well.
IDC said SD-WAN infrastructure revenue rose 83.3% in 2017 to $833 million. Dell’Oro predicted that SD-WAN software, meaning controllers and virtual network functions, would grow at 41% a year over five years. It put hardware growth at 21%, so software was expected to grow almost twice as fast.
What the 2018 forecasts said
Brandon Butler, a senior analyst at IDC, said the speed of adoption was among the most surprising parts of the forecast. He described the market as being in its early stages, with significant growth expected through 2022.
IDC tied the demand to enterprises adding SaaS and IaaS services. Those firms were moving away from hub-and-spoke WAN designs that backhaul internet and cloud traffic to on-premises data centres. Instead they were turning to local internet breakout and other transports, including 4G/LTE and, prospectively, 5G, at branch sites.
Butler said organisations upgrading WANs that mixed MPLS, cellular and broadband would find that easier with SD-WAN. Cisco’s Kiran Ghodgaonkar, a senior manager of enterprise marketing, said multi-cloud use was turning the WAN into the backbone of the enterprise. Cost was a further draw, since customers could support cheaper links such as broadband, Ethernet or LTE without buying new hardware.
IDC also pointed to analytics and management. Vendors were adding performance benchmarking and user analysis, and IDC expected some of them to integrate LAN and WAN management, which were still largely run separately.
Pricing and security concerns
Shin Umeda of Dell’Oro said inconsistent pricing could slow adoption. Prices and feature sets varied widely between vendors, which made the economic value hard to judge. He also noted that the large software component moved spending from one-off capital expense to recurring operating expense.
Security was the other worry. Ovum observed in 2018 that many vendors offered basic security options rather than listing them as roadmap items. Umeda said the definition of SD-WAN was evolving and that integrated security was becoming a requirement, because many users relied on unsecured internet links. Butler expected vendors to add security features quickly and to form partnerships. IDC said that native security in networking platforms would push network and security buyers to coordinate early in procurement.
Vendor shares in 2017
| Vendor | IDC share 2017 | IDC share 2016 |
|---|---|---|
| Cisco | 49.3% | 63.1% |
| VMware | 10.4% | 7.8% |
Cisco held the largest share in IDC’s data. It had bought Viptela in August 2017 and then added Viptela’s SD-WAN technology to the IOS XE software that runs its ISR and ASR routers. The company said more than a million such edge routers were in use worldwide.
VMware ranked second. It had acquired VeloCloud in December 2017 and renamed the product VMware NSX SD-WAN. IDC said the aim was an integrated multi-cloud networking platform spanning NSX virtualisation in the data centre and VeloCloud at the branch. Silver Peak, Riverbed, Versa and Aryaka were also named among the vendors driving growth.
How the forecasts moved afterwards
Later forecasts were far lower than 40%. In 2020 Dell’Oro Group projected 24% annual growth over five years, with the market passing $4 billion in 2025. Shin Umeda said the COVID-19 pandemic had delayed some deployments in 2020 but that demand for WAN modernisation stayed strong. Dell’Oro also said software accounted for more than 80% of SD-WAN revenue at that point.
IDC’s later projections, as summarised by SDxCentral, put 2022 revenue growth at 21.5%. It forecast 17.7% growth to $5.3 billion in 2023 and nearly $7.2 billion by 2026. For 2021 to 2026 it projected a 14.1% compound rate. Gartner forecast $5.3 billion for 2023 and more than $8 billion by 2026.
In August 2026, Dell’Oro Group forecast SD-WAN revenue growth of 14% a year as part of its SASE outlook, which sees SASE revenue reaching $24 billion by 2030. It attributed the growth to secure branch refreshes, stronger software subscription attachment, managed-service adoption and the convergence of routing, SD-WAN and security on common branch platforms. In February 2026 it described SD-WAN as becoming the layer where enterprise security policy is executed.
For Asia-Pacific, IDC’s March 2025 forecast for the region excluding Japan and China covered 2025 to 2029. Analyst Swathi Arunaa said SD-WAN integrated with secure services edge technologies had become critical to enterprise network resilience. IDC Japan’s June 2026 forecast said the domestic SD-WAN market kept growing at double-digit rates in 2025.