Industry Insights

Beware Two-Horse Syndrome in the SD-WAN Market

Have you ever noticed that in the movies, it always comes down to two? It might be two sports teams, two political candidates, or two romantic suitors, but inevitably if there is some competition afoot, it will always boil down to two competitors duking it out until only one emerges victorious.

By Charles Araujo, Principal Analyst, Intellyx

Have you ever noticed that in the movies, it always comes down to two?

It might be two sports teams, two political candidates, or two romantic suitors, but inevitably if there is some competition afoot, it will always boil down to two competitors duking it out until only one emerges victorious.

The reason is simple: people love a good drama.

And boiling down a competitive field to only two competitors who then must face-off against each other to see which will reign supreme is a sure-fire way to create edge-of-your-seat drama. But it isn’t only movie makers who use this trick. The media also uses it to create a compelling story that garners eyeballs and sells advertising.

So it should be no surprise that as new technology markets emerge, the industry and media pundits set out to boil down the market and declare a nice and tidy two-horse race. After all, a wide-open field is anti-dramatic and can be downright confusing.

The Software-defined Wide Area Network (SD-WAN) market has recently been stricken with this, as I call it, two-horse syndrome. Cisco’s recent acquisition of Viptela, followed by VMware’s acquisition of VeloCloud, has led several industry media outlets and pundits to claim that the fight for SD-WAN market dominance has come down to these two industry giants.

This proclamation may sell seats to the show, but there is one small problem — it isn’t true.

SD-WAN: An Emerging Market

These two acquisitions by large and entrenched industry players are indeed a signal that the SD-WAN market is maturing and gaining traction. However, we are still in the early stages of the market’s evolution.

Like most emerging markets, the SD-WAN sector is a multi-faceted and rapidly changing space. SD-WAN technologies serve a myriad of use cases supporting enterprise organizations, mid-market firms, and even service providers — and serve each differently. Moreover, the technology platforms themselves are continuing to evolve.

The first iterations of SD-WAN technology predominately focused on merely applying the software-defined approach to traditional packet routing and network management activities – for example, enabling controls to send Internet HTTP out via broadband, and send Enterprise HTTP out via MPLS.

More recent market entrants are moving up the stack and enabling organizations to route and manage at the application layer (sometimes called application-aware SD-WAN) or are applying intelligence into the network in different ways.

This level of awareness manifests itself in accurately identifying applications, their sub applications, and the performance of individual sessions and transactions.  The resulting metrics allow application-aware SD-WAN vendors to make smarter enforcement decisions based on the actual user experience rather than relying on things like the port number found in a packet.

In addition, new market entrants are combining SD-WAN capabilities with security functions, local network functions, and any other number of complementary extensions to the technology. The result is that the SD-WAN market remains a rapidly evolving space that is only now beginning to fully explore its full potential, which is to transform the way organizations look at the network altogether.

The Real Drivers of SD-WAN

Part of the reason that the Cisco and VMware acquisitions were big news is that they served as validation that SD-WAN is disrupting the traditional network and infrastructure markets.

Moreover, it is also a visible sign that the SD-WAN space is attracting enough attention among enterprise, mid-market, and service provider customers to warrant significant investments by traditional market players.

These are both valid assertions, but they fail to capture the underlying reasons that SD-WAN is gaining traction in the first place.

Organizations are unmistakably turning to SD-WAN as they seek adaptability, resiliency, and cost savings. But beyond these immediate benefits, they are also leveraging the technology to transform their infrastructure management paradigm around customer-centricity and business value — focusing on the application and customer touchpoints as the central organizing factors of their network deployments.

In addition, each target market segment has its own particular needs, requiring different approaches to SD-WAN. The shifting nature of these different needs and the continued evolution of the technology itself ensures that this market will continue to change and expand for the foreseeable future.

The Intellyx Take

While declaring an emerging market to now be a two-horse race may make for good drama, it is not good for the industry.

Enterprise, mid-market and service provider customers alike must make sense of this rapidly changing market sector from their own unique perspectives to determine the best way to leverage the technology as part of their transformative efforts.

While their respective acquisitions have unquestionably made Cisco and VMware players in the SD-WAN market, potential buyers should see these developments as a signal that the market is continuing to grow in both relevance and application rather than as a fait accompli.

Copyright © Intellyx LLC. Cisco, CloudGenix, and VMware are Intellyx clients. None of the other organizations mentioned in this article are Intellyx clients. Intellyx retains full editorial control over the content of this paper.

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