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SD-WAN in 2020: The Connected Enterprise

The widespread adoption of cloud, the growing recognition of software-defined wide area networking (SD-WAN) and the momentum behind transformation all point to an increasingly savvy enterprise IT market.
 
These enterprises are convinced that their future is cloud-centric, software-defined and digitally enabled.

In 2020, the solutions they need will have to go beyond the basics, offering new capabilities and performance without adding complexity.

To maximise the potential of these new technologies and models, enterprises are ensuring that their ICT ecosystem is simple to manage and built to serve their specific needs.

2020 would be defined by this move away from bolt-on connectivity solutions to vertical-focused solutions that combine network security and performance with portals, platforms and services. 
 
Here are some of the key trends that will shape enterprise IT in 2020 and what they will mean to the market over the next 12 months.
 
Beyond the Basics – Integrated WAN Security and Owned Infrastructure

The SD-WAN platforms and tools market has already achieved massive growth in 2019 with revenue totalling approximately $1.5 billion, according to research by Futuriom. The market is set to reach almost $2.2 billion by 2020.

This growth is largely due to enterprises optimising their WAN by adopting SD-WAN for cost-savings.

However in 2020, the value, performance and security of SD-WAN will become key drivers amongst enterprise adoption.
 
Heavy Reading noted that of the 47% of operators that have deployed SD-WAN, only 40% have already implemented security on SD-WAN. 

For SD-WAN to support growing number of cloud-based applications and services deployed by the enterprise, it needs to offer reliable connectivity, security and control. Otherwise more demanding applications won’t benefit from the flexibility and scalability of SD-WAN.

Enterprises in 2020 will be evaluating SD-WAN service providers based on security and performance as well as cost. 

The seamless integration of security services in the SD-WAN solution as well as owned backbone network infrastructure will emerge as differentiators in a commoditising market. Integrated security features will offer enterprises a comprehensive networking solution, while the network infrastructure delivers reliability and scalability. 
  
Verticalisation – Collaborating to Serve Vertical Industries

Enterprises of all kinds will be consuming cloud-based services at the edge in 2020. SD-WAN will be central to the next phase of cloud growth, driving further verticalisation of enterprise IT services. 

The move to industry-specific solutions will accelerate in 2020.

Service providers will have to shape specific solutions for different verticals through integrating technologies, collaborating with customers and developing new models for consuming network services such as application programming interface (API).

More personalised solutions will enable various industries to move over to SD-WAN.

For example in the healthcare sector, SD-WAN has already formed an essential pillar for supporting MedTech such as Internet of Things (IoT), population health, new AI-supported health applications, patient data analytics, and clinical workflows, as noted in a report by Clavem Research. The benefits of SD-WAN will extend to various industries to improve usability and productivity.
 
Multi-Cloud Strategy will Become the Norm for Enterprises

The reason why multi-cloud went mainstream in 2019 is really because of one thing: downtime. 

By placing resources towards a single cloud is an absolute risk, especially with all the unscheduled outages report over the last two years.

This means enterprises in 2020 will be using multiple cloud service providers’ (CSP) Infrastructure as a Service (IaaS) and Software-as-a-Service (SaaS) to host and manage applications and services. According to IDC, multi-cloud strategies will be adopted by 90% of enterprises in 2020.

It is becoming more important for enterprises to adopt multi-cloud strategy to increase flexibility, reduce risk and avoid lock-in, while utilising all the benefits offered by the different clouds. The challenge will be more about accessing and managing connectivity to the cloud as the enterprise IT workloads become more complex.

Enterprises will need to optimise their approach to cloud connectivity or face allocating time and resources to managing multiple connections delivered via multiple providers to different CSPs. SD-WAN and cloud connectivity will come hand in hand in 2020.

Increasingly Crowded SD-WAN Market – Demands Differentiation

Service providers offering SD-WAN grew every quarter in 2019.

It is an increasingly crowded market that can difficult for enterprises to navigate.

SD-WAN adoption increased from 35% to 54% between 2017 and 2019, and 36% of enterprises are actively researching the technology, according a report by IDG Research Services and Masergy. The report notes that future adoption rates could reach over 90%. 

Most enterprises understand the use case of SD-WAN, and will likely be looking for differentiation in offerings as well as service providers that have networking expertise.

SD-WAN as a standalone overlay solution is not going to be as compelling as solutions built on a global network infrastructure. The differentiator for SD-WAN service providers is delivering both the overlay technology as well as the underlying network. 

This is Still Only the Beginning for Enterprise Transformation

It feels like the world is changing rapidly, but digital transformation is still very much in its infancy.

IDC estimates that 40% of all technology spending is allocated to digital transformation technologies, which exceeded $2 trillion in 2019.

Despite the huge sum being spent on transformation, it is only starting to ramp up at unprecedented rate over the next three years.

While digitising processes and investing in new technologies form a crucial aspect of an enterprise’s digital transformation journey, it is only a small part of the bigger picture. 

This transformation not only involves digital technology, but also in the areas of company culture and innovation. Business leaders need to be willing to change their outlook and move on from legacy approach in order to move onto a better, more efficient way of working.

The pace of transformation is set to accelerate in 2020 and enterprises will have to embrace this continuous journey as part of their business strategy.

As we enter a new decade, the only guarantee is that it will be filled with just as much change as we have seen over the last 10 years. 

From 2010 to 2019, the enterprise IT market has grown to become a critical driver for business opportunities for service providers of all kinds. In the coming decade, the role of service providers will become intertwined with every aspect of an enterprise’s operations.

Author


Sherman Peh

Sherman Peh

Senior Manager, Content and Public Relations