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SD-WAN market swells because of cloud-based business apps

IDC released its first study on the SD-WAN market, which is expected to hit $6 billion by 2020. The boom is driven by the growing popularity of cloud-based business applications.

The proliferation of online business applications, such as Microsoft's Skype for Business and Salesforce, has caused a boom in the SD-WAN market, as enterprises look for networking infrastructure that can manage growing levels of in-house traffic going to the Internet.

Last week, the technology analysis firm IDC released its first study on the SD-WAN market, predicting it would hit $6 billion by the year 2020, with a 90% annual growth rate. IDC estimated the SD-WAN market was worth $225 million in 2015.

Enterprise adoption of cloud-based applications and software as a service has significantly increased corporate Internet traffic, which has driven the demand for SD-WAN technology, said Brad Casemore, an analyst at IDC.  

Companies use SD-WAN to swap expensive MPLS connections for broadband and other cheaper alternatives that are more cost-effective for noncritical data. SD-WAN's features include path selection, which can send a company's important traffic to the most secure Internet line, while less critical traffic is sent to the slower and less secure public Internet.

The study estimated that SD-WAN adoption rates will almost double next year.

"Already, we're seeing more than 17% of businesses that plan to migrate [to SD-WAN] this year, and 30% plan to migrate in the next year," Casemore said.  

Not too long ago, the majority of business applications were housed on-site inside a private data center, said Andrew Lerner, an analyst with Gartner. Today, network traffic can travel between devices within the corporate network, or to software hosted in the cloud. Examples include popular applications, such as Microsoft Office 365 and Salesforce.

Lerner said one of the biggest benefits of SD-WAN is the ability to "load-share" across multiple connections. Since companies have more traffic going on various connections, including the public Internet, private MPLS and to the corporate data center, SD-WAN simplifies and optimizes how traffic is sent out over these WAN connections. Businesses have sought out this technology to help deal with their current network shifts.

"SD-WAN does a really good job of sitting on a network and saying 'Guess what? Some of your stuff is going back to the data center, and some is going on the Internet, and we're going to arbitrate that,'" Lerner said.

The combination of both on-premises and cloud-based applications has created demand for an SD-WAN-enabled traffic cop that directs data to the most cost-effective Internet connection, Lerner said.  

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