Executive Summary: ISG Provider Lens™ Network - Software Defined Solutions and Services - U.S. 2023
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ISG Provider Lens™ Network–Software Defined Solutions and Services - Managed SD-WAN - U.S. 2023
Acceleration toward ubiquitous secure end-to-end SD networks across all business segments
Networks and software-defined solutions and services encompass many technological topics, business coverage areas, organizational functions, and business processes and methods. These solutions are closely related to the digitalization, enhanced security and cloudification trends of enterprises globally. This ISG Provider Lens™ study examines multiple network service and solution offerings related to software-defined networking (SD-networks) in the U.S. These include managed SD-WAN and associated core and mobility technologies and service offerings related to these segments, transformation services, edge technologies and secure access service edge (SASE).
Regional analysis of the global SD-WAN market shows the U.S. as the largest shareholder, with revenue reaching approximately $2.6 billion in 2022. The U.S. alone consumes more than 30 percent of the global SDN solutions and services market as of 2023. Therefore, service providers in the U.S. play a vital role in defining the global SD-WAN market. Key factors driving the U.S. market growth include system integrators’ (SI) offerings and the increasing SD-WAN adoption by traditional service providers and SMEs in line with the digitalization and multicloud implementation of large enterprises across industry verticals. As a technologically advanced country and the biggest shareholder in the global SD-WAN market, the dominance of the U.S. providers is becoming stronger due to the increasing adoption of technologies across corporate networks such as big data, edge computing, enhanced security, SASE, mobility (including private 5G networks), IoT, hybrid cloud and platforms, ML and AI.
Enterprises are evaluating and implementing various means to decrease costs while increasing their agility, flexibility, competitiveness, security, delivery structures, remote working and continuity practices leading to improved CX/UX. Running SD-WAN implementations as an overlay allows the utilization of existing routers and switches or universal/virtualized customer premises equipment (u/vCPE). SD-WAN can also handle various connection types and divide and protect the traffic moving via the WAN. Many enterprises are increasingly opting to procure SD-WAN as part of a complete SASE solution, often consumed as a fully-managed SASE service from a managed service provider. SASE is the inflection point where enterprise networking and security fully converge.
Some of the primary factors driving rapid changes in the U.S. enterprise networks are summarized below.
Increasing flexibility and functionality while simplifying management: Enterprises increasingly focus on improving network resource and process integration, automation, orchestration and management. By moving its control layer to the cloud, SD-WAN can operate and be managed in real-time via one-touch or single-pane-of-glass through policy and automation. This enables seamless application and network resource additions without hardware implementation to meet business and user goals efficiently and securely.
Reducing risk in the cloud and multicloud migrations: Enterprises are increasingly migrating their IT and network operations onto the cloud. SD networks assist with this by reducing complexity and enabling a reduced-risk migration to single or multicloud environments for enterprises.
Increasing security across networks, including cloud-based networks: Network security has become a major concern across business verticals as enterprises seek security from core to edge in an enterprise network. This need for security is met by enabling SD-networks which become vital in the riskfree provisioning of cloud-based and hybrid networks. It is foundational to simplified full SASE deployments.
SME SD-WAN market growth: Primary research shows an accelerating volume of SMEs entering markets across the U.S., with this segment expected to grow rapidly over the next few years. SMEs have a higher probability of having distributed workforces and will often rely on cloud-based solutions for communication and collaboration. By utilizing low-cost SD-WAN solutions as overlays and access points into cloud and security, providers can reduce their monthly costs while leveraging multiple links to low-cost local Internet lines under an SD-WAN single-pane-of-glass control.
Consuming managed or co-managed service while improving CX: Allowing clients to consume network services via modern payment terms and conditions can significantly enhance the client experience. SD-networking-enabled solutions can be delivered as a fully managed or co-managed service, thus reducing overall cost and implementation risk. SD-networking-enabled services assist in retaining or enhancing enterprises’ ability to respond quickly to customer inquiries and rapidly provide (often automatically) required new services. Improving CX has become crucial for many enterprises.
A foundational solution to enable innovative technologies and solutions: Digitalization and other innovations, such as intent-based networks, AI- and ML-driven solutions, services and systems, rapid hotspot provisioning and data flow allowance, self-healing networks, intelligent edge, edge computing, SD-LAN connectivity and management and SASE require the flexibility and abilities of SD networks to be utilized fully and drive solutions to their full potential while de-risking their implementations.
The study’s primary findings demonstrate that most telecommunication service and network service providers, as well as SIs, together with their significant partner ecosystems, have an impressive portfolio of SD-WAN and other SD network solutions. These are partial or function-specific solutions to complete end-to-end SD-WAN or SD network solutions, with many of them based on industry type or business vertical. Many enterprises have introduced advanced SD-network-based technological innovations, such as intent-based networks, that use ML and AI interactions and control or edge intelligence and computing solutions. Most enterprises require mobility and remote location solutions such as SD-LAN or SD-wireless or wireless and mobile LAN (SD-WLAN or SD-WMLAN), sometimes coupled with enterprise LTE/5G private/public solutions. Movement and change in enterprise networking are further driven by the transition many enterprises are making to the cloud and multicloud environments. Cloud environments are well supported by SD networks from enterprise core to edge and integration of SASE solutions across all enterprise touchpoints. This study considers the changing market requirements and provides a consistent overview of its segments. It also gives concrete decision-making support to help evaluate and assess the offerings and performance of providers.
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