ISG Provider Lens™ Network - Software Defined Solutions and Services - SDN Transformation Services (Consulting and Implementation) - U.S. 2024

SD-networks across all enterprise types are now ubiquitous in secure cloud-enabled implementations.

In enterprise networks and software-defined solutions and services, there are many different strategic areas and trends to consider, including technology, business coverage, and enterprise organization and its specific processes. These areas are closely aligned with the global trends of enterprise digitalization, business transformation, advanced and enhanced security, and cloudification. In this study, the ISG Provider Lens™ focuses on softwaredefined networking (SD-networking) in the U.S. This includes managed SD-WAN and other related technologies and services, such as transformation services, edge technologies (including private enterprise 5G), and secure access service edge (SASE).

The global SD-WAN market analysis shows that the U.S. is the largest consumer, generating approximately $3 billion in revenue in 2023. The U.S. accounts for more than 32 percent of the global SD-network solutions and services market as of the beginning of 2024. This means that U.S. service providers play a crucial role in transforming and shaping the global SDWAN market. Highly advanced offerings with attractive  consumption models from system integrators (SI) and widespread adoption of SD-WAN by traditional service providers and SMEs, shifting from rigid infrastructures, drive the growth of the U.S. market. This adoption aligns with the global digitalization trend and multicloud implementation by enterprises across different industries.

With its advanced technology and significant presence in the global SD-WAN market, the U.S. continues to strengthen its market primacy. It enthusiastically embraces technologies like big data, edge computing (including private 5G networks), advanced and enhanced security, SASE, mobility (including Wi-Fi 6) and branch SD-LAN and hybrid cloud and platforms, as well as significant automation, analytics and ever more sophisticated AI within the corporate network domains. Enterprises seek cost reduction capabilities while improving their flexibility, competitiveness, security, delivery structures, hybrid working capabilities and business continuity practices, striving for ever better and enhanced CX and UX.

Implementing SD-WAN as an overlay on the existing underly hardware and infrastructure is often largely possible. It allows enterprises to leverage their current infrastructure while considering enhancements or replacements in a phased manner rather than opting for a total rip-and-replace of their enterprise network or branch equipment. Additionally, SD-WAN can effectively handle different types of connections and provide traffic division and protection across the entire WAN, including direct internet or multiprotocol labor switching (MPLS) underlays. It enables speedy migrations, including an essential feature of on-ramps to the cloud and full cloudification of the enterprise network. Enterprises are now appropriately incorporating existing SD-WAN
implementations where they exist as part of a complete SASE solution, often obtaining it as a fully managed service from a managed service provider. SASE represents the convergence of enterprise networking and advanced security, with SASE or SD-WAN with SSE (security service edge) emerging as the fastest growing segment in the overall managed network services marketplace.

Some key factors that drive rapid changes in enterprise networks in the U.S. in 2024 can be outlined as follows:

Enhancing enterprise network flexibility and functionality with simplified operation: In today’s business landscape, enterprises are increasingly focused on enhancing network resource integration, process integration, automation, network orchestration and operational management. One effective solution to these needs is SD-WAN, especially when delivered “as a service” (aaS) to the enterprise. By moving the control layer to the cloud, SD-WAN enables real-time management or monitoring through single-pane-of-glass access using policy and automation. This streamlined approach allows for seamless addition of applications and network resources without hardware implementations, facilitating efficient and secure achievement of business and user objectives. SD-WAN is, therefore, becoming a foundational enabler of many enterprise needs for today and the near future.

Cloud and multicloud migration risk reduction: As organizations migrate their information and  communication technology (ICT) and network operations to the cloud, reducing complexity and mitigating risks become paramount. SD networks play a crucial role in enabling a smooth and secure migration to single or multicloud environments for enterprises. By leveraging SDWAN, businesses can navigate the complexities of cloud adoption, minimizing potential disruptions and enabling a seamless transition while ensuring single-pane-of-glass monitoring or control of their network end to end, from core to edge.

Enhancing security across networks: Security has emerged as a top priority for businesses across almost all industries. Enterprises demand comprehensive and advanced security measures covering the entire network architecture. SD-networks provide a flexible but secure foundation to address these requirements, especially in cloud-based and hybrid networks. By adopting SD-WAN, businesses can deploy robust security measures and facilitate simplified full SASE deployments or add SSE to existing SD-WAN installations to create SASE, safeguarding their networks from threats in real time.

Accelerated adoption of SME SD-WAN: Research indicates continued growth of SMEs throughout the U.S. As a result, this segment is expected to experience fast growth in the next few years before reaching saturation. SMEs often have distributed workforces and rely heavily on affordable, easy-to-administrate cloud-based network and collaboration solutions. SD-WAN solutions provider SMEs with an affordable and efficient means to access robust cloud and security services, which can be scaled as they potentially expand their enterprises or branch/location estates. Enterprises can reduce monthly costs by using SD-WAN as overlays and access points. They can consume such services in an aaS and consumption-based manner.

Improved CX through aaS: Enabling clients to leverage advanced network services in a managed service or aaS manner, with modern payment terms and conditions, can enhance CX/UX rapidly at a low initial cost. SD-networking underpinned solutions in customer service customer experience (CCCX) or self-service manners can be delivered in fully managed or co-managed service types. This results in cost and complexity reduction and decreased implementation risks within the enterprise. Enhanced CX has become a critical factor for many businesses to remain competitive, while elevated UX has become vital to retaining experienced and talented employees.

Enabling a solid base for embracing innovative technologies and solutions: The rapid advancement of digital transformation toward fully digitalized enterprises, together with other technological innovations such as intent-based networks, automation, analytics, AI- and ML-driven solutions, self-healing networks, intelligent edge, SSE, SASE, SD-LAN and mobile LAN, including 5G connectivity and management, requires the foundational capabilities of SD-networks. By fully utilizing managed or co-managed SD-WAN,  organizations can unlock the full potential of these innovative technologies, minimizing costs and implementation/operational risks and complexity and retaining an operational network overview. This ensures its required business functionality and services are effectively and competitively met.

The study’s primary findings indicate that telecommunication service providers, network service providers and SIs, along with their partner ecosystems, offer a range of effective SD-WAN, security and SD-network solutions. These solutions can be tailored to specific industries or business verticals. Many enterprises have already embraced advanced SD-network-based innovations, such as intent-based networks with AI. Mobility and remote location solutions, such as SD-LAN or SD wireless LAN (SD-WLAN), are also in high demand, especially when combined with enterprise 5G solutions. The shift to cloud and multicloud environments has not reached saturation; it still drives changes in enterprise networking, supported by SD-networks.  Additionally, adding SSE or implementing full SASE solutions enhances the capabilities of secure cloud and multicloud environments core to edge.

In this report, we explore the evolving demands of the market and present a comprehensive analysis of its different sectors. Additionally, we offer practical assistance in evaluating the products and services provided by a multitude of competing suppliers to make informed decisions.

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