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SA to make significant gains in SD-WAN market

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The South African software-defined wide area network (SD-WAN) market is on a growth trajectory.

This is according to local market research firm BMIT’s latest South African SD-WAN Market Report, which sets out to define and then quantify the significant growth trend in SD-WAN adoption.

Based on the broadest definition used in the report, BMIT predicts SD-WAN will penetrate 37% of all South African virtual private network (VPN)-enabled business sites by 2026, up from 17% in 2021.

SD-WAN is a virtual wide area network architecture that allows enterprises to leverage any combination of transport services – including multi-protocol label switching (MPLS), long-term evolution and broadband internet services – to securely connect users to applications.

Globally, a report by Markets Report World says the SD-WAN market is projected to reach $5.2 billion by 2028, from $995.2 million in 2021, at a CAGR of 26.2% during 2022-2028.

It notes that an SD-WAN simplifies the management and operation of a WAN by decoupling the networking hardware from its control mechanism. This concept is similar to how software-defined networking implements virtualisation technology to improve data centre management and operation.

According to BMIT, the leading players in the South African SD-WAN market include BCX, Vodacom Business, Dimension Data, Gijima, Liquid Intelligent Technologies, Vox Telecom, EOH, Datacentrix and Metacom, among others.

Christopher Geerdts, BMIT MD, notes customers are adopting SD-WAN to save on costs, but are also seeking performance and reliability.

“Meanwhile, the environment is becoming progressively more complex, as employees need to access a range of cloud-based services from the office, from home and from their smartphones whilst travelling.”

Geerdts points out that the local disruption has, in part, been driven by innovative local service providers deploying proprietary solutions, aimed at addressing their customers’ local challenges.

These solutions are often tailored for specific vertical markets, or even fully-customised for a single, large, multi-site (even multi-national) customer, he explains.

Many of these proprietary solutions would likely not conform to the narrowest or “purest” definition of SD-WAN, although the local solutions are constantly evolving, Geerdts adds.

The market research firm points out that further market disruption has come from a number of new managed services players and global SD-WAN vendors, making early inroads into the customer bases of traditional network operators and equipment vendors.

It explains these traditional players are responding with their own SD-WAN solutions, leveraging existing customer relationships and the trust they have built with those clients.

While MPLS and SD-WAN often co-exist in hybrid deployments, BMIT forecasts the number of sites with traditional MPLS will decline by 5% per year between 2021 and 2026, while SD-WAN orchestration is expected to grow at 18% CAGR over the same period.

BMIT believes the number of access connections at these sites is set to grow more rapidly than this because SD-WAN customers can benefit by deploying two or more broadband connections at each site.

It notes South African-based managed services players are deploying SD-WAN solutions in customer sites both in the country and in other African countries in which they operate, in a “follow the customer” approach.

“Due to the weighting of multi-site companies, notably with retailers in the VPN market overall, sites outside of SA’s borders make up as many as 40% of all sites deployed by some leading South African managed service providers.”

The firm points out that cloud services are a key part of the SD-WAN ecosystem – SD-WAN solutions are designed to provide enhanced access to cloud-based corporate applications, while cloud platforms are also part of the SD-WAN solution set, as an enabling platform when delivering managed SD-WAN and security services.

Hybrid cloud deployments, with stringent performance, reliability and security requirements, have necessitated new approaches, including those for SD-WAN with its decentralised approach, often built on public networks, says the report.

It adds that deployment, automation, optimisation and orchestration of policy can be expedited via cloud-based services.

Security is an essential component of this cloud-based management. BMIT points out that SD-WANs have many endpoints which need to be secured, but then most companies need to support remote work and mobile work in any event.

Secure access service edge is now being considered a must-have toolset for any cyber security strategy, it concludes.

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