Software-defined networking (SDN) is soon expected to underpin enterprise connectivity in Australia, with businesses looking to optimise cost and bandwidth.
New research by IDC has found that with limited growth potential offered by traditional connectivity and hardware revenues, the value to the enterprise and vendor will be delivered by solutions and products that take advantage of SDN architectures.
Specifically, findings found little growth left in the market for traditional carriage connectivity and that the move towards software-defined control of networks by the enterprise will see new classes of products and vendors in the market.
"Rather than rely on forklift upgrades to the WAN, the flexibility brought to networking by software defined approaches will see a move towards a hybrid WAN environment incorporating public Internet and taking advantage of Internet offload, application specific policy control, and intelligent path selection," IDC research manager Jamie Horrell said.
According to IDC, WAN is supporting mission critical applications in more than 80 per cent of organisations and network availability, meaning that time to repair and application performance are the top ranked service level requirements.
In addition, research found that 79 per cent of organisations are using the WAN to access cloud services, while 69 per cent use it for videoconferencing services.
According to Horrell, non-critical classes of traffic will move from traditional multiprotocol label switching (MPLS) based WAN connectivity to the public Internet enabled by SD-WAN solutions coming to market.
The cloud also benefits, with more than half of organisations surveyed preferring a cloud managed SD-WAN solution and more than three quarters expecting to leverage professional services from a third-party firm when implementing an SD-WAN solution.
"The stars are aligned for SD-WAN at present," Horrell said. "Almost nine out of 10 branch office routers shipped since 2014 in Australia have basic SD-WAN functionality; the WAN cost, and capacity equation is yet to be solved, and controller software is mature and being implemented as a service.
"As service providers bring controller based solutions to market, SD-WAN will be very difficult to ignore."
Looking ahead, switching and routing hardware revenues will remain flat through to 2020, as more efficient capacity utilisation is achieved as a result of the uptake for software defined solutions and less physical on-premise equipment being deployed as compute moves to the cloud.
But, there is significant upside in wireless LAN equipment, with the modern workforce demanding mobility and ubiquity of access in the workplace and on campus.
Going forward, the WLAN hardware market is forecast to grow by more than 80 per cent by 2020, in comparison to 2016, approaching the $300 million mark.
"The current trend toward cloud based software controllers will continue and hardware based controllers will be reserved for specific deployments where specialist functionality is required," Horrell added.
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