SD-Branch market expected to reach $3 billion by 2022

As long as I have been an industry analyst, network engineers have tried to build multifunction boxes that are capable of addressing a wide range of network functions. These all-purpose network boxes have been lost to history as single-function platforms optimized for network performance (e.g., router or WAN optimization) dominated the market. The branch network is poised to benefit from the advances in software networking to collapse all network functions on to a single platform — the software-defined branch (SD-Branch).

A total addressable market (TAM) analysis of the SD-Branch market starts with understanding the total spend on branch networking hardware and software. Worldwide spending on routers, WAN optimization, SD-WAN, network security, Wi-Fi, and ethernet switches at branch locations is approximately $15 billion, according to Doyle Research.

SD-Branch solutions are just reaching the market during 2018 — so spending will remain small this year. Expect SD-Branch adoption to accelerate during 2019-2021 as many suppliers introduce new products and as distributed organizations achieve CAPEX and OPEX benefits. Doyle Research forecasts that worldwide expenditures on SD-Branch solutions will reach $3 billion by 2022.

What is the SD-Branch?

SD-Branch is defined as having SD-WAN, routing, network security, and LAN/Wi-Fi functions all in one platform with integrated, centralized management. Software-based networking technologies such as software-defined networking (SDN), software-defined WAN (SD-WAN), and network functions virtualization (NFV) have abstracted network intelligence from the integrated network appliance (aka black box). The concept of the SD-Branch is to leverage network virtualization to run several discrete functions on a single platform. Advances in silicon from Intel, ARM, and Broadcom enable the network horsepower to run routing, SD-WAN, network security, and Wi-Fi functionality on one hardware platform.

Applications (use cases) for SD-Branch

The best analogy is that single-function network appliances (e.g., WAN optimization) are to SD-Branch as 100-meter dash winners are to decathlon athletes (i.e. specialists vs. generalists).  And like decathlon athletes, some SD-Branch solutions are better at certain functions (events) than others.

SD-Branch solutions are initially best suited for new deployments (green field sites), mobile sites, and small offices. Lean IT departments can benefit from the ease of deployment and management capabilities of SD-Branch technologies. The best use cases for SD-Branch are:

• New or temporary branch office locations — where speed and ease of deployment are critical

• Mobile offices —g., public safety

• Major branch office refreshes — upgrading a range of networking gear

• Thin branch — low data use with most processing done at central locations

Likely SD-Branch migration scenarios

I have forecasted many market transitions, but the adoption curve of SD-Branch is especially challenging due the nascent state of the market and the variables of the adjacent markets (SD-WAN, network security, and branch Wi-Fi). The migration to SD-Branch is all about consolidation and simplification of previously discrete branch network functionality.  

Distributed organizations are already collapsing several applications on a single platform. For example, SD-WAN technology has enabled many IT shops to eliminate their branch routers and WAN optimization appliances. IT organizations will have many choices as they migrate towards fewer individual branch technologies. These include:

• Consolidation of WAN functions (routing, SD-WAN, WAN optimization) vs. consolidation of WAN, LAN and Wi-Fi solutions in one platform.

• Integrated or separate network security. SD-Branch providers offer integrated or third-party network security capabilities, but many organizations may prefer separate solutions from leading security providers.

• Amount of functionality (intelligence) at the branch vs. moving the intelligence to the centralized data center or the cloud.

• Sourcing SD-Branch as a managed solution from service providers. (See “Demand for managed SD-WAN services skyrockets.”)

SD-Branch suppliers

IT organizations will have a plethora of choices around SD-Branch solutions. Cisco, Cradlepoint, Riverbed, and Versa have already announced SD-Branch products. Other suppliers well positioned to deliver on SD-Branch include Aruba/HPE, Citrix, Talari, and VMware. Service providers such as Verizon will also offer managed SD-Branch solutions in the near future.

Conclusions and recommendations

Building and running branch networks is troublesome, time consuming, and expensive. SD-Branch technologies can provide significant benefits to IT departments in terms of rapid deployment (agility), reduced CAPEX, and ease of operations. These SD-Branch solutions will be best suited for new branch deployments, mobile locations, or temporary sites.

Adopting new technologies can be challenging, and IT pros must always weigh the benefits vs. the downsides of new branch architectural decisions. IT organizations should evaluate SD-Branch architectures as they mature for major branch refreshes for their smaller offices. Each solution will have strengths and weaknesses across the variety of network functions. For example, they might be strong in SD-WAN, Wi-Fi, or security but weak in other areas.

IT organizations should gain experience with SD-Branch technology via pilot projects and small initial deployments. Picking a knowledgeable partner to help integrate and manage the wide range of network functions at the branch will be critical. Over the next few years, SD-Branch will become a cost-effective and operationally efficient option for many distributed organizations.