Themes: SD-WAN & SASE Industry Review 2024 (Pt.2)

Summary

• As we discussed in Part 1, the landscape will evolve to a much broader market than SASE, as WANaaS and hybrid/multicloud networking is incorporated.
• In Part 2 we share our thoughts on the SD-WAN side of SASE and extend the trends and competitor analysis to the broader landscape of networking and security.
• In Part 3 we shall take a deeper dive into the converged security and networking part of SASE.

2023 MQ for SASE, SD-WAN, and SSE + Voice of the Customer SSE

SD-WAN Magic Quadrant

SASE Magic Quadrant

SSE Magic Quadrant

Voice of Customer for SSE

Here we articulate our thoughts on various vendors and their ranking by Gartner.

Thoughts on SD-WAN 2023

Trends

Overall, the SD-WAN market will continue to see further consolidation, continued mid-growth and slow replacement of existing infrastructure. The key trends are: 1) networking/security convergence, aka SASE, 2) cloud networking, 3) MPLS replacement, 4) SD-branch, 5) NOC + SOC convergence infused with GenAI, and 6) the convergence of the whole networking/security stack whereby a single vendor can provide the SASE, WANaaS, hybrid cloud networking, multi-cloud networking, and NaaS merged together. Here we elaborate on each:

• Convergence of Networking and Security. This is still underway, and coming into 2024, we see a greater push for integrated solution as opposed to SD-WAN, SSE, and others separately. This is because, in comparison to the peak demand of the pandemic, when customers scrambled to buy WFH solutions, now they have more time to plan and design a long-term architecture suitable for the hybrid work future whereby not everyone is WFH all the time.
• Cloud on-ramp and cloud networking. Although Gartner stresses the cloud on-ramp component, a bigger area of interest for investors should be cloud networking as networking is often the lagging segment in terms of change. For instance, AWS has pioneered the cloud compute, but it was around 2020 when SNOW started to really make cloud storage a real thing. Likewise, networking will follow and evolve to cloud networking, possibly in 2025-2030. At the moment, none of these SD-WAN players have great cloud on-ramp, needless to say cloud networking. However, we do see FTNT seeding a lot of innovation in this field too, which is a good thesis driver. Versa networks is also making good progress in this field, but overall it will be mostly led by startups like Aviatrix and Alkira. VMW+AVGO potentially has a good chance to leverage its on-prem dominance and multi-cloud orchestration capabilities to deliver unified architecture too, but the uncertainty is higher.