The global data center and enterprise software‑defined networking (SDN) market —including in-use for SDN Ethernet switches, SDN controllers, software-defined wide area network (SD-WAN) appliances and control and management — rose 82% in 2015 from the prior year, reaching $1.4 billion, according to IHS Inc.

“New SDN use cases continue to emerge, and 2015 was no exception with the establishment of the SD-WAN market. While still a small market, many startups, traditional WAN optimization appliance vendors and traditional network vendors have jumped in, and we forecast SD-WAN revenue to hit $1.3 billion by 2020,” said Cliff Grossner, Ph.D., senior research director for data center, cloud and SDN at IHS Technology.

Growth for SDN-capable (in-use and not-in-use) Ethernet switches and SDN controllers continues to ramp, with early players, pure-play SDN startups and traditional switch vendors gaining traction as customer deployments escalate.

Regionally, North America, Europe, the Middle East and Africa (EMEA), Asia Pacific and the Caribbean and Latin America (CALA) were all up in 2015 for data center and enterprise SDN hardware and software revenue.

“This year we look for new deployments of SDN and the scaling up of existing deployments,” Grossner said. “We continue to see vendors add to their SDN-capable products and organize new open source projects, adjusting their businesses to be part of the SDN‑driven transformation.”

With the data center and enterprise SDN market now looking to open source software and open hardware designs, the number of deployed networking solutions based upon open source is expected to multiply, and open source software for networking will mature as the integration of individual components creates a complete ecosystem.

However, Grossner cautioned, “We cannot ignore the hardware. Innovation in networking software is really ramping up, with open source taking the network world, just as it did with general computing over the last 10 years. But it is important not to lose sight that bare metal switching can provide more than a fixed-function merchant silicon data plane. There is room for programmable silicon in bare metal switches that is software customizable to meet evolving application requirements, removing the need to replace silicon to innovate.”

As the SDN market continues to form, the top market share positions are anticipated to change hands frequently. For 2015, the leaders in the individual data center and enterprise LAN SDN categories were White Box for bare metal switches, Dell for branded bare metal switches, VMware for SDN controllers and Hewlett Packard Enterprise for SDN-capable (in-use and not-in-use) branded Ethernet switch ports.