SYDNEY, June 5, 2017: The enterprise connectivity market in Australia will become increasingly software defined according to recently published IDC research. Traditional connectivity and hardware revenues have limited growth potential as value to the enterprise and the vendor will be delivered by solutions and products taking advantage of software defined networking (SDN) architectures.

"There is little growth left in the market for traditional carriage connectivity and the move towards software defined control of networks by the enterprise will see new classes of products and vendors in the market," says IDC research manager Jamie Horrell. "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".

The WAN is supporting mission critical applications in over 80% of organisations and network availability, mean time to repair, and application performance are the top ranked service level requirements. 79% of organisations are using the WAN to access cloud services, and 69% for videoconferencing services. IDC expects to see non-critical classes of traffic move from traditional MPLS based WAN connectivity onto the public Internet enabled by the SD-WAN solutions that are coming to market.

The cloud makes a strong showing with over half of organisations surveyed preferring a cloud managed SD-WAN solution and over 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" says Horrell. "Almost nine out of ten 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."

Switching and routing hardware revenues will remain flat through to 2020 as more efficient capacity utilisation is achieved not just due to the uptake for software defined solutions, but also less physical on-premise equipment being deployed as compute moves to the cloud.

There is however significant upside in wireless LAN equipment as the modern workforce demands mobility and ubiquity of access in the workplace and on campus. IDC expects to see the WLAN hardware market by 2020 to have grown by more than 80% compared to 2016, approaching the $AUD 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. A third of Australian enterprises want their wireless LAN management outsourced with more than two thirds willing to consider it.

"Networking will follow compute and storage; it will become more software driven, flexible, scalable and available for consumption as a service. Network is simply playing catch up with the rest of its cloud bethren," added Horrell.