BMIT’s latest Software-Defined Wide Area Networking (SD-WAN) Report indicates that SD-WAN has reached mainstream adoption in South Africa, with most new wide area networks based on this approach.
Chris Geerdts, Managing Director of BMIT, notes that the cost savings of SD-WAN over MPLS were always compelling, but there were initial concerns over SD-WAN’s security and performance, as it was untested. However, successful deployments by early adopters had led to deployments across all industry verticals in a relatively short space of time.
BMIT projects that in South Africa, SD-WAN will be deployed at well over half (57%) of all VPN sites by 2028, well up from 17% in 2021 and doubling the 29% penetration seen in 2023. This growth is fuelled by the rapid transition to cloud computing, increased accessibility of enterprise applications from smartphones, the ongoing popularity of remote work options and cost savings.
Many early adopters of SD-WAN deployed hybrid networks, where they ran mission-critical traffic on Multiprotocol Label Switching (MPLS) networks and shifted other traffic to SD-WAN. The maturing SD-WAN market then compelled MPLS providers to drop prices significantly over time and the MPLS market declined fairly rapidly for several years.
However, BMIT research found that a number of network operators and enterprises still see value in maintaining MPLS for now, as part of a hybrid SD-WAN solution directing selected traffic via these legacy networks. This is in line with international trends, where analysts estimate VPN site penetration at 45% for MPLS only, but 65% when including hybrid MPLS and SD-WAN sites, with MPLS declining at 10% CAGR globally.
Geerdts notes that growth has been in spite of the low levels of interoperability between different vendors. This means deployments are typically single-vendor, so that changing suppliers or upgrading older systems can be costly. He believes that initiatives to promote interoperability will greatly benefit the SD-WAN market.
International vendors such as Fortinet, VMWare and Cisco have gained significant local market share, partly due to their being able to cross-sell solutions to existing customers. However local solution providers have held their own: Companies such as Metacom are able to offer competitive in-house solutions based on their deep understanding of the needs of the local market, whilst local integrator BCX offers clients a choice of in-house or international options. Local integrators tailor each deployment to specific requirements of different use cases.
BMIT’s study highlights that security solutions continue to gain importance and need to address ever-increasing complexity and threat levels. “All SD-WAN solutions are critically linked to managed security, with a zero-trust approach to devices and Secure Access Service Edge (SASE) increasingly incorporated in cybersecurity strategy”, concludes Geerdts.
The BMIT SD-WAN Report 2024 provides a comprehensive analysis of the South African SD-WAN market, including market sizing, forecasts, competitor profiles, and technology trends. The report is based on primary and secondary research, including in-depth interviews with leading Managed Services Players in the VPN market in South Africa.
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