Building on its software-centric technology strategy, AT&T on Wednesday announced a 2017 launch date for an SD-WAN portfolio being developed in collaboration with Gartner-pegged “Cool Vendor in Enterprise Networking, 2016″ VeloCloud.

In a horse race among carriers to deliver SD-WAN service to business customers, AT&T says that its SD-WAN portfolio will include a network-based solution that combines hybrid networking with multiple types of network access. Partner VeloCloud is part of the AT&T Integrated Cloud ecosystem focused on SD-WAN.

“Businesses need to satisfy increasing bandwidth demands while reducing costs. That means network needs are evolving, too,” said Rick Hubbard, senior vice president, AT&T Network Product Management. “This initiative is part of our software-centric strategy that gives our customers more flexibility and control of their networking services.”

In a 2016 report, IDC forecast the SD-WAN technology and services market to exceed $6 billion in 2020.{ad}

“As public and private cloud use continues to grow, WAN performance becomes critical to latency-sensitive and mission-critical workloads and inter-data center business continuity,” said Rohit Mehra, vice president, network infrastructure at IDC. “Accordingly, as enterprises plan and implement comprehensive cloud strategies, WAN architectures need to be considered alongside, and in conjunction with, data-center infrastructure. Moreover, as enterprises move business processes to the cloud, there is a greater need to fully integrate cloud-sourced services into WAN environments to ensure workload/application performance, availability, and security.”

The research firm goes on to say that SD-WAN’s value proposition – predicated on the growth of cloud computing, the need for simplified virtual private network (VPN) capabilities, and the business imperative of reducing MPLS costs – will be compelling for a growing number of enterprise customers seeking to provide cost-effective, cloud-era networking to branch offices and remote sites. This view is supported by recent U.S. survey data that shows nearly half of enterprises plan to consider migration to SD-WAN over the next two years. Accordingly, IDC forecasts that SD-WAN revenue will start to ramp strongly in 2016 and 2017 across a range of vertical markets.

AT&T says that SD-WAN targets business organizations of every size across verticals. It also notes that it will provide a virtually seamless evolution path for VPN customers. So, for example, if a customer has multiple site types with varying reliability, performance and bandwidth needs, the AT&T SD-WAN network-based solution might be a good fit. For a customer with similarity across sites and looking to deploy SD-WAN at all locations, the AT&T SD-WAN premises-based, over-the-top solution might be the best fit. AT&T says that a premises-based, over-the-top solution will be available later this year.

The technology partnership between AT&T and VeloCloud is one of many vendor technology collaborations ahead as AT&T evolves its software-centric technology strategy, the company said.