Cisco Systems leads the competition in the latest IDC software-defined wide area networking (SD-WAN) study.

Cisco holds nearly 47% of the SD-WAN infrastructure market, according to IDC’s market share and market forecast reports. The company earned $638 million last year in SD-WAN infrastructure sales – a year-over-year increase of more than 55%.

Cisco’s market share includes revenue from Viptela and Meraki, as well as ISR/ASR routers used for SD-WAN. VMware, which owns VeloCloud Networks, trailed with a market share just under 9%. Silver Peak Systems was close behind VMware with 7.4%, followed by Nuage Networks, Riverbed, Aryaka, and Huawei.

Total market sales added up to $1.37 billion at the end of 2018, which was nearly 65% growth over the course of the year.

Brandon Butler, who covers enterprise networking as a senior research analyst for IDC’s network infrastructure group, divided the vendors into two general categories: traditional enterprise networking vendors like Cisco and VMware that leverage their existing networking equipment, and WAN optimization companies such as Riverbed and Silver Peak that have added the ability to manage multiple traffic links on a common platform.

IDC defines SD-WAN as “a dynamic, policy-enabled hybrid WAN that uses at least two or more connection methods and includes a centralized application-based policy controller that provides intelligent path selection, along with an optional forwarder for routing capability.”

IDC expects the market to hit $5.25 billion in 2023 for an almost 31% compound annual growth rate. Butler called SD-WAN one of the fastest growing areas of enterprise networking. He pointed to several key drivers that should continue over the next five years.

IDC’s Brandon Butler

“This technology really enables enterprises to better manage their WAN deployments,” Butler said. “It allows them to optimize their connections to cloud-based services, both SaaS and IaaS. And it provides them an opportunity to potentially save money, to be able to integrate in lower-cost connectivity methods instead of just relying on MPLS.”

Rohit Mehra, IDC’s vice president of network infrastructure, agreed that traditional enterprise WANs are struggling to support SaaS apps and various cloud strategies. He said using multiple connection types makes management easier for businesses and improves application performance.

“Combined with the rapid embrace of SD-WAN by leading communications service providers globally, these trends continue to drive deployments of SD-WAN, providing enterprises with dynamic management of hybrid WAN connections and the ability to guarantee high levels of quality of service on a per-application basis,” Mehra said.

Anand Oswal, the senior vice president of engineering for Cisco’s enterprise networking business, said the IDC survey shows the success of Cisco’s …… “customer-first approach.” Oswal said his company is focusing on SD-WAN’s evolution from early adoption to large-scale adoption.

Cisco’s Anand Oswal

“Customers are no longer asking, ‘What is SD-WAN?,’ but ‘How can I deploy SD-WAN?’ and “How do I extend SD-WAN to the cloud, access and data-center domains?'” Oswal said. “As more and more users are increasingly mobile and the applications they are consuming could be hosted on any cloud, Cisco is laser-focused on offering SD-WAN solutions that protect users and reduce exposure to security threats, ensure application performance is consistent, and simplify the complexity associated with connecting users to applications wherever they live. For partners, Cisco SD-WAN offers a compelling solution to deliver profitable SD-WAN managed services.”

Nokia-owned Nuage Networks celebrated finishing fourth earlier this month.

“If indeed it is true that SD-WAN market leadership is a marathon and not a sprint, Nuage Networks is prepared for this race, we have advanced gel soles in our shoes and energy packs in our hands, while we take comfort from our years of advanced routing training and proven innovation to take us forward,” Nuage’s Patrick McCabe wrote in a blog.

IHS Markit released its own market leaderboard last week.