Europe Managed SD-WAN Services - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Europe Managed SD-WAN Services Market size is estimated at USD 1.12 billion in 2024, and is expected to reach USD 3.38 billion by 2029, growing at a CAGR of 24.70% during the forecast period (2024-2029).

The European managed SD-WAN services market is currently experiencing robust growth. SD-WAN presents telecommunication firms with a chance to shift from merely offering connectivity to becoming technology-focused service providers. Securing a prominent role in the SD-WAN platform arena positions providers as leaders in underlay, security, LAN, UCaaS, and voice services and facilitates a smooth transition into telecom expense management.

Key Highlights

• With the significant migration of business applications to the cloud, organizations are increasingly seeking flexible solutions to direct branch office traffic to the cloud directly, bypassing the traditional route through the data center. Hosting an advanced SD-WAN on cloud platforms such as AWS or Microsoft Azure facilitates this, creating a direct tunnel for traffic from users to cloud services. This not only enhances application performance but also bolsters reliability and security.
• Advanced SD-WAN solutions incorporate WAN optimization features. These features combat latency, often caused by long distances, through compression algorithms and accelerated TCP protocols. Additionally, these solutions optimize SaaS application traffic. They achieve this by dynamically choosing the most efficient route, factoring in network conditions like packet loss, jitter, and latency. Furthermore, they prioritize the shortest path to the nearest point of presence (POP).
• Advanced SD-WAN solutions offer more than WAN optimization and routing features, such as BGP and OSPF. They also incorporate next-generation firewall capabilities. This consolidation of features allows organizations to streamline their branch network infrastructure. By replacing separate routers, firewalls, and WAN optimization devices with a single SD-WAN device, organizations save on power consumption and benefit from simplified management. Additionally, SD-WAN solutions can be deployed as virtual appliances, reducing equipment footprint and energy consumption. This unified approach cuts costs and minimizes errors that can arise from manually configuring disparate components.
• Remote workers utilize a range of tools, including cloud applications, virtual desktop apps, on-premises software, VoIP, and Software as a Service (SaaS). However, ensuring security and maintaining network performance pose significant challenges for these remote employees. While traditional network setups often struggle to keep pace with the diverse demands of remote work, SD-WAN stands out by providing secure connectivity, whether from public or private clouds and that too, from virtually anywhere with just an internet connection. Consequently, for companies embracing remote workforces, a well-managed SD-WAN network emerges as a critical asset.
• SD-WAN lacks inherent security features, leaving security management to individual providers. Notably, some vendors may fall short of providing robust security measures. A key hurdle with SD-WAN lies in the necessity to tailor and implement security features accurately, aligning them with each business's unique demands. Consequently, IT teams encounter difficulties in aligning service deployments with precise business requisites.

Europe Managed SD-WAN Services Market Trends

Increased Adoption of Cloud Services to Drive the Market

• Optimizing the existing use of clouds (cost savings) and migrating more workloads to the cloud are the top cloud initiatives for European organizations in 2024, as highlighted by 71% of respondents. Following closely, 61% of respondents have highlighted automated workload migration as a significant focus for the year, according to a survey by Flexera Software, a US-based Software company.
• Organizations are rapidly embracing SD-WAN to revamp their networks, enhancing connectivity between branch offices and headquarters. This surge is primarily fueled by the rapid pace of digital transformation and the migration of applications to cloud platforms. A robust, modernized network is pivotal in underpinning multi-cloud frameworks, bolstering security, and enhancing agility. Conversely, an inadequate network infrastructure hampers digitization initiatives and hinders IT departments from aligning with strategic objectives.
• European enterprises are increasingly opting for cloud computing services over traditional IT infrastructure. In 2023, as reported by Eurostat, the statistical office of the European Union, 45.2% of EU enterprises utilized cloud services. These services were primarily used for hosting e-mail systems, storing electronic files, and running office software. Notably, 75.3% of these enterprises went a step further, investing in advanced cloud solutions. These sophisticated services encompassed security software applications, database hosting, and computing platforms tailored for application development, testing, and deployment.
• In June 2024, Haier Europe, in its push to become a data-centric enterprise, selected Orange Business to construct a dynamic SD-WAN. Orange Business's Evolution Platform will focus on coordinating three key elements: cloud, connectivity, and cybersecurity. Haier's initial rollout features a versatile software-defined wide area network (SD-WAN), with guidance from Orange Business consultants to tailor underlay and overlay options to Haier's needs.
• With businesses relying more on cloud services and distributed networks, ensuring data security, confidentiality, integrity, and compliance is crucial. Deploying SD-WAN as a managed service not only enhances network security but also helps companies meet their legal obligations in this Cloud-centric landscape. By positioning SD-WAN at the network's edge, organizations can bolster their security posture against potential threats, further fortifying their overall security stance.

Germany to Hold to a Major Share

• Cloud computing has become a cornerstone of modern IT infrastructure in German enterprises. This technology, which provides IT resources like software, storage, and computing power over the Internet, enables companies to streamline their operations. Data from the Munich-based IFO Institute, a renowned economic research entity, as of July 2023, revealed that 46.5% of German companies integrated cloud computing into their operations, with an additional 11.1% in the planning stages. Moreover, 18.2% of surveyed companies are deliberating the adoption of this technology. Given that the cloud enhances WAN performance by facilitating secure, reliable, and scalable connections across various sites, its swift uptake in Germany bodes well for the country's SD-WAN market.
• Germany is experiencing a surge in cloud technology investments. In a notable move, AWS announced its plans for a 'sovereign cloud' region in Brandenburg, set to launch by the close of 2025. This initiative, backed by an investment exceeding EUR 7.8 billion (~USD 9.70 billion), aims to bolster data residency in Europe.
• After the COVID-19 pandemic, remote work entrenched itself as a permanent feature in German firms. Presently, 80% of companies in the information sector have their staff working remotely at least once a week. Even in the traditionally office-centric manufacturing sector, this figure is at 45%, as reported by The ZEW - Leibniz Centre for European Economic Research in Mannheim, Germany. SD-WAN emerges as a viable solution, especially for firms leveraging cloud-based communication systems, offering robust network security alongside scalability.
• Over the past five years, Germany has witnessed a steady rise in IoT adoption, underscoring the technology's pivotal role in contemporary business landscapes. Notably, Caburn Telecom, a prominent IoT connectivity provider in Germany, reports that remote/smart service and maintenance technologies boast a 50% adoption rate in the country, surpassing the global average of 28%. Meanwhile, SD-WAN technology empowers businesses to programmatically manage their devices and networks, streamlining operations that were previously manual. Beyond its role in securely linking remote users at branch offices, SD-WAN's significance extends to efficiently overseeing IoT devices across global networks. This synergy positions SD-WAN as a crucial enabler for the burgeoning IoT ecosystem in Germany, offering a robust and secure network infrastructure capable of handling the escalating data deluge from IoT devices.
• As of February 2024, Germany led Europe in colocation data center markets, boasting 522 data centers, the highest count in the continent. The surge in cloud adoption, coupled with the integration of AI and IoT, is propelling businesses to consider constructing hyperscale data centers to cater to Germany's escalating data needs. Leveraging SD-WAN, companies effortlessly extend their WANs to various data centers, branches, and public clouds, reducing the need for manual interventions. Furthermore, SD-WAN not only enhances performance but also streamlines operations for businesses utilizing cloud-based and SaaS applications, offering them direct connectivity to these platforms. Consequently, this trend is fueling the demand for SD-WAN solutions in the region.

Europe Managed SD-WAN Services Industry Overview

The European managed SD-WAN services market is fragmented in nature. Some major players in the market studied are Cisco Systems Inc., Vodafone Group PLC, NTT Limited, and Palo Alto Networks. Players in the market are adopting strategies such as partnerships, agreements, innovations, and acquisitions to enhance their service offerings and gain sustainable competitive advantage.

• May 2024: Hughes collaborated with Netskope to offer customers a SASE solution. This solution merges Hughes' managed SD-WAN services with Netskope's renowned secure service edge (SSE) solutions. SASE, an innovative network architecture, unifies SD-WAN and SSE into a single cloud service. This integration aims to streamline WAN deployments while enhancing both efficiency and security.
• February 2024: VMware introduced the VMware VeloCloud SASE, a unified SASE solution that merges VeloCloud SD-WAN with Symantec SSE.

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