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Service-Centric Enterprise WAN Architecture to Fuel 34 Percent CAGR Growth

REDWOOD CITY, Calif. – January 21, 2025 – According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the Distributed Cloud Networking market is projected to grow from $4 B in 2023 to $17 B by 2028, achieving a compound annual growth rate (CAGR) of 34 percent. This growth is driven by enterprises’ transition to hybrid cloud environments, the rise of AI-powered workloads, and the increasing demand for elastic, software-defined networking solutions.

“The integration of AI across enterprise IT and the adoption of multi-cloud strategies have created unprecedented challenges for traditional WAN architectures,” said Mauricio Sanchez, Sr. Director, Enterprise Security and Networking at Dell’Oro Group. “Distributed Cloud Networking offers a much-needed reimagining of the enterprise WAN, aligning security, scalability, and performance with modern IT requirements.

“As businesses adapt to AI-driven workloads and hybrid workforce models, the shift to service-centric, cloud-native networking will define the next decade of enterprise transformation. Vendors prioritizing agility, automation, and integration will emerge as market leaders,” said Sanchez.

Additional highlights from the Distributed Cloud Networking Advanced Research January 2025 Report include:

  • Multi-cloud Networking Leads Growth: Multi-cloud networking revenues will reach over $6 B by 2028, fueled by the complexity of hybrid environments and the need for seamless cloud-to-cloud connectivity.
  • WAN-as-a-Service Dominates Revenue Share:  WANaaS will contribute over $8 B to the market by 2028 as enterprises transition from rigid MPLS architectures to scalable, software-defined middle-mile solutions.
  • SASE Integration Accelerates: The SASE segment within Distributed Cloud Networking is forecasted to grow at a 50 percent CAGR, reflecting enterprises’ prioritization of secure, user-edge connectivity integrated with WANaaS and multi-cloud frameworks.
  • Cloud-First and Opex Models Prevail: As-a-service solutions will dominate the market, accounting for 79 percent of total revenues between 2024 and 2028, signaling a clear shift from hardware-centric to subscription-based architectures.
  • Regional Trends Favor EMEA and APAC: While North America remains the largest market, the highest growth rates are expected in EMEA, APAC, and CALA, supported by regional cloud expansion and edge computing investments.

 

About the Report

Dell’Oro Group’s Distributed Cloud Networking Advanced Research Report provides an in-depth analysis of the evolving enterprise WAN landscape. It highlights how Distributed Cloud Networking solutions address the demands of AI-powered workloads, hybrid cloud environments, and edge computing. The report includes forecasts through 2028, vendor analysis, and insights into market dynamics, such as the shift to service-centric architectures and integrating multi-cloud networking, WANaaS, and SASE solutions.

Our Distributed Cloud Networking ARR identifies nearly 30 vendors offering new alternatives that we call Distributed Cloud Networking solutions and satisfy the contemporary enterprise WAN networking needs across the user edge, enterprise WAN middle mile, and cloud/application edge. It quantifies the Distributed Cloud Networking market against the backdrop of existing markets, such as the communications service provider MPLS/DIA, software-defined cloud interconnect (SDCI), enterprise routing (high-end and access), SD-WAN, SSE, micro-segmentation, content delivery networks (CDN), load balancing, and web application firewalls (WAF). Also included is an analysis of market drivers and inhibitors expected to shape market growth over the next five years. For more information about the report, please contact us at dgsales@delloro.com.

About Dell’Oro Group

Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, networks, and data center infrastructure markets.  Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions.  For more information, contact Dell’Oro Group at +1.650.622.9400 or visit https://www.delloro.com.

 

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