Market Trends of Europe Managed SD-WAN Services Industry
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.
Understand The Key Trends Shaping This Market
Download PDF
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.
Get Analysis on Important Geographic Markets
Download PDF
