Global Application Delivery Controller Market: Analysis By Form Factor, By End-User, By Region Size and Trends with Impact of COVID-19 and Forecast up to 2028
NEW YORK, March 9, 2023 /PRNewswire/ -- The global application delivery controller market was valued at US$4.79 billion in 2022. The market value is expected to reach US$9.40 billion by 2028. An application delivery controller (ADC) is a network component that manages and optimizes how client machines connect to web and enterprise application servers. In general, a controller is a hardware device or a software program that manages or directs the flow of data between two entities.
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Years ago, the application delivery controller market was high-end-only, as all ADCs were application-specific integrated circuits (ASIC) based and inherently expensive. Today's ADC devices provide a mix of high-end products for major e-commerce sites, as well as the midmarket and SMBs with lower performance demands and budget constraints. On the other hand, the pandemic has also positively influenced the demand for ADCs as the adoption of cloud computing has accelerated. The market is expected to grow at a CAGR of approx. 12% during the forecasted period of 2023-2028.
Market Segmentation Analysis:
By Form Factor: The report provides the bifurcation of the market into three form factors: ADCaaS, Software Virtual Appliance, and Appliance. ADCaaS held the highest share of the market. As workloads have shifted, and continue to shift, to cloud platforms, form factors by which ADC functionality is delivered also continue to shift from appliance-based to software- and cloud-based. Moreover, the amount of traffic flowing through data centers worldwide is expected to increase in the coming years. This would propel the market growth for ADCaaS.
By End-User: The report further provides the analysis based on end-users: IT and Telecom, Retail, Healthcare, Government, BFSI, and Others. IT and telecom held the highest share in the market, whereas BFSI is expected to be the fastest-growing segment in the forecasted period. Cloud computing offers modern telecom businesses scalability, flexibility, security, and operational efficiency at a low cost. Owing to this benefits, telecom industry is increasing the adoption of cloud computing and hence the need for ADC is increasing. On the other hand, spending on the 5G infrastructure would also boost the growth of the ADC market in the coming years.
By Region: The report provides insight into the application delivery controller market based on the regions namely, North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America held the major share of the market in 2022. Whereas, Asia Pacific is expected to be the fastest-growing region in th forthcoming years. In the US, the ADC market is flourishing owing to the sharp rise in cybercrimes, massive adoption of the Internet of Things, and rollout of 5G networks. Moreover, data traffic is also increasing in the US. The data traffic generated per minute of use would increase significantly in line with the expected uptake of gaming, XR, and video-based apps.
UK businesses are steadily adopting a cloud-first approach, and a growing number of companies would move a large majority of their IT to the cloud in the coming years. The UK government has also been strongly supporting the adoption of cloud technologies. The increase in cloud adoption would support the growth of the ADC market in the UK in the coming years.
According to the World Bank, the pandemic has led to increased use of digital payments in Asia Pacific region. In India, more than 80 million adults made their first digital merchant payment after the start of the pandemic, while in China over 100 million adults did. The increase in digital payments has further led to an increase in the adoption of application delivery controllers.
Growth Drivers: The global application delivery controller market growth is predicted to be supported by numerous growth drivers such as rapid growth of data centers, increasing number of internet users, growing IT services spending, rise in penetration of applications, advantages of application delivery controller, growth of SMEs, and many other factors. With the advent of DevOps, application teams are getting more aggressive and are rolling out applications at an unprecedented volume and speed. New applications in an enterprise-grade environment need to be able to scale to handle traffic from hundreds or thousands of users, and they demand high availability. Enterprises leverage ADCs to improve the reliability, security, and performance of applications.
Challenges: However, the market growth would be negatively impacted by various challenges such as difficulty in managing dynamic change requests, etc.
Trends: The market is projected to grow at a fast pace during the forecast period, due to various latest trends such as increasing adoption of cloud applications, the advent of 5G networks, the shift from hardware ADC to software /VDAC, the rise of DDoS attacks, etc. ADC platforms mitigate and create a line of defense against DDoS attacks. With the capabilities of SSL offloading, ADCs can find out the potentialities of DDoS attacks based on SSL traffic as the servers and applications are not exposed. Thus, the rise in DDoS attacks is expected to increase the growth of the ADC market in the forthcoming years.
Impact Analysis of COVID-19 and Way Forward:
The COVID-19 pandemic has had a positive effect on the application delivery controllers industry's growth in 2020. The pandemic has substantially spurred the work/learn-from-home trend due to the containment measures taken across the world. As a result, most companies have increased their cloud usage by more than they planned due to the pandemic, resulting in higher cloud spending. This marks a significant shift in the use of cloud-based solutions, from purely data storage solutions to environments in which data is used transactionally and supports day-to-day business operations. The increased adoption of cloud computing has increased the demand for application delivery controllers and is expected that it would continue to contribute to market growth in the post-pandemic era.
The global application delivery controllers market is competitive in nature. The key players in the global application delivery controllers market are:
Amazon.com, Inc. (Amazon Web Services, Inc.)
Microsoft Corp. (Microsoft Azure)
A10 Networks, Inc.
Cisco Systems, Inc.
Progress Software Corporation (Kemp Technologies)
Barracuda Networks, Inc.
Citrix Systems, Inc.
Array Networks, Inc.
Some of the strategies among key players in the market are mergers, acquisitions, and collaborations. Companies are also shifting from appliance based market to virtual and as a service offerings. Over the last five years, F5 has made three strategic acquisitions. These acquisitions not only have helped diversify F5's revenue mix further away from appliances but also set the stage for another shot at transforming the business to attempt to capture share in segments of its market that are growing.
In 2022, the top five vendors (AWS, F5, Citrix, Google, and Microsoft) held approximately 80% share of the market. By 2022, AWS controlled almost two-thirds of the ADCaaS market. In AWS's revenue, ADC functionality offered by third-party infrastructure providers was being incorporated into new application development on the same platform on which applications were being developed.
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