The key drivers include the rise of AI-powered workloads and the shift to hybrid cloud environments.

Dell’Oro Group Senior Director, Enterprise Security and Networking Mauricio Sanchez said that integrating AI across enterprise IT and adopting multi-cloud strategies have created unprecedented challenges for traditional WAN architectures.

“Distributed Cloud Networking offers a much-needed reimagining of the enterprise WAN, aligning security, scalability, and performance with modern IT requirements," he said.

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

The report also highlights several critical trends. Multi-cloud networking is forecasted to exceed $6 billion in revenue by 2028, driven by the complexity of hybrid environments and the need for seamless, cloud-to-cloud connectivity.

 WAN-as-a-Service (WANaaS) is expected to contribute over $8 billion to the market by 2028 as enterprises move away from rigid MPLS architectures in favor of scalable, software-defined middle-mile solutions.

The Secure Access Service Edge (SASE) segment within Distributed Cloud Networking is anticipated to grow at a CAGR of 50 per cent, reflecting the prioritisation of secure, user-edge connectivity integrated with WANaaS and multi-cloud frameworks.

The market will see a dominant shift to as-a-service solutions, accounting for 79 per cent of total revenues between 2024 and 2028, moving away from hardware-centric to subscription-based architectures.

While North America remains the largest market, the highest growth rates are expected in EMEA, APAC, and CALA, fueled by regional cloud expansion and edge computing investments.

The transition to Distributed Cloud Networking reflects the evolving landscape of enterprise IT, driven by the need to accommodate AI, hybrid workforces, and multi-cloud environments. As companies continue to prioritise flexibility and scalability, the market is set to undergo significant transformation, the report said.