- DCN is a new umbrella term that helps capture how cloud connectivity is changing
- Vendors cross the multi-cloud networking, WAN-as-a-Service and SASE realms
- AI is shaping where the market is headed, with new performance and security requirements
The cloud is no longer a monolith. It now spans public, private, neocloud, sovereign and edge iterations. And with the advent of AI, security and performance needs will change. These factors require new understanding of how cloud assets connect.
Enter Distributed Cloud Networking (DCN).
There are plenty of labels for different kinds of cloud connections across the branch edge, cloud networking and security. But current terms usually describe only a small slice of what has become a much larger, integrated space, Dell’Oro Group Senior Director Mauricio Sanchez told Fierce.
“DCN is useful as an umbrella because it captures the convergence happening as enterprises modernize the WAN into a distributed, cloud-delivered fabric that has to deliver connectivity, security, visibility, and performance end-to-end across users, sites, and cloud workloads,” he said. “The term is less about inventing a new category and more about reflecting that buyers are increasingly making decisions across previously separate domains.”
The DCN umbrella spans the Cloud/Application Edge, WAN Middle Mile, and User/WAN Edge categories, according to Dell’Oro. Key technologies across these focus areas include multi-cloud networking, WAN-as-a-Service, SASE, Cloud Network-as-a-Service, software defined interconnect and SD-WAN.
Vendor landscape
Because this market is rapidly evolving, vendors in the DCN realm tend to be focused on a particular foundational technology but straddle two or more of the main DCN categories, Sanchez said.
So, Cloud/Application Edge players tend to be multi-cloud networking vendors like Alkira, Aviatrix and F5, as well as hyperscalers who offer their own networking services.
WAN Middle Mile companies include WAN-as-a-service vendors like Cloudflare, Aryaka, Cato Networks and Cisco, as well as interconnect suppliers like Equinix and Megaport.
The User/WAN Edge segment tends to include vendors in the security space. Think SASE vendors, which, according to Gartner’s 2025 Magic Quadrant, include Palo Alto Networks, Fortinet, Netskope, Zscaler, Check Point and Cisco.
Where things are headed
There are a few trends shaping the future of the DCN market. The foremost, of course, is AI.
Sanchez said AI is raising the bar for performance, changing traffic patterns, increasing interest in automation and driving a need for integrated security controls. It’s also behind an expected wave of spending.
Gartner predicted spending on AI software and services will jump from $722.6 billion in 2025 to nearly $1.4 trillion in 2027. Meanwhile, the market for AI cybersecurity is expected to grow from around $25.9 billion to nearly $86 billion over the same period.
And in the backdrop, enterprises will continue to struggle with persistent cloud interoperability issues. Gartner has predicted that more than half of enterprises won’t get the expected results from their multi-cloud implementations by 2029.
It will be up to DCN players to help solve some of these challenges.
“DCN is becoming the architectural connective tissue for hybrid cloud and AI-era applications: it is where enterprises will increasingly expect consistent policy, visibility, and performance across users, middle-mile transit, and multi-cloud workloads,” Sanchez said.
“I expect continued convergence of MCN, WANaaS, and SASE capabilities, with clearer platform differentiation around operational simplicity, automation, and breadth of coverage across the three focus areas,” he said.
According to Dell’Oro Group, the DCN market was worth around $4 billion in 2023 and is expected to hit around $17 billion by 2028 and $21 billion by 2029. Multi-cloud networking and WAN-as-a-Service are expected to account for around $14 billion of the 2028 total.