Skip to main content

Overall SDN and NFV Market will Reach $11B in 2018

Like any business that's investing heavily in new technology, telecom service providers must monitor their project ROI to determine if it has met the stated business outcome-related objectives. Now more than ever, project goals for bottom-line cost savings are aligned with equally important goals to enable top-line revenue growth.

In fact, telecom service providers view the creation of new revenue, quicker time to revenue attainment, and service provisioning agility as their top drivers for investing in Software-Defined Networking (SDN) and Network Functions Virtualization (NFV) projects.

Moreover, new research indicates some service providers have discovered that the business case for deploying SDN and NFV is marginal until the new revenue upside value is incorporated into the equation.

According to the latest global market study by Infonetics Research,  there is now a significant growth opportunity for the leading vendors that offer NFV and SDN hardware or software that's ultimately deployed in telecom service provider networks worldwide.

The findings from their latest study provides detailed analysis of the open-source SDN and NFV markets and their many facets -- from SDN router and switch hardware and associated platform software, to the many categories of NFV offerings.

Their detailed analysis included the virtualized network functions (VNFs) comprising policy, the mobile packet core and evolved packet core (EPC), IP multimedia subsystem (IMS) and security.

"For three years, the telecom industry has been abuzz over SDN and NFV, with anticipation and hard work developing the vision, goals, architectures, use cases, proof-of-concept projects, field trials, and even some commercial deployments," said Michael Howard, principal analyst for carrier networks at Infonetics Research.


He added, "We've been gathering data in this early market for nearly two years and are projecting the global telecom service provider SDN and NFV market to reach $11 billion in 2018."

To better understand spending in this emerging market, Infonetics has classified SDN and NFV hardware and software in three distinct categories. First, revenue from brand new SDN and NFV software, which they expect to make up 20 percent of the total SDN and NFV market in 2018.

Second, revenue that comes from products that companies will buy instead of buying something else -- what they refer to as "displaced" revenue, including NFV infrastructure (NFVI) hardware (servers, storage, switches) purchased instead of network hardware (routers, DPI, firewalls, etc.). This segment will make up about 12 percent of the market in 2018.

And third, revenue that generated from newly identified segments of existing markets -- the virtualized network functions (VNFs), ports on routers, switches, and optical gear that have become SDN capable. This last segment makes up the largest slice of the SDN and NFV pie, forecast at 68 percent in 2018.

Key highlights from the market study include:
  • Infonetics expects global carrier SDN and NFV hardware and software to grow from less than $500 million in 2013 to over $11 billion in 2018.
  • NFV represents the lion's share of the combined market, from 2014 out to 2018.
  • The value of NFV is in the virtualized network functions software -- the actual applications -- rather than the orchestration and control; VNF makes up over 90 percent of the NFV software segment.
  • SDN and NFV exemplify the shift from hardware to software -- SDN and NFV software are projected to make up of three-quarters of total revenue opportunity in 2018.

Popular posts from this blog

Demand for Quantum Computing as a Service

The enterprise demand for quantum computing is still in its early stages, growing slowly. As the technology becomes more usable, we may see demand evolve beyond scientific applications. The global quantum computing market is forecast to grow from $1.1 billion in 2022 to $7.6 billion in 2027, according to the latest worldwide market study by International Data Corporation (IDC). That's a five-year compound annual growth rate (CAGR) of 48.1 percent. The forecast includes base Quantum Computing as a Service, as well as enabling and adjacent Quantum Computing as a Service. However, this updated forecast is considerably lower than IDC's previous quantum computing forecast, which was published in 2021, due to lower demand globally. Quantum Computing Market Development In the interim, customer spend for quantum computing has been negatively impacted by several factors, including: slower than expected advances in quantum hardware development, which have delayed potential return on inve

AI Semiconductor Revenue will Reach $119.4B

The Chief Information Officer (CIO) and/or the Chief Technology Officer (CTO) will guide Generative AI initiatives within the large enterprise C-Suite. They may already have the technical expertise and experience to understand the capabilities and limitations of Gen AI. They also have the authority and budget to make the necessary investments in infrastructure and talent to support Gen AI initiatives. Enterprise AI infrastructure is proven to be expensive to build, operate and maintain. That's why public cloud service provider solutions are often used for new AI use cases. AI Semiconductor Market Development Semiconductors designed to execute Artificial Intelligence (AI) workloads will represent a $53.4 billion revenue opportunity for the global semiconductor industry in 2023, an increase of 20.9 percent from 2022, according to the latest worldwide market study by Gartner. "The developments in generative AI and the increasing use of a wide range AI-based applications in data c

Global Public Cloud Spending to Reach $1.35T

Most digital transformation is enabled by cloud solutions. Worldwide spending on public cloud services is forecast to reach $1.35 trillion in 2027, according to the latest worldwide market study by International Data Corporation (IDC). Although annual spending growth is expected to slow slightly over the 2023-2027 forecast period, the market is forecast to achieve a five-year compound annual growth rate (CAGR) of 19.9 percent. "Cloud now dominates tech spending across infrastructure, platforms, and applications," said Eileen Smith, vice president at IDC . Public Cloud Services Market Development IDC believes that most organizations have adopted the public cloud as a cost-effective platform for hosting enterprise applications, and for developing and deploying customer-facing solutions. Looking forward, the cloud computing model remains well positioned to serve customer needs for innovation in application development and deployment -- including as data, artificial intelligence