Skip to main content

Telecom Networking Market Disruption is Now Inevitable

There once was a time when traditional telecom service provider networking vendors were gratified that their proprietary platforms ensured continued success. As long as carrier customers agreed to buy products that locked them into the market leader's technology and associated ecosystems, they were assured high-profit margins and limited competition.

In fact, not that long ago, some industry analysts actually believed that Cisco could maintain 50%+ market share in several of their product categories, for an unlimited period of time. After all, they had already achieved that goal -- in some cases, for more than two decades. The market outlook seemed to be predictable, until one day it wasn't.

Why Telecom Networking is Primed for Disruption

For the past several years, the telecom industry has been moving toward a major network and operational transformation epitomized by software-defined networking (SDN) and network functions virtualization (NFV) with the top goals of automation and service agility.

Carriers have defined the vision, goals and architectures and are progressing through use cases, proof-of-concept projects, field trials and a small but growing number of commercial deployments.

The partially proven promise keeps the industry moving as fast as it can, but this is still early days in this long-term -- 10- to 15-year -- digital transformation of service provider networks.

SDN deployments started in Japan with NEC and NTT, and the nation's forward-looking service providers have been active in deploying real (but relatively small) commercial deployments. China is coming on strong, with many sizeable commercial deployments in 2015 and 2016.

And, telecom service providers in North America and Europe are also leading the charge to deploy SDN, and are anticipated to account for 13 percent of total 2015–2020 SDN revenue.

Given these factors, the telecom service provider SDN market -- including hardware, software and services -- is forecast to grow from $289 million in 2015 to $8.7 billion in 2020, with a 2015–2020 compound annual growth rate (CAGR) of 98 percent, according to the latest worldwide market study by IHS Technology.


Additional highlights from the study include:

  • SDN and NFV represent the shift from a hardware focus to software one: Software and outsourced services will comprise 46 percent of SDN revenue in 2020.
  • SDN orchestration and controller software revenue is forecast to grow to over $1.8 billion in 2020.
  • But by 2020, there will be more value in SDN apps than in orchestration and control, which will be priced reasonably due to competitive pressure.

Popular posts from this blog

Digital Transformation Growth Defies Market Volatility

The forward-looking CEO's commitment to ongoing investment in Information Technology (IT) is persistent. Worldwide IT spending is forecast to total $4.4 trillion in 2022 -- that's an increase of 4 percent from 2021, according to the latest worldwide market study by Gartner, Inc.   "This year is proving to be one of the noisiest years on record for CIOs," said John-David Lovelock, vice president at Gartner . Regardless, digital transformation remains a high priority across the globe. Geopolitical disruption, inflation, currency fluctuations, and supply chain challenges are among the many market volatility factors vying for attention, yet contrary to what Gartner saw at the start of 2020, enterprise CIOs are accelerating IT investments in 2022. Digital Transformation Market Development As a result, purchasing and investing preferences will be focused on areas including data analytics, cloud computing, seamless customer experiences, and IT security. Inflation impacts on

IoT Device Management Demand Gains Momentum

More forward-thinking CIOs and CTOs are focused on the adoption of the Internet of Things (IoT). Management challenges are top of mind for those who have already deployed a large number of sensors and associated network edge devices. Device management services are evolving in response to a greater breadth of new device technologies such as edge intelligence and related connectivity solutions, as well as the customer scalability and security of IoT deployments. But forward-looking suppliers are also preparing for a world where 41.3 percent of the connected devices will be using some form of Low Power Wide Area (LPWA) technologies by 2026. IoT Device Management Market Development Since IoT customers increasingly need to manage a larger fleet of connected devices, ABI Research now forecasts that IoT device management services will exceed $36.8 billion in revenues by 2026. Standardization is beginning to play a bigger role in device management services, as more connected devices use LPWA t

Anywhere, Anytime Workplace Demand for SASE

The ongoing adoption of flexible working models within the enterprise market has significant implications for typical IT organizations that must now support knowledge workers and front-line employees that operate outside the corporate network perimeter. The global COVID-19 pandemic created IT networking and security challenges. The expansion of the distributed workforce, an increasing reliance on cloud computing infrastructure, and the requirement to securely connect online employees -- wherever they choose to work, at any given moment in time. Legacy IT solutions that have rigid network underlays and a requirement for on-premises infrastructure cannot adequately deal with these trends. This 'Anywhere, Anytime Workplace' led to demand for new Secure Access Service Edge (SASE) solutions, with networking and security delivered as-a-service. Anywhere, Anytime Workplace Market Development   Although converging networking and security capabilities offer enterprises a promising solut