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Telecom Providers Adopt Software-Defined Infrastructure

Within the telecom sector, the ongoing shift to software-defined infrastructure -- where IT workloads run virtualized or containerized on industry-standard hardware and software platforms -- is happening at an unprecedented pace.

This transformation is visible across the whole communications industry, where entire data centers are now being converted from vertically integrated systems to software-defined IT infrastructure.

Telecom IT Infrastructure Market Development

According to the latest worldwide market study by International Data Corporation (IDC), this trend will continue unabated as telecom service providers seek to expand their sphere of influence on initiatives such as mobile media delivery, edge computing, the Internet of Things and connected devices.

In an industry where legacy business models and government regulations can no longer guarantee revenue growth, telecom service providers must address intense competition by advancing digital innovation and reducing their traditional IT operating costs.

Initiatives such as 5G wireless communications or rich media delivery via mobile platforms cannot be delivered via legacy platforms that are rigid, have scaling challenges, and require months of planning to deploy efficiently.

An assessment from IDC sized the market for IT compute and storage infrastructure at $10.81 billion in 2017. However, as telecom service providers aggressively build out their infrastructure, IDC projects this market to experience a five-year compound annual growth rate (CAGR) of 6.2 percent with investment totaling $16.35 billion in 2022.

Moreover, communication network providers worldwide have followed the hyperscale public cloud services provider operations model. They have focused on increasing their in-house software development efforts using open source stacks and embraced Agile development practices.

They've also partnered with systems integrators to convert their data centers to software-defined architectures, participated in industrywide infrastructure consortiums, and made a concerted effort to adopt cloud-native technologies and also move network function workloads onto a virtualized or containerized infrastructure.

They are shifting to a single infrastructure platform that supports current and new generation telecom-specific as well as business applications that can run interchangeably in virtual machines, containers, and bare metal.

IDC analysts observed that many telecom service provider CIOs and CTOs have already ushered in a model for flexible and scalable consumption of IT compute, storage, and networking resources.

Outlook for Telecom IT Infrastructure Innovation

"Telecoms are the forefront of the innovation curve," said Ashish Nadkarni, group vice president at IDC. "The shift to a software-defined infrastructure enables them to focus on innovation, drive operations costs down, and continue to differentiate based on the uniqueness of their products and services."

The resulting report from the market study presents IDC's inaugural forecast for a significant portion of the IT infrastructure market for telecom service providers. Revenue is presented for the overall market and each of the two market segments (infrastructure hardware -- consisting of servers, storage -- and infrastructure software).

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