SNS Research report forecasts NFV, SDN market growth
A new report from SNS Research suggests the service provider network functions virtualization (NFV) and software-defined networking (SDN) market is expected to swell at an annual compound growth rate (CAGR) of about 45% over the next three years. Annual investments are anticipated to hit almost $22 billion by the end of 2020, according to the report.
NFV And SDN are two emerging technologies that are changing the way telecom service providers manage their networks. NFV consists of decoupling software from hardware, while SDN involves centrally controlling network behavior using application program interfaces (APIs), or open programmatic interfaces like OpenFlow. Among the key benefits of NFV and SDN include the ability to automatically deliver tailored services quickly, whyle reducing operating expenses (OPEX) and capital expenditure (CAPEX).
According to the report, service providers have started making major investments in NFV and SDN, encompassing a variety of use cases like uCPE/vCPE, SD-WAN, vEPC, vIMS, Cloud RAN and vCDN. Software-centric networking is being embraced by the enterprise and data center segment as well. The research firm estimated that SDN and network virtualization investments in this segment constituted for $12 billion last year alone.
“New market players are beginning to emerge as service providers accelerate their transition to software-centric networks,” according to a summary of the report. “For example, with their early wins in NFV-compliant mobile core and IMS platforms, companies such as Mavenir Systems and Affirmed Networks have emerged as direct competitors to established wireless network infrastructure giants.”
Such findings are underscored by major service like AT&T, which has pledged to virtualize and control over 75% of its network by 2020 using software-defined architecture. With this goal in mind, the company set a goal to virtualize 55% of its network with software by the end of last year. As of the end of the quarter, approximately 45% of AT&T’s network functions have been virtualized, according to FierceTelecom.