A new report from IHS predicts the NFV market is set to explode 5-fold beginning this year
Analyst firms continue to report data backing growing demand for network functions virtualization across the telecom space.
The latest comes from IHS, which this week noted the global market for NFV hardware, software and services is set to surge from $2.3 billion this year to $11.6 billion in 2019. The numbers come from IHS’ latest “NFV Hardware, Software and Services” report.
The firm claims service providers are still “early” in their transformation towards virtualized network platforms, which it said is a 10- to 15-year process. Revenues from outsourced services geared towards NFV projects is expected to post a 71% compound annual growth rate from 2014 to 2019, with revenue from software-only video content delivery network functions for managing and distributing data forecast to grow 30-fold between 2015 and 2019.
“NFV represents operators’ shift from a hardware focus to software focus, and our forecasts show this,” explained Michael Howard, senior research director for carrier networks at IHS. “We believe NFV software will comprise over 80% of the $11.6 billion total NFV revenue in 2019. … The software is always a much larger investment than the server, storage and switch hardware, representing about $4 of every $5 spent on NFV.”
IHS earlier this year reported that 35% of telecom operators are planning to deploy NFV this year, yielding yet more evidence that despite its still nascent nature, carriers are moving rapidly toward NFV and virtualization platforms.
A recent report from ACG Research, and sponsored by Affirmed Networks and VMware, found mobile operators would begin saving money on NFV deployments within the first year and realize an investment payback within three years; adopting a virtualized evolved packet core can reduce capital expense by an average of 68% and operating expense by 67%; and that the deployment of virtualized network components can happen within six months, compared with an average of 15 months for traditional network hardware, resulting in a quicker time to market and return on investment.
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