Software-defined Networking & Network Function Virtualization Market - Forecast(2024 - 2030)

Software-defined Networking & Network Function Virtualization Market Overview

The global software-defined networking & network function virtualization market size is forecast to reach US$ 90 billion by 2027, growing at a CAGR of 28.2% from 2022-2027. Software-defined networking (SDN) is away to network that uses software-based controllers or application programming interfaces (APIs) based on cloud computing to communicate with underlying hardware infrastructure and direct traffic on a network. Network functions virtualization(NFV) is a virtual network which acts as the replacement of network appliance hardware with virtual machines. This is used in various sectors like power, BFSI, retail, manufacturing, healthcare and many others in network applications or functions like intrusion detection systems, load balancing or firewalls. The increasing technology in the IoT based devices and investments in the same has fueled the need of software-defined networking and network function virtualization industry to grow further. However, the cyberattacks and hacking activities pose a threat which are tried to be eliminated using intrustion detection devices and other network solutions.

Software-defined Networking & Network Function Virtualization Market Report Coverage

The report: “Software-defined Networking & Network Function Virtualization Industry Outlook – Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Software-defined Networking And Network Function Virtualization industry.

By Product: Software, Services, Physical Appliances
BySDN type: OpenSDN, SDN by Application Programming Interfaces(APIs), SDN Overlay Model, Hybrid SDN
By Application: Power and Energy, Government, IT & Telecom , BFSI, Education, Manufacturing, Retail, Transportation and Logistics, Defense, Healthcare, Others
By End User: Cloud Service Providers ,Technology Service Providers , Enterprises
By Geography: North America (U.S, Canada, Mexico), Europe(U.K, Germany, France, Italy, Spain,Others), APAC (China, Japan, South Korea, India, Australia, Others), South America (Brazil, Argentina, Others), RoW (Middle East, Africa)

Key Takeaways

• The SDN and NFV market segmented by SDN type, hybrid SDN type is expected to acquire around 11% of the market share of global software-defined networking & network function virtualization market during the forecast period of 2022-2027.
• The software-defined networking & network function virtualization market share of the application based segment accounts for 30% by the IT and Telecom sectorin 2021 and is expected to grow during the forecast period 2022-2027.
• North America market held the largest share of 38% in 2021, owing towell established IT companies with high capital investment to develop this technology further.
• The requirementof advanced network architecture to manage the big data generated by the organizations, increase in cloud computing and services, complex networks and traffic, and the management of geographically spread network assets due to globalization drives the market.

Global Software-defined Networking & Network Function Virtualization Market Value Share, By Geography, 2021 (%)

Software-defined Networking & Network Function Virtualization Market Segment Analysis- By Product

The software defined networking and network function virtualization market by product has been segmented into software, services, physical appliances.The services segment held the largest Software-defined Networking & Network Function Virtualization market share and is expected to grow at the fastest over the forecast period at a CAGR of over 41% in the period of 2022-2027. Organizations are striving to optimize the orchestration span of control across both new and old systems as well as offer converged and composite services. Moreover, the need for extending orchestration capabilities for self-services in B2B and B2C scenarios is on the rise.The rising deployment and integration of the solutions by the technology service providers and cloud service providers fuelled the growth of service sector.In 2020,CISCO, a SDN service and solutions provider published the ‘Global Networking Trends’ report which stated that SDN has seen wide adoption across data centers (64%), WANs (58%), and access networks (40%).

Software-defined Networking & Network Function Virtualization Market Segment Analysis- By Application

The software defined Networking and Network Functioning market by application is segmented into Power and Energy, Government, IT & Telecom, BFSI, Education, Manufacturing, Retail, Transportation and Logistics, Defense, Healthcare and Others. IT and Telecom sector holds the largest share for over 30% of this market share as of 2021 and is expected to grow over the forecast period as a result of the increasing adoption of SDN solutions with rise in implementation of IoT applications in conjunction with software defined networking operations. This is becauseSDNs will eliminate the issues and induce efficiencies to help the data generated by IoT to be processed without placing a larger strain on the network.In February 2022, iBASIS, the leading provider of communications solutions for operators and digital players worldwide, announces today that its owner, Tofane Global (TOFANE), the leading international communications solutions group, acquired Simfony, an Internet of Things (IoT) Platform-as-a-Service provider and Mobile Virtual Network Enabler (MVNE).Simfony’s platform, built on the latest architecture concepts such as Software Defined Network (SDN) and Network Functions Virtualization (NFV), ensures rapid time-to-market and elasticity for an unlimited number of connected devices. It enables greater flexibility and agility using software innovation adding to iBASIS’ numerous patented technologies in IoT.

Software-defined Networking & Network Function Virtualization Market Segment Analysis- By Geography

North America has the largest share of market size in global Software-defined Networking And Network Function Virtualization industry, in 2021, with a share of around 38% and is also analyzedto have significant growth during the forecast period 2022-2027.North America also is the origin and headquarter of all Software-defined Networking And Network Function Virtualization top 10 companies in the industry. The widespread use of cloud computing, virtual networks, mobility services, and Bring Your Own Device (BYOD) cultureand so on have been attributed to the market growth. In addition, growing use of IoT technology for device to device communication among virtual machines through wireless networks isanalysed to fuel the software-defined networking & network function virtualization market growth.As North America has the fastest growing 5G network to support the growing IoT technology as well as large investmentsto develop the technologies further. In January 2021, the Opensignal data finds that 5G download speeds from the three big U.S. operators are in the 47 Mbps to 58 Mbps range well sufficient for IoT applications and uses. 

Software-defined Networking & Network Function Virtualization Market Drivers

The Investment of Communications Service Providers (CSP) in software-defined networks to automate network infrastructure is increasing

Communications service providers (CSPs) are facing highly disruptive technological changes as consumers have an unstoppable hunger for digital services.Now, with 5G, network virtualization and cloudification are essentials for network services delivery for customer as well as service provider. Network function virtualization will enable 5G networks in which various virtual networks run on top of a single, physical infrastructure using technology that allows the network to be shared dynamically. The report in January 2020 published by IBM states that- 82% of CSP Innovators surveyed identified faster time-to-market as the key driver for network virtualization. 80% of CSP Innovators surveyed are using or plan to use AI to perform predictive network maintenance. 65% of CSP Innovators surveyed see better customizability as the key benefit of open source.This is because most CSP Innovators are already investing in NFV/SDN technology to support current and new services for digital reinvention. Another report by Digital infrastructure worldwide forecast 2019–2023; carried in January 2020 Communications service provider (CSP) spending on digital infrastructure (including SDN and NFV) will grow from US$ 18.1 billion in 2018 to US$ 53.7 billion by 2023, at a CAGR of 24% with respect to the trends and factors driving this market. The growth in investments of CSP in cloud computing, SDN and NFV is due to the increasing virtualisation of IT/OSS/BSS applications and the adoption of public and hybrid clouds and SaaS models. Ultimately, 5G, NFV, SDN and cloud-based platform business models are all inextricably linked an helps drive the investments in these markets.

There is a rise in the development and implementationof the IoTtechnology which uses SDN and NFV networks

The Internet of Things (IoT) connects smart devices to enable various intelligent services. Organizations have many different uses for machine to machine applications in IoT.According to Cisco, 500 billion devices are expected to be connected to the internet by 2030. Another report by Gemalto in 2019, states, 48% of businesses admit that they cannot detect IoT security breaches on their network.Nearly half of the companies that use IoT can’t identify when their network is compromised. The pandemic also becomes a key factor in the increase of cyberattacks on IoT devices recently. SDN and NFV function together where SDN can minimize that data center investment and the programmable network enables IoT to address VPN exhaustion. Network functions virtualization (NFV) is the replacement of network appliance hardware with virtual machines.A huge numbers of devices and large amounts of data are involved in IoT, but none of them istuned for supporting network management and control. The Software-defined Networking (SDN) together with the data generated by IoT applications can enhance the control and management of IoT in terms of flexibility and intelligence.SDN also empowers simplified management and network programmability. The underlying network infrastructure and resources are abstracted for applications and network services, which brings significant benefits to IoT.

Software-defined Networking & Network Function Virtualization Market Challenges

The SDN controllers are prone to hacking and cause cybersecurity challenges for the system

Cyberattacks on cloud computing, SDN, NFVand various software technologies has always been a threat.In SDN, one of the most compromised section is the SDN controller at the control plane layer. Due to the centralization design of the SDN, the SDN controller becomes access point and attackers can attempt to manipulate the entire network just through the controller. However,Service providers can quickly add, drop, and change the services they offer by using SDN control software and VNFs on commercial servers, rather than having to invest in new, specialized network hardware and manually reconfigure the network to deploy each new service.In a distributed 5G environment, core network resources will need to peer into deployed customer premise equipment to collect real-time information. According to SolarWinds Inc., networks with a centralized SDN firewall may lean towards using a stateless configuration to reduce the compute resources needed at the control layer This is not without drawback, however, as a stateless tool is more susceptible to an attacker conducting a multi-hop attack. Even though the threat is growing but the technologies to prevent and secure them are also growing further.For example, there are intrusion detection devices to detect and analyze both inbound and outbound network traffic for malicious activities.In July 2021,Palo Alto Networks announced a virtual next-generation firewall designed specifically for use with Nvidia’s BlueField line of data processing units (DPUs).

There are numerous challenges for smooth transition from traditional to Software-Defined Networking and Network Function Virtualization system

To efficiently transform the existing technology and traditional infrastructure is a major task for all stakeholders. A poorly planned transition can lead to network outages, impaired monitoring and fault management systems, or, most detrimental of all, stalled or failed migration. It is critical to focus on service continuity with minimal disruption. Optimally, the consistency of OpenFlow protocol versions is maintained between SDN controllers and switches during the migration. Pre- and post-migration checklists that address specific applications will also help ensure a smooth migration.One of the most important concepts in SDN is Control Plane and Data Plane separation and another issue that probably comes to mind is that of having underlay and overlay networks. In March 2022, Pluribus Networks announced its vision and architecture for Unified Cloud Networking, featuring the Pluribus Unified Cloud Fabric. This industry-first architecture enables a unified networking model across distributed clouds and across switches and server-based data processing units (DPUs) of organizations which improves networking performance, security, operational efficiency and scalability to equip customers to rapidly deploy state-of-the-art cloud-native applications.

Software-defined Networking & Network Function Virtualization Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Software-defined Networking And Network Function Virtualization industry. The Software-defined Networking And Network Function Virtualization top 10 companies include:

• Cisco Systems, Inc.
• Hewlett Packard Enterprise Co.
• Intel Corporation
• Pluribus Networks Inc.
• IBM
• Juniper Networks 
• Verizon
• Microsoft
• Qualcomm
• AT&T

Recent Developments

• In 2021, Cisco, Fortinet, HPE-Aruba, and VMware lead the evolving and highly-competitive software-defined wide-area networking (SD-WAN) market according to a new report from IDC based on the data.These advancements will continue to make SD-WAN a key technology for enterprises as they look to build out their digital transformation journeys in 2022 and beyond.
• In December 2021, as software-defined networking becomes more dominant, the application programming interfaces(APIs) offered up by one networking vendor can more severely limit interoperability with products made by others as per the report by Network world.
• In August 2021, deal to acquire software-defined networking company Masergy will give Comcast Business a boost in the enterprise SD-WAN and SASE markets.This gives Comcast a boost in its drive to compete with Verizon and AT&T as well, not to mention helps diversify its business at a time when consumers are ditching cable TV.
• In February 2022, Juniper Networks Inc. is extending its presence in the secure access service edge or SASE market with a cloud-based firewall-as-a-service offering introduced in the market. It exactly duplicates the functions of the company’s on-premises and virtualized firewalls.

Relevant Report Titles:

Sdn Orchestration Market– Forecast (2022 – 2027)

Report Code: ITR 85617

Software-defined Wide Area Network Market- Forecast (2022 – 2027)

Report Code: ITR 78713

Software-defined Networking And Network Function Virtualization Market -Forecast 2021 - 2026

Report Code: ITR 94804

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