Software-defined Networking & Network Function Virtualization Market – By Product , By SDN Type , By Application , By End User , By Geography - Opportunity Analysis & Industry Forecast, 2024-2030

Software-defined Networking & Network Function Virtualization Market Overview:

The Software-defined Networking & Network Function Virtualization Market size is estimated to reach $189.6 billion by 2030, growing at a CAGR of 28.2% during the forecast period 2024-2030. The Software defined Networking (SDN) and Network Function Virtualization (NFV) market have focuses on the transformation of conventional network infrastructures to flexible, software driven systems. The growth of this market is attributed to the fast adoption of 5G technology, the need for agile and scalable networks, and the need for cost efficient solutions that replace hardware with software-based functions. More demand is created by cloud migrations and proliferation of IoT devices. The two major trends in the Software defined Networking (SDN) and Network Function Virtualization (NFV) Market are adoption of edge computing and integration of AI and machine learning in network management. This adoption of edge computing allows SDN and NFV to process data closer to its source, which greatly reduces latency and improves real time performance for applications like IoT and autonomous systems. In addition, AI and machine learning completely change network management by offering predictive analytics, automation during optimization processes, and better decision making. For example, in October 2024, Juniper Networks launched its Juniper Secure AI-Native Edge solution, which combines AI driven networking and security for easier operations and better user experience. In August 2024, Broadcom also updated its VMware VeloCloud appliances to support scalable and efficient edge AI workload deployment for the AI application.

Software-defined Networking & Network Function Virtualization Market - Report Coverage:

The “Software-defined Networking & Network Function Virtualization Market Report - Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the Software-defined Networking & Network Function Virtualization Market.

COVID-19 / Ukraine Crisis - Impact Analysis:  

• The Software-defined Networking (SDN) and Network Function Virtualization (NFV) market was impacted by the COVID-19 pandemic, which caused rapid digital transformation of industries. As remote work became the new normal worldwide, organisations were quick to adopt SDN and NFV to improve network agility, scalability and security. Cloud based solutions and virtualized infrastructures were in high demand to continue business as usual. 
• Geopolitical tensions resulting from the Russia- Ukraine war only complicated the situation further by disrupting supply chains and IT investments in other affected regions. The increasing cybersecurity threats compelled a massive scale adoption of SDN and NFV to perform secure and resilient operations of the network. During uncertainties, organisations looked for robust virtualized solutions to counter risk and ensure business continuity. Geopolitical and economic factors were reinforcing the need for flexible, software defined networks, and this was reflected in steady global demand.

Key Takeaways:

North America Leads the Market

North America occupied the largest market share in the Software-defined Networking & Network Function Virtualization Market in 2023. The Software defined Networking (SDN) and Network Function Virtualization (NFV) market in North America is leading because of its rapid adoption of 5G and advanced networking technologies. In North America, smartphone subscriptions on 5G are at 59 %, with over 300 million people (90 percent of population) have access to 5G services across low-, mid- and high band spectrums in the region, according to Ericsson. It provides this robust infrastructure, which enables technology innovation and adoption in sectors such as sports venues, airports and universities. Among other things, Fixed Wireless Access (FWA), one of the main use cases for 5G, has more than 9 million connected locations in the U.S. These advancements are further complemented by a robust technology ecosystem that fosters innovation in 5G, AI and cloud, and tests and scales these innovations globally to cement North America’s leadership in the SDN and NFV market.

BFSI is the Largest Application

The Software-Defined Networking (SDN) and Network Function Virtualisation (NFV) market is primarily driven by the BFSI (Banking, Financial Services and Insurance) sector owing to the high growth and critical need for advanced networking solutions. The total assets of China’s banking institutions increased by 9.9% year on year to 5.73 trillion yuan as of the end of Q4 2023, according to the National Financial Regulatory Administration of China. During the same period, insurance companies had assets of $41.23 billion, a rise of 10.4% from the previous year. The sector's rapid expansion is accompanied by a surge in loan disbursement and insurance policy growth including inclusive loans to micro and small enterprises up by 23.3% year on year. SDN and NFV are essential to the demands of these networks in order to be scalable, secure, and efficient for real time data processing, increased cybersecurity, and operational agility. Due to the adoption of cloud based and automated technologies by the financial institutions, the BFSI segment is in the forefront to adopt SDN and NFV solutions, thereby making it the largest application in this market.

Enterprises Lead the Market 

The Enterprises segment dominates the Software defined Networking (SDN) and Network Function Virtualisation (NFV) market as enterprises move towards Virtualized Network Functions (VNFs) to cut costs, improve scalability and increase operational efficiency. Decoupling network functions from dedicated hardware and VNFs such as virtual enterprise routers and session border controllers (eSBCs), allows them to be deployed on cloud platforms or general-purpose hardware. The transformation is easy to manage network, and enables following critical functions such as load balancing, WAN acceleration, and secure connectivity. Patton Electronics said such virtualization not only cuts capital expenditures but also simplifies operations, making it a preferred solution for enterprises. This also holds good for India as the growth of the Micro, Small and Medium Enterprises (MSMEs) has been fast here. As per India Brand Equity Foundation, the number of MSMEs is expected to grow from 63  to approximately 75 million, and over 40 million MSMEs were already registered on the Udyam portal by March 2024. This MSME surge shows a heavy demand for scalable and inexpensive network solutions, leading to Enterprise adoption.

Rapid Adoption of 5G

The Software defined networking (SDN) and Network Function Virtualization (NFV) market is driven by rapid adoption of 5G technology that has the ability to transform the global connectivity and network management. In Q1 2024, global 5G connections were nearly 2 billion, with a forecasted triple to 7.7 billion in 2028, according to 5G Americas. The exponential growth in this underscore the reliance of 5G to support the growing number of advanced network services. 5G is taking off in North America, with 32% of all wireless cellular connections accounted for by 5G and 22 million additional connections in Q1 2024. SDN and NFV solutions are critical to managing the 5G infrastructure’s complexity, and the technology’s ability to create low-latency, high speed, and scalable network environment accelerates the demand for such solutions. Additionally, the proliferation of 316 commercial 5G networks around the world is fueling this expansion and SDN and NFV are essential for optimising these advanced networks and market growth. 

Scalability

One of the biggest challenges in the Software defined Networking (SDN) and Network Function Virtualization (NFV) market is scalability. SDN brings scalability by dynamic and flexible network configurations, but it is still a challenge to effectively manage this scalability in practice. With growing networks, SDN controllers must manage more and more devices, flows and data points that can overwhelm the system and degrade performance. FS Community says that SDN architecture is successful only if it can scale efficiently without compromising on performance. Moreover, the algorithms used to manage large scale deployments need to be optimized, the controller designs need to be robust, and integration with underlying hardware needs to be seamless, all of which require advanced development and operational expertise. Furthermore, NFV needs to address issues of how to ensure that virtualized functions can scale dynamically while maintaining service quality. To fully realize the potential of SDN and NFV in modern network environments, the scalability problem remains to be resolved as demand for 5G, IoT, and edge computing is growing.

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Key Market Players: 

Product/Service launches, approvals, patents and events, acquisitions, partnerships, and collaborations are key strategies adopted by players in the Software-defined Networking & Network Function Virtualization Market. The top 10 companies in this industry are listed below:

1. Cisco Systems, Inc.
2. Hewlett Packard Enterprise Co.
3. Intel Corporation
4. Pluribus Networks Inc.
5. IBM
6. Juniper Networks
7. Verizon
8. Microsoft
9. Qualcomm
10. AT&T

Scope of the Report: 

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