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A whopping 71 percent CAGR is projected over the next five years.

Edward Gately

August 9, 2017

1 Min Read
Network Engineer

The global software-defined networking (SDN) and network functions virtualization (NFV) market is expected to grow from nearly $3.7 billion this year to more than $54.4 billion by 2022. That’s a whopping compound annual growth rate (CAGR) of more than 71 percent, with Cisco, Hewlett Packard Enterprise (HPE), IBM and Intel among the major vendors.

That’s according to a new report by MarketsandMarkets. Other major vendors include Nokia, Ericsson AB, Huawei Technologies, Juniper Networks, NEC, Pica8, Brocade Communications Systems, Ciena, Pluribus Networks and Big Switch Networks.

The increasing adoption of SDN and NFV technologies by telecom service providers has boosted the potential for network capacity by offering bandwidth flexibility, the report notes. SDN transforms the network to a more open and programmable framework by implementing a decoupled centralized control layer, which in turn, allows implementation of NFV that optimizes network resources. This reduces network congestion, enhances network user capacity (bandwidth requirement), and minimizes the cost associated with hardware requirement for network user expansions.

The manufacturing vertical is expected to show the fastest growth rate over the next five years. Manufacturing units globally are rapidly adopting SDN services to better optimize their networks, MarketsandMarkets said.

Asia Pacific (APAC) is poised for strong growth in terms of SDN and NFV deployments over the network, mostly due to the increasing number of data-center deployments planned in this region. APAC is set to pass Europe as the second largest region in terms of revenue from SDN and NFV. In more technologically-advanced North America, there are continuous advancements in technologies as well as business applications — those are driving growth for adoption in that region.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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