SDN, NFV Investments Mean Multi-Billion Revenue Potential

By Steve Anderson February 03, 2016

The fields of software-defined networking (SDN) and network functions virtualization (NFV) are still comparatively new, with businesses not exactly sure how they fit in or what kind of benefit is delivered. The benefits are starting to become clearer, however, and that's prompting quite a bit of purchase, installation and use. So much, in fact, that a new report projects revenue of $20 billion by 2020.

The report,'s “The SDN, NFV & Network Virtualization Ecosystem: 2015 – 2020 – Opportunities, Challenges, Strategies and Forecasts”, projects not only that $20 billion in revenue, but also a compound annual growth rate (CAGR) of 54 percent through the period in question.  What's more, the report projects that businesses are already aware of the advantages, and are already starting some fairly large deployments.

Data centers are said to be the largest target of these deployments, particularly as SDN and NFV help to address ever-increasing demands for mobile traffic capacity. It allows such benefits to be realized without the need for high-end hardware, instead providing access to new services as a predictable, and often scalable, monthly bill. The resulting positive impact on operational and capital expenses alike draw plenty of interest, and being able to provide more services for less is a huge benefit.

This means big opportunity for original equipment manufacturers (OEMs) to get access to a whole new revenue stream, offering networking services along with networking hardware. Those concerned that the market impact here might be limited to North America or the like need not be, as the study is based on information gathered from nine separate markets, including Latin & Central America, Eastern Europe, and the Middle East & Africa.

Indeed, both NFV and SDN are offering great opportunities in a variety of sectors, bringing more value to the networking ecosystem and giving users a great way to access new tools and services without having to bring in a lot of new equipment. That kind of flexibility is hard to pass up, so it's not surprising to see projections that a lot of companies will make a move to this format. As demands on the network get more pronounced thanks to an increasingly mobile workforce, and the tools required to keep it operational like video conferencing, file sharing and similar matters, anything that takes heat off the network should be particularly prized.

NFV and SDN may not work in every situation, but there are likely to be enough situations in which it does work, and work well, to draw interest. If interest is drawn, a sales case can be more readily made, and sales in turn should climb. Wider use means greater revenue overall, and NFV and SDN alike should be well on its way toward that multi-billion revenue projection in short order.

Edited by Kyle Piscioniere

Contributing Writer

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