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NFV, Accompanying Markets Primed for Growth

By Steve Anderson June 06, 2017

Anyone who's looking for short-term market growth opportunities will likely be interested by a new report to come out of SNS Research, which took a closer look at some familiar markets. Specifically, the report examined the state of the network functions virtualization (NFV), software defined networking (SDN) and network virtualization ecosystem markets and discovered there was big opportunity in these fields, especially in the short term.

The numbers tell an exciting story in these markets; with SNS Research estimating that NFV and SDN investments at the service provider level will grow with a 46 percent compound annual growth rate (CAGR) between 2016 and 2020. By the end of 2020, in fact, the investments made are projected to account for better than $18 billion in revenue outright.

A great set of numbers, but what's driving these? Perhaps the biggest driver is investment at the telecommunications service provider level. The benefits of NFV and SDN operations have long been a part of the picture at data centers, and at enterprise IT operations. Though admittedly, some have found more benefit from one than the other, the benefits have been well known for some time. Vastly reduced capital expense, significantly reduced operational expense, and sometimes even both at the same time have all been on the menu. Now, the telecom provider is getting into NFV and SDN, and discovering substantial savings afoot, a move which will likely continue to power growth in these markets as we approach the 5G era.

Further points include how almost 70 percent of all virtualized network function (VNF) spending can be classified into policy control platforms, virtualized customer premises equipment (CPE), EPC / mobile core operations or IP multimedia systems (IMS) operations. Plus, by 2020, almost 80 percent of all new EPC investments are set to be virtualized based on this report's figures.

All of this is great news, in the short term at least, for anyone involved in SDN and NFV, though it also makes it clear there will be changes in which areas benefit most going forward. Those involved in virtualization efforts and software-related matters will likely do best here, as related hardware will be comparatively slim once it's purchased and in place. That's usually the case, of course; purchased hardware related to a technology area is generally a durable good and only needs replacement every so often.

Still, it's clear that SDN, NFV, and network virtualization operations are here to stay, and that's great news for a lot of organizations. Whether selling it or using it, there's a lot of interest, and a lot of value flowing through this system.

If you’d like to learn more about NFV, be sure to check out TMC and Crossfire Media’s newest conference and expo, Communications 20/20, happening July 18-20 at Caesars Palace in Las Vegas. The event will focus on the next wave of technology and innovations that will transcend the importance of person to person contact, disrupting the future of the entire communications industry. Find out more HERE.

Edited by Alicia Young

Contributing Writer

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