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SDN, Network Virtualization Opportunity Estimated at $4B in 2014, $35B by 2018

By Paula Bernier October 23, 2013

DN and network virtualization are showing a lot of promise, not to mention existing activities, says SNS Research, which in a new study estimates this space will be worth a whopping $4 billion next year alone. SNS Research goes on to say that it expects to see compound annual growth of nearly 60 percent in this space over the next 6 years.

But if you think that’s promising, you ain’t seen nothing yet. SDN solutions provider Plexxi in an April wrote that it expects between 30 and 40 percent of the total networking spend to be influenced by SDN over the next six years, which means the total SDN market could reach $35 billion by 2018.

SNS Research notes that SDN and network virtualization solutions already are widely deployed in data center and enterprise environments. Several service provider deployments also are under way.

Both wireline and wireless service providers stand to benefit big from SDN and NFV, notes SNS Research, which estimates that these communications outfits will as a result save up to $32 billion annual in capital expenditures as a result. The firm notes that these new approaches to networking enable various functions, such as deep packet inspection, to be implemented in software.

However, SDN and NFV are not without their challenges, and there will be winners and losers in this networking sea change. For example, SNS Research says traditional hardware-based switching equipment will see significant price and gross margin erosion as a result of the move to these software-focused approaches.

The network architecture known as SDN, separates the control and data planes of the network and automatically looks at flows in the network, understanding the requirements of those different flows and using the network to provide those flows with the appropriate bandwidth and other network resources. NFV has to do with virtualizing specific aspects of the network related to functions like deep packet inspection and the HSS, as two examples.

A closer look at NFV, its future promises and challenges will happen during Software Telco Congress Nov. 20-21.

Edited by Stefania Viscusi

Executive Editor, TMC

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