Service provider SDN and NFV investments will grow at a CAGR of approximately 45% between 2017 and 2020, eventually accounting for nearly $22 Billion in revenue by the end of 2020, according to the latest report by SNS Research.
While the advantages of SDN and network virtualization are well known in the enterprise IT and data center world, both technologies also bring a host of benefits to the telecommunications service provider community, said the market research firm.
According to SNS Research, new market players are beginning to emerge as service providers accelerate their transition to software-centric networks. For example, with their early wins in NFV-compliant mobile core and IMS platforms, companies such as Mavenir Systems and Affirmed Networks have emerged as direct competitors to established wireless network infrastructure giants.
With the emergence of initiatives such as the Linux Foundation's ONAP (Open Network Automation Platform), ETSI's OSM (Open-Source MANO) and SK Telecom's T-MANO, solutions are beginning to be commercialized that can perform integrated management and orchestration of VNFs from multiple vendors.
Not only can these technologies help address the explosive capacity demand of mobile traffic, but they can also reduce the CapEx and OpEx burden faced by service providers to handle this demand by diminishing reliance on expensive proprietary hardware platforms.
The recognition of these benefits has led to the emergence of the NFV concept that seeks to virtualize and effectively consolidate many service provider network elements onto multi-tenant industry-standard servers, switches and storage.
Service providers - both mobile and fixed-line - have already begun making significant investments in SDN and NFV across a number of use cases including but not limited to uCPE/vCPE, SD-WAN, vEPC, vIMS, Cloud RAN and vCDN.
Spearheaded by internet giants, data center operators and large enterprises, the adoption of software-centric networking is also continuing to grow in the enterprise and data center segment. It is estimated that SDN and network virtualization investments in this segment accounted for $12 Billion in 2017 alone.
