#Software-defined Networking & Network Function Virtualization Market Revenue

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Software-defined Networking & Network Function Virtualization Market - Forecast (2024-2030)

Software-defined Networking & Network Function Virtualization Market Overview:

The Software-defined Networking & Network Function Virtualization Market size is estimated to reach $189.6 billion by 2030, growing at a CAGR of 28.2% during the forecast period 2024-2030. The Software defined Networking (SDN) and Network Function Virtualization (NFV) market have focuses on the transformation of conventional network infrastructures to flexible, software driven systems. The growth of this market is attributed to the fast adoption of 5G technology, the need for agile and scalable networks, and the need for cost efficient solutions that replace hardware with software-based functions. More demand is created by cloud migrations and proliferation of IoT devices. The two major trends in the Software defined Networking (SDN) and Network Function Virtualization (NFV) Market are adoption of edge computing and integration of AI and machine learning in network management. This adoption of edge computing allows SDN and NFV to process data closer to its source, which greatly reduces latency and improves real time performance for applications like IoT and autonomous systems. In addition, AI and machine learning completely change network management by offering predictive analytics, automation during optimization processes, and better decision making. For example, in October 2024, Juniper Networks launched its Juniper Secure AI-Native Edge solution, which combines AI driven networking and security for easier operations and better user experience. In August 2024, Broadcom also updated its VMware VeloCloud appliances to support scalable and efficient edge AI workload deployment for the AI application.

Software-defined Networking & Network Function Virtualization Market - Report Coverage:

The “Software-defined Networking & Network Function Virtualization Market Report - Forecast (2024-2030)” by IndustryARC, covers an in-depth analysis of the following segments in the Software-defined Networking & Network Function Virtualization Market.AttributeSegment

By Product

Software

Services

By SDN Type

Open SDN

SDN by APIs

SDN Overlay Model

Hybrid SDN

By Application

Power and Energy

Government

ITeS

BFSI

Education

Manufacturing

Retail

Transportation and Logistics

Defense

Healthcare

Others

By End User

Cloud Service Providers

Technology Service Providers

Enterprises

By Geography

North America (U.S., Canada and Mexico)

Europe (Germany, France, UK, Italy, Spain, Russia and Rest of Europe),

Asia-Pacific (China, Japan, South Korea, India, Australia & New Zealand and Rest of Asia-Pacific),

South America (Brazil, Argentina, Chile, Colombia and Rest of South America)

Rest of the World (Middle East and Africa).

COVID-19 / Ukraine Crisis - Impact Analysis:  

The Software-defined Networking (SDN) and Network Function Virtualization (NFV) market was impacted by the COVID-19 pandemic, which caused rapid digital transformation of industries. As remote work became the new normal worldwide, organisations were quick to adopt SDN and NFV to improve network agility, scalability and security. Cloud based solutions and virtualized infrastructures were in high demand to continue business as usual. 

Geopolitical tensions resulting from the Russia- Ukraine war only complicated the situation further by disrupting supply chains and IT investments in other affected regions. The increasing cybersecurity threats compelled a massive scale adoption of SDN and NFV to perform secure and resilient operations of the network. During uncertainties, organisations looked for robust virtualized solutions to counter risk and ensure business continuity. Geopolitical and economic factors were reinforcing the need for flexible, software defined networks, and this was reflected in steady global demand.

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Key Takeaways:

North America Leads the Market

North America occupied the largest market share in the Software-defined Networking & Network Function Virtualization Market in 2023. The Software defined Networking (SDN) and Network Function Virtualization (NFV) market in North America is leading because of its rapid adoption of 5G and advanced networking technologies. In North America, smartphone subscriptions on 5G are at 59 %, with over 300 million people (90 percent of population) have access to 5G services across low-, mid- and high band spectrums in the region, according to Ericsson. It provides this robust infrastructure, which enables technology innovation and adoption in sectors such as sports venues, airports and universities. Among other things, Fixed Wireless Access (FWA), one of the main use cases for 5G, has more than 9 million connected locations in the U.S. These advancements are further complemented by a robust technology ecosystem that fosters innovation in 5G, AI and cloud, and tests and scales these innovations globally to cement North America’s leadership in the SDN and NFV market.

BFSI is the Largest Application

The Software-Defined Networking (SDN) and Network Function Virtualisation (NFV) market is primarily driven by the BFSI (Banking, Financial Services and Insurance) sector owing to the high growth and critical need for advanced networking solutions. The total assets of China’s banking institutions increased by 9.9% year on year to 5.73 trillion yuan as of the end of Q4 2023, according to the National Financial Regulatory Administration of China. During the same period, insurance companies had assets of $41.23 billion, a rise of 10.4% from the previous year. The sector's rapid expansion is accompanied by a surge in loan disbursement and insurance policy growth including inclusive loans to micro and small enterprises up by 23.3% year on year. SDN and NFV are essential to the demands of these networks in order to be scalable, secure, and efficient for real time data processing, increased cybersecurity, and operational agility. Due to the adoption of cloud based and automated technologies by the financial institutions, the BFSI segment is in the forefront to adopt SDN and NFV solutions, thereby making it the largest application in this market.

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Enterprises Lead the Market 

The Enterprises segment dominates the Software defined Networking (SDN) and Network Function Virtualisation (NFV) market as enterprises move towards Virtualized Network Functions (VNFs) to cut costs, improve scalability and increase operational efficiency. Decoupling network functions from dedicated hardware and VNFs such as virtual enterprise routers and session border controllers (eSBCs), allows them to be deployed on cloud platforms or general-purpose hardware. The transformation is easy to manage network, and enables following critical functions such as load balancing, WAN acceleration, and secure connectivity. Patton Electronics said such virtualization not only cuts capital expenditures but also simplifies operations, making it a preferred solution for enterprises. This also holds good for India as the growth of the Micro, Small and Medium Enterprises (MSMEs) has been fast here. As per India Brand Equity Foundation, the number of MSMEs is expected to grow from 63  to approximately 75 million, and over 40 million MSMEs were already registered on the Udyam portal by March 2024. This MSME surge shows a heavy demand for scalable and inexpensive network solutions, leading to Enterprise adoption.

Rapid Adoption of 5G

The Software defined networking (SDN) and Network Function Virtualization (NFV) market is driven by rapid adoption of 5G technology that has the ability to transform the global connectivity and network management. In Q1 2024, global 5G connections were nearly 2 billion, with a forecasted triple to 7.7 billion in 2028, according to 5G Americas. The exponential growth in this underscore the reliance of 5G to support the growing number of advanced network services. 5G is taking off in North America, with 32% of all wireless cellular connections accounted for by 5G and 22 million additional connections in Q1 2024. SDN and NFV solutions are critical to managing the 5G infrastructure’s complexity, and the technology’s ability to create low-latency, high speed, and scalable network environment accelerates the demand for such solutions. Additionally, the proliferation of 316 commercial 5G networks around the world is fueling this expansion and SDN and NFV are essential for optimising these advanced networks and market growth. 

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Scalability

One of the biggest challenges in the Software defined Networking (SDN) and Network Function Virtualization (NFV) market is scalability. SDN brings scalability by dynamic and flexible network configurations, but it is still a challenge to effectively manage this scalability in practice. With growing networks, SDN controllers must manage more and more devices, flows and data points that can overwhelm the system and degrade performance. FS Community says that SDN architecture is successful only if it can scale efficiently without compromising on performance. Moreover, the algorithms used to manage large scale deployments need to be optimized, the controller designs need to be robust, and integration with underlying hardware needs to be seamless, all of which require advanced development and operational expertise. Furthermore, NFV needs to address issues of how to ensure that virtualized functions can scale dynamically while maintaining service quality. To fully realize the potential of SDN and NFV in modern network environments, the scalability problem remains to be resolved as demand for 5G, IoT, and edge computing is growing.

Key Market Players: 

Product/Service launches, approvals, patents and events, acquisitions, partnerships, and collaborations are key strategies adopted by players in the Software-defined Networking & Network Function Virtualization Market. The top 10 companies in this industry are listed below:

Cisco Systems, Inc.

Hewlett Packard Enterprise Co.

Intel Corporation

Pluribus Networks Inc.

IBM

Juniper Networks

Verizon

Microsoft

Qualcomm

AT&T

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Scope of the Report: 

Report MetricDetails

Base Year Considered

2023

Forecast Period

2024–2030

CAGR

28.2%

Market Size in 2030

$189.6 billion

Segments Covered

By Product, By SDN Type, By Application, By End User and By Geography.

Geographies Covered

North America (U.S., Canada and Mexico), Europe (Germany, France, UK, Italy, Spain, Russia and Rest of Europe), Asia-Pacific (China, Japan, South Korea, India, Australia & New Zealand and Rest of Asia-Pacific), South America (Brazil, Argentina, Chile, Colombia and Rest of South America), Rest of the World (Middle East and Africa).

Key Market Players

Cisco Systems, Inc.

Hewlett Packard Enterprise Co.

Intel Corporation

Pluribus Networks Inc.

IBM

Juniper Networks

Verizon

Microsoft

Qualcomm

AT&T

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Enterprise Routers Market Sector Analysis Report, Regional Outlook & Competitive Share & Forecast, – 2025

The enterprise routers market is poised to grow at a CAGR of 6.2% during the forecast period from 2020 to 2025. Enterprise routers are vital products that any business or enterprise uses regularly. They play an essential role in enterprises in connecting computer networks and the internet. Routers perform many functionalities, such as enterprise routing, which gives businesses a higher CPU capacity to control place tasks. Furthermore, it provides companies the ability to enhance their interface for both Ethernet and WAN circuits, run NetFlow/sFlow, MPLS, QoS, and other security features. It has functions to integrate deep packet inspection and WAN acceleration. Enterprise routers assist in maximizing productivity in the office, and the installation of an enterprise router requires the skills and expertise of an engineer. - In the first quarter of 2019, the enterprise and service provider router market grew 8.2%. The service provider segment accounts for 75.3% of router market revenues. The service provider router market rose 7.1%, and the enterprise router market grew 11.9%. The top seven enterprise routers which had high market share till June 2019 were Cisco (55.7%), Huawei (9.3%), HPE (5.3%), Nokia (3.7%), Juniper (3.6%), Netgear (2%), Dell EMC (1.7%). Cisco Systems is one of the top networking companies in the world with the highest market share providing a wide variety of enterprise routers. Cisco's enterprise router revenue rose 16.1%, and Cisco's SP and enterprise router market share increased to 42.4% from 37.4% in the first quarter, according to telecom lead.

Click Here to Download Sample Report >>  https://www.sdki.jp/sample-request-90107 - Huawei's Global Industry Vision (GIV) predicts that by 2025, 85% of enterprise applications will be moved to the cloud, resulting in significant traffic growth at the egress of enterprise WANs. Traditional private lines offer several Mbit/s bandwidth and are prone to network congestion, and so service experience cannot be guaranteed. Leveraging flexible and efficient application-based traffic steering, Software-Defined WAN (SD-WAN) is the best choice for enterprise WAN interconnection in the cloud era, as it can effectively ensure customer service experience. However, when traditional enterprise routers intersect with SD-WAN, their forwarding performance decreases by about 80% on average. In response, Huawei launched next-generation NetEngine AR enterprise routers that provides higher forwarding performance at the egress of enterprise WANs. - Furthermore, service providers are rapidly modernizing their networks to satiate enterprises' growing appetites for higher performance and superior user experiences. However, as service providers adopt virtualization and SDN capabilities, they are being held back by monitoring techniques that cannot keep up. The enterprise cloud migrations and increasing reliance on software-as-a-service applications- introduced new challenges. This has driven service providers to adopt NFV, SDN, and cloud-native computing technologies. In May 2020, 128 Technology, the leader in Session Smart Routing, announced that Momentum Telecom selected 128 Technology's Session Smart Router to enable a new era of software-defined network services for its thousands of enterprise customers and partners. Key Market Trends Wireless Connectivity is Expected to Hold Major Share - An ordinary wireless router can only support approximately 10-20 users’ access. In contrast, the wireless access router point allows over 50 or even hundreds of users’ access, with the potential ability to send and receive signals. According to Cisco, the expected penetration of enterprise internet traffic via wireless fixed-line connection in 2021 shall be 125988 petabytes per month. With the rise in high internet traffic and devices, average fixed broadband speed, along with average internet users, will grow exponentially in the forecast period. Average fixed broadband speed is likely to increase from 5.1 Mbps in 2015 to 12.9 Mbps in 2020. - For instance, the industry’s first 5G optimized wireless WAN edge router for enterprise branch deployments has been released by Cradlepoint in May 2020. The Cradlepoint E3000 Series, according to the company, optimizes performance and investment protection and enables customers to deploy a wireless wide-area network (Wireless WAN) using the latest LTE and Wi-Fi technology and seamlessly upgrade to 5G in the future. The COVID-19 pandemic has fueled an already growing demand for agile and rapidly deployable wireless WANs based on LTE for primary connectivity. Cradlepoint said in the release that the E3000 Series is intended to target this market directly. - Furthermore, M2M Connectivity supplies a broad range of wireless routers for 4G/3G as well as models for satellite and short-range RF (WLAN, Bluetooth). These ethernet routers enable remote access and communication with equipment and assets such as remote PLCs, data loggers, and microcontrollers. With the increasing usage of such solutions in various end-users, the market tends to grow in this sector. In April 2020, Digi International announced the launch of several new cellular routers and extenders, each designed to meet the present and future connectivity needs of organizations for M2M applications in the transportation and enterprise marketplaces. North America is Expected to Hold Major Share - North America is expected to hold a prominent share in the enterprise routers market. Moreover, the region has a strong foothold of network routers vendors. Some of them include Cisco Systems, Inc., Dell EMC, Juniper Networks, Inc., among others, which contribute to the growth of the market. It is estimated that till 2022, in the United States the market for network router will grow to USD 11,950 million which includes the market for ethernet service edge router, multiservice edge router, service provider core router, and internet exchange router (source Cisco), where the expectation of high market growth potentially move towards internet exchange router in 2022. - Moreover, according to Cisco, 46% of network devices will be machine -to -machine or IoT by 2020, which are vulnerable to attacks. To fully realize the potential of these connected devices, the industries need to be equipped with WANs that are flexible to meet the network demands anticipated over the future. Furthermore, the emergence of trending technologies, such as cloud networking, SaaS-based application, network analytics, DevOps, and virtualization, has encouraged the users and businesses in North America to undertake enterprise routers products. - However, security and privacy concerns are restraining the market. According to the study, five out of every six routers in the United States are running out-of-date firmware with exploitable security vulnerabilities, which hinders market growth globally. In a situation where many employees are currently working from home due to a COVID-19 pandemic or access wi-fi networks that operate at enterprise-level security, devices such as routers can be hacked to plant a range of malware into handheld devices used by employees. Subex, through its honeypot network (a decoy computer system for trapping hackers), spread across 62 cities, has been tracking cyberattack trends and malware activity that can be correlated with the outbreak. Competitive Landscape The enterprise routers market is fragmented as the global players invest in R&D for the latest innovations in the product for several small to medium-sized companies. Key players are Cisco Systems, Inc., Juniper Networks, Inc., Hewlett Packard Enterprise, etc. The companies operating in the market continuously strive to launch new solutions to help service providers achieve a holistic approach to infrastructure transformation and gain new orders in that course for strategic aim. - March 2020 - Huawei confirmed that its next-generation NetEngine AR600 and AR6000 series enterprise routers have passed the verification test by The Tolly Group which is an authoritative international provider of testing and validation. The results showed that Huawei's NetEngine AR routers are equipped to handle the growth in traffic from digital transformation in the next three to five years, leading the way to a new era of ultra-fast interconnection for enterprise WANs. - December 2019 - Cisco Silicon One based Q100 processor and 8000 Series routers. Cisco will uniquely allow ecosystem players to separately buy processors, the XR7 router software, 8000 series routers without software, optical modules (QSFP-DD and QSFP28), or a fully integrated 8000 Series solution. The 8000 Series router and the Q100 processor is targeted at service providers and data center operators ranging from large aggregation to core applications. Reasons to Purchase this report: - The market estimate (ME) sheet in Excel format - 3 months of analyst support

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