Revenue from enterprise software-defined networking (SDN) will grow at 72 percent CAGR through 2020, says TBR.
SDN is approaching adoption by an early majority of enterprises and will compose nearly 40 percent of global enterprise network infrastructure revenue (roughly $12.7 billion) by 2020, according to TBR’s latest Enterprise SDN Market Landscape.
The above chart from Goldman Sachs indicates that the global SDN infrastructure software market will reach $1.3 billion by 2018.
Revenue displacement will be incremental rather than exponential during this time as SDN solutions largely coexist with legacy technologies; however, the ongoing virtualization of network functions is disrupting long-standing go-to-market and innovation models, says TBR.
“Today’s business environment is characterized by globally distributed pools of information and workers as well as the need for real-time responsiveness. Network managers face new security threats and increasingly demanding traffic requirements that traditional architectures struggle to address,” said TBR Data Center Senior Analyst Krista Macomber.
Enterprises are beginning to deploy SDN technologies for the increased automation, centralization and programmability required to effectively serve the modern workload ecosystem.
Benefits from making investment in SDN include enhanced network monitoring and more agile IT service delivery, encouraging a transition from trial to production usage. Barriers include nascence of solutions and standards bodies, internal change management, and the lack of a clearly defined business use case.
“SDN promises to introduce much-needed agility into customers’ environments. For customers, getting there requires navigating a costly and complex path spanning not only technology but also business silos,” Macomber said.
One SDN solution does not meet all customer requirements. Many are deploying multiple SDN technologies to support core networking functions as well as adjacent, specific use cases such as micro-segmentation.
The technology vendor landscape is cooperative as opposed to purely competitive (e.g., market leaders Cisco and VMware moving toward a more amenable relationship). The SDN market will consolidate among a smaller number of large, multiplatform vendors that can accommodate customer demand for more holistic networking and broader data center solutions.
A ReportsnReports.com says that the global network function virtualization (NFV) market will grow at a CAGR of 32.88 percent during the period 2016-2020.
The Americas accounted for majority of the network function virtualization market shares and will continue to lead the market. The region is witnessing a significant move from proof of concepts to commercial deployment of NFV by the telecom operators, which will drive the network function virtualization market growth.
Telecom operators such as AT&T, Telefonica, Verizon, and CenturyLink are deploying NFV and SDN technologies in areas that can yield higher ROI. The migration to 5G will drive the requirement of deploying NFV and SDN.