Global telecom service providers to invest $22 billion in SDN, NFV technologies by 2020: Study

The service provider SDN (Software Defined Networking) and NFV (Network Functions Virtualization) market will grow at a CAGR of approximately 45% over the next three years – with annual investments anticipated to reach nearly $22 billion by the end of 2020, SNS Research said in its report.

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. SNS Research estimates that SDN and network virtualization investments in this segment accounted for $12 billion in 2017 alone.

The firm said that SDN and network virtualization bring a host of benefits to the telecommunications service provider community even as the advantages of both technologies are well known in the enterprise IT and data center world.

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,” SNS Research said.

SNS Research said that 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,” it added.

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.