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For the past several years, the telecom industry has been moving toward a major network and operational transformation epitomised by software-defined networking (SDN) and network functions virtualisation (NFV) with the top goals of automation and service agility, states an IHS report.
Carriers have defined the vision, goals and architectures and are progressing through use cases, proof-of-concept projects, field trials and a small but growing number of commercial deployments. The partially proven promise keeps the industry moving as fast as it can, but according to IHS, we are still early in this long-term, 10-to-15-year transformation of service provider networks.
SDN deployments started in Japan with NEC and NTT, and the country has been active in deploying real but small commercial deployments. China is coming on strong, with many sizeable commercial deployments in 2015 and 2016. And service providers in North America and Europe are also leading the charge to deploy SDN, and are anticipated to account for 13 per cent of total 2015–2020 SDN revenue.
Given these factors, the service provider SDN market, including hardware, software and services, is forecast to grow from $289 million in 2015 to $8.7 billion in 2020, with a 2015–2020 compound annual growth rate (CAGR) of 98 per cent.
Additional Carrier SDN Market Highlights:
– SDN and NFV represent the shift from a hardware focus to software one: Software and outsourced services will comprise 46 per cent of SDN revenue in 2020
– SDN orchestration and controller software revenue is forecast to grow to over $1.8 billion in 2020
– But by 2020, there will be more value in SDN apps than in orchestration and control, which will be priced reasonably due to competitive pressure