Network Functional Virtualization (NFV) and Software-defined Networking (SDN) are driven by several factors boosting the market growth at high double digits. Security is a key area of focus for SDN and NFV vendors especially for on-demand malware protection, cloud-based URL filtering and Web application testing and development. It is expected to provide centralized control thereby making it easy for the operators.

Market Drivers

Infrastructure growth
Increase in cloud services
Virtualization of networks
Storage capacity

Market Restraints

Security issues related to data transfer
Lack of industry standard for SDN

Market Trends

SDN is dynamic in nature and thus provides increased network flexibility, which is one of the key reasons for its growth today. Server virtualization is an addendum especially in the telecom and IT industry where cloud infrastructure growth is boosting market growth.

NFV is witnessing a move from hardware based solution to software based solution and this trend is expected to boost the market growth in higher double digits during the forecast period. About 80% of investments is expected to be on software front with the transformation to virtualized networks.

The shift toward NFV-SDN architected networks is rising and in 2016, more than one-third of the telecom carriers around the world decided to deploy NFV.

While SDN was limited to service providers, since 2014, there has been lot of growth opportunities in enterprises as well.

Cloud computing and virtualization are prevailing market trends. With centralized monitoring growing significantly, the need to secure data transfer is important. Most enterprises today already have more virtual servers than physical servers. This helps organizations with branches around the world to easily share data at any point in time. However, security breaches are a key concern, and vendors must provide utmost network security.

The critical transformation for this market to succeed lies in the fast acceptance of this technology in terms of implementation that will also bring into the picture the virtual wires and software-defined server-hosted features.

The key advantages of NFV include faster time-to-market, ability to rapidly scale resources up and down, and reduce CAPEX and OPEX.

Future Opportunities

APAC provides higher growth opportunities due to rapidly growing infrastructure in countries such as China, India, and Taiwan.

One of the requirements and to a certain extent even a challenge today is how willing are the service providers to make a change in their organizational structure to incorporate NFV and blend their IT, cloud and network teams to this goal.

Frost & Sullivan, a global research and growth consulting company also covers various trends in the communication test equipment market. We will be publishing the research on global network virtualization market in Q1 2017. We have also published several research studies in areas of global network recording market, global network monitoring switches market, global network performance monitoring and management solutions market for enterprises among others.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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