NFV Market to Exceed $15 Billion by 2020

July 22, 2016
According to IHS Markit (NASDAQ:INFO), the global network functions virtualization (NFV) market, which includes NFV hardware, software and ...

According to IHS Markit (NASDAQ:INFO), the global network functions virtualization (NFV) market, which includes NFV hardware, software and services, will be worth $15.5 billion by 2020. NFV software is expected to account for the bulk of that revenue.

"Between 2015 and 2020, the service provider NFV market will grow at a robust compound annual growth rate (CAGR) of 42% - from $2.7 billion in 2015 to $15.5 billion in 2020," said Michael Howard, IHS' senior research director, carrier networks.

NFV represents the shift in the telecom industry from a hardware focus to a software focus, with operators making much larger investments in software than in server, storage and switch hardware. "NFV software will comprise 80% of the $15.5 billion total in 2020," Howard said.

In 2020, only 11% of NFV revenue is expected to be attributable to new software and services. Some 16% is expected to come from NFV infrastructure (NFVI) - servers, storage, switches - acquired in place of purpose-built network hardware such as routers, deep packet inspection (DPI) products and firewalls. The remaining 73% is expected to originate from existing market segments, primarily virtual network functions (VNFs).

The main value of NFV is in its applications, that is, the VNFs. "The service provider NFV market is larger than the software-defined networking (SDN) market throughout our forecast horizon of 2020, due to the pre-existing and ongoing VNF market," said Howard. "We expect strong growth in NFV markets in 2020 and beyond, driven by service providers' desire for service agility and operational efficiency."

The company's latest NFV report tracks what service providers spend on NFV hardware and software to deliver software-based services to customers via the consumer virtual customer premises equipment (vCPE) and enterprise vCPE use cases. The vCPE use case opportunity, including spending to deploy consumer and enterprise services, is forecast to reach more than $1.5 billion worldwide by 2020.

About the Author

BTR Staff

EDITORIAL
STEPHEN HARDY
Editorial Director and Associate Publisher
[email protected]
MATT VINCENT
Senior Editor
[email protected]
SALES
KRISTINE COLLINS
Business Solutions Manager
(312) 350-0452
[email protected]
JEAN LAUTER
Business Solutions Manager
(516) 695-3899
[email protected]

Sponsored Recommendations

Data Center Interconnection

June 18, 2024
Join us for an interactive discussion on the growing data center interconnection market. Learn about the role of coherent pluggable optics, new connectivity technologies, and ...

The Pluggable Transceiver Revolution

May 30, 2024
Discover the revolution of pluggable transceivers in our upcoming webinar, where we delve into the advancements propelling 400G and 800G coherent optics. Learn how these innovations...

The Journey to 1.6 Terabit Ethernet

May 24, 2024
Embark on a journey into the future of connectivity as the leaders of the IEEE P802.3dj Task Force unveil the groundbreaking strides towards 1.6 Terabit Ethernet, revolutionizing...

From 100G to 1.6T: Navigating Timing in the New Era of High-Speed Optical Networks

Feb. 19, 2024
Discover the dynamic landscape of hyperscale data centers as they embrace accelerated AI/ML growth, propelling a transition from 100G to 400G and even 800G optical connectivity...