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ReportsnReports: Huge Growth Ahead for SDN, NFV

May 16, 2016

To say that there's big growth ahead for the software defined networking (SDN) and network functions virtualization (NFV) fields is almost like predicting the sun will rise tomorrow. A new report from ReportsnReports, meanwhile, takes some of the bland generality out of this concept by pinning more specific growth estimates to it, and yields some very exciting potential ahead.

Easily the centerpiece of the report was that service provider SDN and NFV investments were set to reach better than $18 billion in revenue by 2020's end. Seeing that kind of growth requires a huge compound annual growth rate, and the industry will provide such a rate at 46 percent. The lion's share—70 percent—of all investment in the field can be boiled down to a handful of targets: virtualized customer premise equipment (CPE), evolved packet core (EPC) and mobile core systems, and IP multimedia subsystem and policy control.

This likely won't change as projections say almost 80 percent of new EPC investment will be made in virtualized systems. Just the investment in orchestration systems alone will mean $1.6 billion in revenue by the end of 2020, almost 10 percent of the projected total. This market won't be limited by geography, either, as the ReportsnReports report tackles 34 different country markets and six regional markets, suggesting widespread growth by geography.

While the sheer size of the numbers might prove a surprise in isolation, the basic idea likely isn't taking anyone by surprise here. Objectively, it's well-known that SDN and NFV are an increasing part of a lot of operations, particularly data centers. Easily one of the biggest parts of SDN and NFV in data centers is data center optimization, with a particular focus on big data optimization. Big data's value as a means to derive actionable insights from massive collections of data has been on the table for years. As more businesses discover the value in being able to tell what to stock, where to stock it in a store, and when to have more people on hand to handle customer influxes, big data capability becomes prized. That's not the only use case, but certainly one of the most popular. SDN and NFV are routinely delivering value in the data center for storage, automation, and performance enhancement.

Whether delivering content to users, allowing businesses to get the benefit of certain systems without having to have the infrastructure to run them on site, analyzing markets for opportunity or any of a hundred other tasks, SDN and NFV are delivering value throughout business ecosystems. Those who bring such systems in will likely find that value waiting, and that will help drive the substantial projected gains ahead.

Edited by Maurice Nagle

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