As service providers like AT&T (NYSE: T) and CenturyLink (NYSE: CTL) ramp up their hardware-to-software transition plans, IHS Infonetics forecasts that the network functions virtualization (NFV) hardware, software and services market will reach $11.6 billion in 2019, up from $2.3 billion in 2015.
The research firm said that while service providers are still early in the long-term, 10- to 15-year transformation to virtualized networks, revenue from outsourced services for NFV projects is projected to grow at a 71 percent compound annual growth rate (CAGR) from 2014 to 2019. One area of NFV revenue growth during this period will come from software-only video content delivery networks (CDNs). IHS forecasts that software-only video CDN functions for managing and distributing data will grow 30-fold from 2015 to 2019.
"NFV represents operators' shift from a hardware focus to software focus, and our forecasts show this," said Michael Howard, senior research director for carrier networks at IHS, in a release. "We believe NFV software will comprise over 80 percent of the $11.6 billion total NFV revenue in 2019." Release