A new study from Research and Markets estimates that service provider Software-defined Networking (SDN) and Network Functions Virtualization (NFV) investments will account for more than $20 billion in revenue by the end of 2020.
Specifically, the report said that SDN and NFV investments will grow at a compound annual growth rate of 54 percent between 2015 and 2020 as service providers seek to reduce costs and virtualize their networks.
Research and Markets notes that one of the major advantages of SDN and NFV is that they not only help address explosive data traffic demands but also reduce service provider capital expenditures and operating expenses by diminishing reliance on expensive proprietary hardware platforms. In addition, NFV has made it easier for service providers to consolidate network elements onto multi-tenant industry-standard servers, switches and storage.
Interestingly, a report from Infonetics Research conducted earlier this year projected that the SDN and NFV market would reach $11 billion in 2018.
In October CenturyLink (NYSE: CTL) said that it had equipped more than 36 locations in multiple geographies with its virtual network services (VNS), which is its SDN and NFV deployment. The telco is working with a diverse set of network suppliers to offer a suite of virtual routing and firewall services to its business customer base.
"We're deployed in 36 locations today across multiple countries and that number has really grown mostly this year," said James Feger, vice president of network strategy and development for CenturyLink, in an interview with FierceTelecom. "Going into 2016 we plan to significantly enhance that as well to meet our goals."
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Infonetics forecasts carrier SDN and NFV market to reach $11 billion by 2018