The telecom service provider SDN and NFV market will reach $11 billion in 2018, said Michael Howard, principal analyst for carrier networks at Infonetics Research.
The telecom research firm has analyzed three types of revenue.
Infonetics said revenue from brand new SDN and NFV software will be 20 percent of the total SDN and NFV market in 2018.
Displaced revenue that comes from products that companies will buy instead of buying something else, including NFV infrastructure (NFVI) hardware (servers, storage, switches) purchased instead of network hardware (routers, DPI, firewalls, etc.) will be 12 percent of the market in 2018.
Revenue that comes from newly identified segments of existing markets: mostly the virtualized network functions (VNFs), and also ports on routers, switches, and optical gear that have become SDN capable will be 68 percent in 2018.
The report said NFV represents the lion’s share of the combined SDN and NFV market. The value of NFV is in the virtualized network functions software-the applications-rather than the orchestration and control.
VNF makes up over 90 percent of the NFV software segment.
SDN and NFV exemplify the telecom industry’s shift from hardware to software: SDN and NFV software are projected to make up of three-quarters of total SDN/NFV revenue in 2018.
Infonetics Research’s carrier SDN and NFV Hardware and Software market size and forecast report tracks network functions virtualization (NFV) and software-defined networking (SDN) hardware and software used in service provider networks.