There will be an acceleration in the cloud-native deployment of telecommunications (telco) network workloads throughout 2024, IDC said in its report.
IDC’s forecast outlines a global surge in revenue for telco cloud infrastructure software, encompassing virtual network functions (VNFs), cloud-native network functions (CNFs), and network functions virtualization infrastructure (NFVI). The projections span four key market subsegments, namely core transport, mobile infrastructure, mobile backhaul, and access networks, along with virtual customer premises equipment (CPE).
According to IDC’s estimates, the revenue for telco cloud infrastructure software is poised to grow from $12.9 billion in 2022 to a substantial $27.3 billion by 2027. This reflects a remarkable compound annual growth rate (CAGR) of 16.1 percent over the entire 2022-2027 forecast period.
While the majority of current telco workloads continue to rely on virtual network functions (VNFs), the IDC report suggests a noteworthy shift towards cloud-native workloads, particularly in wireless, wireline, and other service providers. The forecast underscores the swift growth expected in the cloud-native network functions (CNF) market.
IDC has taken into account the recent emergence and the increasing initiative to deploy cloud-native, container-based telco workloads across the telco cloud. Consequently, the forecast provides a detailed breakdown, treating cloud-native network functions as a distinct line item.
Furthermore, the report acknowledges the broader impact on NFVI and the associated transitions towards container-as-a-service (CaaS) offerings. This includes container-based infrastructure management tools like Kubernetes, and the possibility of hybrid deployment models where containers are utilized on bare metal or virtual machines (VMs).
IDC urges communication service providers to deploy network functions across edge sites while managing a combination of core and edge sites on horizontal telco cloud platforms founded on a common software foundation.
“Adoption of cloud-native network functions is gaining momentum, with CNFs being deployed alongside virtual network functions across communication service providers’ cloud-based digital infrastructure for service agility, lower cost of ownership, and elastic scaling of the network,” Ajeet Das, Research Director of Telecom Network Infrastructure at IDC, said.
Ajeet Das pointed out that operators face various challenges, including a lack of in-house expertise in cloud-native orchestration and infrastructure, difficulty defining and implementing comprehensive security measures, and the operational complexity of managing on-premises, cloud, and multi-cloud networks.