The network functions virtualization (NFV) hardware, software and services market will reach $11.6 billion in 2019 against $2.3 billion in 2015, said IHS.
NFV software will comprise over 80 percent of the $11.6 billion total NFV revenue in 2019.
Michael Howard, senior research director for carrier networks at IHS, said: “NFV represents operators’ shift from a hardware focus to software focus, and our forecasts show this.”
The software is a much larger investment than the server, storage and switch hardware, representing about $4 of every $5 spent on NFV.
Chris DePuy, vice president at Dell’Oro Group, recently said: “Telecom service providers in all regions of the world continue to conduct trials and proofs of concept of NFV-based EPC, which we understand is slowing down purchasing of currently-available systems until NFV EPC systems are ready.”
HP, an enterprise networking vendor, recently announced HP NFV System, a pre-integrated NFV platform to enable telecoms to accelerate production NFV deployments. HP NFV System is pre-integrated with HP Helion OpenStack Carrier Grade, providing an open source based cloud platform to support reliability, scalability and performance requirements.
IHS in its telecom analysis report said that telecom service providers are still early in the long-term, 10- to 15-year transformation to virtualized networks.
Recently, Alcatel-Lucent announced a $1.3 billion NFV and SDN deal with China Mobile and China Unicom.
For both Huawei and ZTE, investments in NFV innovation is part of their long term strategy to grow the telecom carrier business.
IHS says revenue from outsourced services for NFV projects is projected to grow at a 71 percent compound annual growth rate (CAGR) from 2014 to 2019.
Revenue from software-only video content delivery network (CDN) functions for managing and distributing data is forecast by IHS to grow 30-fold from 2015 to 2019.