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Global VNF Market to Grow to $16.4 billion in 2022 at a CAGR of 45.4%, says IDC

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Global VNF Market to Grow to $16.4 billion in 2022 at a CAGR of 45.4%, says IDC Image Credit: elgris/Bigstockphoto.com

Communications service providers (CSPs) are being challenged to transform their carrier network infrastructure to create new business network services, generate new revenue streams, and improve their operational efficiency. In response, CSPs are embracing software-defined networking (SDN) and deploying virtual network functions (VNFs) form factors, said IDC.

This has entailed deploying a new class of carrier network architecture in which virtualized form factors of network functions can be hosted, operated, and managed on commodity infrastructure. This architecture of virtual network functions is likely to pervade all carrier network domains in the future. Considering the journey toward a software-defined, virtualized infrastructure is just beginning for most carriers and CSPs, the VNF market is relatively small today. However, as use cases such as network slicing in 5G and virtual CPE–based business services pervade the vertical carrier network domains, IDC expects this market to achieve significant growth in the near term.

Worldwide revenue for the VNF market in 2017 stood at $2.5 billion across all segments. In 2018, IDC expects VNF revenue to double as early 5G deployments take shape and as wireline initiatives such as vCPE, CORD, and HERD gain further momentum. From this point onward, IDC expects the overall VNF market to grow to $16.4 billion in 2022 at a CAGR of 45.4%. Wireless infrastructure is the largest contributor to the VNF forecast today and is expected to continue to be the largest contributor in 2022 followed by routing. 5G will continue to be a big driver of wireless infrastructure VNF growth, while the move to virtual routing in edge and access use cases will drive routing VNF growth more than overall VNF market growth rates, said IDC.

Rajesh Ghai, Research Director, Carrier Network Infrastructure Research, IDC
Communications service providers globally recognize the need to digitally transform their network infrastructure and build more customer-centric business models. Embracing software-defined networking principles and deploying network functions in virtualized form factors are a strategic necessity not only for carriers as they invest in their future but also for vendors supplying those solutions to the market.

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

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