Worldwide revenue for telecoms network functions virtualization (NFV) software, including VNFs, NFVI, and cloud-native network functions (CNFs), will grow from a combined $7.5 billion in 2020 to just over $29 billion in 2025, according a report by IDC.
Despite the sustained headwinds from COVID-19 in 2020, CSPs continued to deploy VNFs as an adjunct to legacy physical network functions. Additionally, the broader industry witnessed early instances of CNFs deployed in containers, primarily tied to the standalone 5G core as part of mobile network upgrades, giving rise to telco cloud infrastructure. However, IDC does not expect material uptake for CNFs across comms CSPs (wireless and wireline) until the latter part of the forecast.
While the VNF/CNF and NFVI markets have generally underperformed against expectations thus far, we expect 5G network rollouts to positively impact uptake, particularly across the latter portion of the forecast. Additionally, virtualization is incrementally seeing uptake across the core transport network, mobile backhaul, access network (cable and PON) and virtual CPE markets, particularly as multi-access edge computing (MEC) initiatives take hold.
Ajeet Das, Research Director, Carrier Network Infrastructure Research, IDC
Cloud-native network functions are now slowly being deployed alongside virtual network functions across cloud-based digital infrastructure so that the customer-centric services can be scaled, updated, and orchestrated easily, not only at the core but also at the edge of the network.
